Brand leveraging

Deviprasad Goenka Management college of Media Studies
http://www.dgmcms.org.in/
Subject:BRAND BUILDING
Lesson : BRAND LEVERAGING

Faculty Name: Vishal Desai

1. BRAND LEVERAGING Subject: BRAND BUILDING Faculty Name: Vishal Desai Deviprasad Goenka Management College of Media Studies ( dgmcms.org.in ) Batch (BMM class of 2015 ) Year (TY) India ’ s premier M-school

2. Brand Leveraging A brand leveraging strategy uses the power of an existing brand to expand the product class or to support a company’s entry into a new product category Brand leveraging is an important form of new product introduction because it provides consumers with a sense of familiarity by carrying positive brand characteristics and attitudes into a new product category. Instant recognition of the brand is established, and consumers with a favorable brand opinion are likely to try a new product they perceive to have similar quality level and attributes as their original favorite

3. Leveraging Strategy

4. Line Extension Strategies Product Size ( Bisleri ) Ingredient ( Pepsodent ) Flavors (Tropicana) Colour ( Sunsilk ) Form (Vim)

5. Line Extension When a variant is added to an existing brand it is called Line Extension. The variant could be in terms of flavor, package size, colour , form,nutritional content or special additives which targets a sub-set of consumers The objective is to satisfy different consumer needs or market segments by providing more variety. Eg :-Nestle Maggi is available in different flavors like masala , chicken , tomato,curry and cuppa mania Eg : Pril Bar’s Mango-vinegar variant in Uttar Pradesh Nestle has also launched Atta noodles and Maggi Cuppa Mania

6. Why Line Extension To fulfill customer’s need for variety To cater to sub-segments with in a larger segment To capture customers with different paying capacity Increase Capacity Utilization Increase Profitability To capture more shelf space To fight competition

7. Stretching the brand vertically BMW Mercedez Benz

8. Advantages of stretching the brand vertically Offers a premium version of existing brand to quality conscious consumers. Eg : Nano Twist with loaded features, Alto K 10 Eg : Credit Card - Silver, Gold, Titanium, Signature Eg : Cadbury’s Dairy Milk Silk Helps target value conscious consumers by trading down. Eg : Stripped down version of Mr. Muscle and Evian water Eg : Stripped down version of Original DVD without bonus content (show pack) To counter competition during maturity stage of the brand when price is the only deciding factor in consumer’s purchase decision To expand market opportunities in other countries where per capita income is low

9. Disadvantages of stretching the brand vertically Damage to the core brand as consumers may feel that premium charged to them was not justified Increase in volume may not justify the reduction in price Reduction in margins of trade channel partners

10. Brand Extension When an existing brand name is used to introduce a new product in a different product category. Eg : Ponds => Talc, Cold Cream, Facewash , Moisturising lotion,etc Eg : Horlicks => Nutribar , Foodles Eg : Catch => Table Salt, Black Salt, Pepper,etc Eg : Kingfisher => Beer, Airlines, Mineral water, Training Academy Eg : Dabur => Amla Hair Oil, Chawyanprash,Pudin Hara Note: Ponds Toothpaste was a failure

11. Types of Brand Extensions Image related extension Eg : Britannia has an image of confectionary brand or food products brand and hence has launched cakes, biscuits and breads. OR Amul is known for milk products and hence has launched butter,ghee,cheese,milk,etc Un related Extension: Extension to unrelated product category Eg : Wills Cigarettes to Wills lifestyle apparels Complementary Product Extension Eg : Colgate Tooth paste and Colgate tooth brush Eg : Eveready Battery and Eveready Torches

12. Expertise related extension: Eg : Maruti venturing into 2 wheelers Hero venturing into 4 wheelers Inox venturing into multiplexes Distinct feature related extension Eg : Himani Navratna Hair Oil & Navratna Cool Talc Class Exercise (Group) – Name a brand that has been extended and the type of extension

13. Brand Extension Range Brands A range brand is one that creates an identity that works across product classes. A range brand is some times called a mega-brand. Eg : Colgate , Gillette, Adidas /Nike/Reebok

14. Brand Extension Ad-Hoc Brand Extension This kind of extension is used as a strategy for response to a short term event. It is not planned to last. Ad Hoc brands are generally built on internal goal based strategy. They are based on either monetary value or sentimental value that the company gains by introducing a new brand extension. Eg : Pepsi launched Pepsi Blue during Cricket World Cup 2003,Pepsi Gold during World Cup 2007, and Pepsi Atom during IPL 2013

