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CHAPTER:12 Introducing and Naming New Products and Brand Extensions

CHAPTER:12 Introducing and Naming New Products and Brand Extensions. Learning Objectives. Define the different types of brand extensions List the main advantages and disadvantages of brand extensions

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CHAPTER:12 Introducing and Naming New Products and Brand Extensions

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  1. CHAPTER:12Introducing andNaming New Productsand Brand Extensions

  2. Learning Objectives • Define the different types of brand extensions • List the main advantages and disadvantages of brand extensions • Summarize how consumers evaluate extensions and how extensions contribute to parent brand equity • Outline the key assumptions and success criteria for brand extensions

  3. New Products and Brand Extensions • Brand extension: When a firm uses an established brand name to introduce a new product • Line extension - Adds a different variety, a different form or size, or a different application for the brand • Category extension - Marketers apply the parent brand to enter a different product category from the one it currently serves

  4. Advantages of Extensions

  5. Facilitate New-Product Acceptance

  6. Provide Feedback Benefits to the Parent Brand

  7. Disadvantages of Brand Extensions

  8. Understanding How Consumers Evaluate Brand Extensions • Managerial assumptions • Brand extensions and brand equity • Vertical brand extensions

  9. Managerial Assumptions • Consumers have some awareness of and positive associations about the parent brand in memory • At least some of these positive associations will be evoked by the brand extension • Negative associations are not transferred from the parent brand • Negative associations are not created by the brand extension

  10. Brand Extensions and Brand Equity • Creating extension equity • Contributing to parent brand equity

  11. Vertical Brand Extensions • Pros and cons • Examples • Naming strategies

  12. Evaluating Brand Extension Opportunities • Define actual and desired consumer knowledge about the brand • Identify possible extension candidates • Evaluate the potential of the extension candidate • Design marketing programs to launch extension • Evaluate extension success and effects on parent brand equity

  13. Figure 12.7 - Brand Extension Guidelines Based on Academic Research

  14. Figure 12.7 - Brand Extension Guidelines Based on Academic Research

  15. To Sum Up… • Brand extensions occur when a firm uses an established brand name to introduce a new product • The basic assumption behind brand extension • Consumers have some awareness of and positive associations about the parent brand in memory • Brand extension will evoke atleast some of these associations

  16. To Sum Up... • The extension’s ability to establish its own equity will depend on: • Salience of consumers’ associations with the parent brand • How compelling and relevant is the evidence about the corresponding attribute • How strong consumers’ existing attribute or benefit associations are for the parent brand • To evaluate brand extension opportunities, marketers need to consider strategies by applying managerial judgment and consumer research

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