AGENDA

1. FACTORS INFLUENCING CONSUMER DECISION-MAKING ON BRAND EXTENSIONFOR COSMETIC PRODUCTS AMONG THAI CONSUMERSPresented byVoravut CharusomboonPrin Laksitamas D.B.A.Department of Doctoral Business Administration in MarketingSiam University

2. AGENDA • Objective • Main ideas about Brand Extensions • Proposed Model • The model adapted from Voravut • The research Finding • Sumary • Reference

3. Objective • To present the phenomenon of brand extension and investigates the correlation of consumer perception on the parent brand and the extended brand personalities.

4. Brand extension or brand stretching is a marketing strategy in which a company marketing a product with a well-developed image uses the same brand name in a various product category.

5. Perception is a necessary psychological process in order to understand how consumers recognition the new products made through brand extension.

6. During the last years, the ethnic cosmetic trends and new consumption patterns make a niche for many cosmetic manufacturers and marketers to yield the market share and set up its new or stronger position in this segment. There are doubts that the brand extension might affect the parent brand and its extended brands in various ways.

7. Main ideas aboutBrand Extensions Positive feeling According to Keller (1998) and Apostolopoulou (2002), brand extensions help organizations by increasing their strength, their customer base and their longterm viability.

8. Kapferer (1997), one of the influential researchers in branding, marks in his context that although high cost are paid for companies with brands, companies are in fact purchasing certain places in the minds of potential consumers. He adds that awareness, image, trust and reputation could promise future success for the brand. So the value of a brand is partly represented by its ability to build such cash flows.

9. According to Keller & Sanjay (2003 ), one of the most significant advantages of a strong trademark is the fact that it creates it easier for consumers to accept a brand extension. Due to the fact that brand extension diminishes the risk regarding consumers and reduces the cost with marketing and promotion, it has become the most frequent product tactics over the last two decades.

10. Apostolopoulou (2002) found six keys to successful brand extension: • The strength of the parent brand • The recognized fit between the parent brand and the extended product • The promotional support and positioning of the extended brand • The quality of the extension product • The distribution tactics • The management of the expansion

11. Main ideas aboutBrand Extensions Negative feeling Chen & Chen (2000) from study performed inTaiwan. The extended brand is perceived as cannibalizing the parent brand by eating into the total sales of the main brand. An extension can make consumer confusion concerning the quality of the new created products. Brand extension is seen as a lazy version of a new brand.

12. According to Murphy (1990, p.110), “to improve new brands is extremely expensive, highly risky and takes a long time.” When he speaks about expenses, Murphy (1990) does not only mean the cost with making a new brand concept but also the costs with advertising in order to launch the new brand on the market as well as to support it during its whole life cycle.

13. ModelProposed External influence effects on customers’ decision-making. Internal influence effects on customers’ decision-making.

14. Experiences External Influences Culture Social Status Reference Groups Marketing Activities Decision-making On brand extension For cosmetic products Perception Expectation Of need Internal Influences Desires Perception Personality Emotions Attitudes Experiences

15. The model • Despite many researchers have different perspectives relating brand extension , the model is tracking for cosmetic marketing relating consumers’ making decision.

16. The Research Finding Expectation Perception and Attitude Brand judging Brand Knowledge Brand Extensions Eroding Promotion offers Cosmetic Product Shield environment To achieve growth

17. Sumary Sum marizing that six steps from research finding will probe and successfully produce brand extension for cosmetic products.

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