15. Limitation of brand extension At times the brand cannot be stretched to unrelated categories Eg : Amul could not be stretched to Edible Oil Eg : Britannia cannot be stretched to Shoes

16. Disadvantages of brand extension Failure of brand to add value Eg : Vanilla Coke failed in 2004 Problem of fit Eg : Ponds tooth paste was a failure Failure to carry association of parent brand Eg : Lux Shampoo was a failure as Lux soap was strongly positioned as a beauty soap where as Lux Shampoo did not carry that association Creation of Undesirable associations Eg : Reliance mobile phones when launched had lot of hidden charges and negative association was created

17. Disadvantages of brand extension Effect of a brand crisis Eg : Cadbury’s worm infestation incident had negative effect on all Cadbury’s products Failure of new brand If the new brand which is launched encounters adverse association with the consumer the original parent brand’s image may also be diluted.

18. Co-Branding Co-Branding also called-Brand Bundling or Brand Alliance; is when two or more existing brands are combined into a joint product or are marketed together in some way. It can be termed as marketing partnership between two brands. The objective is to combine the strength of two brands , in order to increase the premium consumers are willing to pay. It makes the co-branded product more resistant to copying. It combines the different perceived properties associated with these brands to make a single product

19. Types of Co-branding Ingredient branding: A branded ingredient or component, that has its own brand identity, is used to produce another renowned brand/product. This ingredient or constituent brand is sub-ordinate to the primary brand. Usually the ingredient brand is the biggest supplier to the primary brand The ingredient brand should be unique and should be a major brand or should be protected by a patent

20. Primary Brand Ingredient Brand PCs Intel Inside Stereos Dolby Sunsilk Keratin Micro Technology Orient Fans PSPO Maruti Suzuki K Series Engine Bajaj Pulsar DTSI Hyundai CRDi Good Night Active + Pantene Pro-V Saffola LoSorb Technology Kent Water Purifier Mineral RO Technology Fiama Di Wills Derma Revitalizers

21. Advantages of Ingredient Branding Branded ingredients are often seen as a signal of quality. There is uniformity in quality of ingredient brand which helps maintain consistency in quality of primary brand. Ingredient brands can become industry standards and consumers would not buy a product that does not contain the ingredient brand.

22. Composite Branding The bundling of two brands to provide an enhanced customer benefit or reduced cost. Composite co-branding refers to use of two or more renowned brand names in a way that can collectively offer a distinct product/service that could not be possible individually Egs : Reliance CDMAS with LG handset Nokia with Vodafone Airtel with iPhone Coca-Cola with McDonalds Audi Cars with Bang & Olufsen Sound System Channel V Racing Pack & AXN Action Pack

23. Advantages of Co-branding Cost effective way of marketing a product Boost to the brand image of both the companies while increasing sales volumes and profits If one of the brand is a service brand and the other is a tangible product brand , the service brand gets a tangible extension. Increased width of distribution due to distribution strength of both the companies Advantageous for a new brand to tie-up with an existing brand as it helps the new brand to understand the market dynamics with the help of the existing brand

24. Disadvantages of co-branding If the two brands involved do not show consistent brand values, identity and personality there are chances of dilution of brand image Co-branding can fail when the two brands have entirely different markets and are entirely different If the vision and mission of the two brands involved are different then composite branding may fail If the customers encounter any adverse experience the brand image of both the brands may suffer

25. Advantages of brand leveraging It increase advertising efficiencies It increases life cycle of a brand Minimises introductory expenses Minimises marketing & distribution expenses Encourages trial purchase Satisfies variety seeking consumers

26. Existing New Existing New Brand Product

27. Existing New Existing New Brand Product

28. Multi Brand Strategy A company launches multiple brands for the same product category Each brand caters to a distinct market segment Each brand has a distinct brand identity and personality

29. Advantages of multi brand strategy A company can target the entire market with different brands catering to each separate market segment A company can enjoy economies of scale because key ingredients / raw materials are the same for each product A consumer gets wide range of options to choose from A company is able to capture larger shelf space at retail end

30. Disadvantages of multi brand strategy All brands may not be successful thus leading to wastage of marketing and advertising expenses. The company may spread it self very thin if it launches too many brands with small market share for each brand If there is no difference between two brands, one may cannibalize the other.