Growing and Sustaining

Brand Equity
 Chapter 11: Chapter 12:
Designing and Introducing and
Implementing Brand Naming New
Architecture Products
Strategies and Brand Extensions
 Learning Objectives

CHAPTER 11: CHAPTER 12:

✓ Define the key components of brand ✓ Define the different types of brand
architecture. extensions.
✓ Outline the guidelines for developing a ✓ List the main advantages and disadvantages
good brand portfolio. of brand extensions.
✓ Assemble a basic brand hierarchy for a ✓ Summarize how consumers evaluate
brand. extensions and how extensions contribute
✓ Describe how a corporate brand is to parent brand equity.
different from a product brand. ✓ Outline the key assumptions and success
✓ Explain the rationale behind cause criteria for brand extensions.
marketing and green marketing.

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 11
Designing and
Implementing Brand
Architecture Strategies

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 “
“The successful launch of new
products and services is of
paramount importance to firms’
long-term financial prosperity.”

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 Two Questions:

◈ What is the best way to characterize a firm’s

brand architecture strategy?
◈ What guidelines exist for choosing the right
combinations of brand names and other
brand elements to best manage brand equity
across the entire range of a firm’s products?

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 MAIN CONTENT
Three-step process to develop an Two important Three specific issues
effective Brand Architecture Strategy Strategic Tools in managing a
Corporate Brand

Brand Corporate Social

STEP 1 Defining Brand Potential
Portfolios Responsibility

Identifying Brand Extension Brand Corporate Image

STEP 2
Opportunities Hierarchies Campaigns

Branding New Products and Corporate Name

STEP 3
Services Changes

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 BRAND ARCHITECTURE STRATEGY

To clarify brand awareness: To improve brand image:

Improve consumer Maximize transfer of equity
understanding and between the brand and
communicate similarity and individual products and services
differences between individual to improve trial and repeat
products and services purchase

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 THE SCIENCE OF BRANDING 11-1

Brand-Product Matrix
◈ Rows: brand–product
relationships
◈ Columns: product–brand
relationships

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 BRAND ARCHITECTURE STRATEGY

Three-step process to develop an Three important characteristics:

effective Brand Architecture Strategy
1. Articulating the Brand Vision
2. Defining the Brand Boundaries
STEP 1 Defining Brand Potential
3. Crafting the Brand Positioning
Identifying Brand Extension
STEP 2
Opportunities

Branding New Products and

STEP 3
Services

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 BRAND ARCHITECTURE STRATEGY

Three-step process to develop an A brand extension is a new product

effective Brand Architecture Strategy
introduced under an existing brand
name.
STEP 1 Defining Brand Potential
1. Line extensions
2. Category extensions
Identifying Brand Extension
STEP 2
Opportunities

Branding New Products and

STEP 3
Services
CHAPTER 12

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 BRAND ARCHITECTURE STRATEGY

Three-step process to develop an Decide on the specific brand

effective Brand Architecture Strategy
elements to use for any particular
new product or service associated
STEP 1 Defining Brand Potential with the brand.
1. Branded House Strategy: B2B
Identifying Brand Extension
STEP 2
Opportunities 2. House of Brands Strategy: FMCG,
SMCG
Branding New Products and
STEP 3
Services

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 STRATEGIC TOOLS

Two important A brand portfolio includes all brands sold by a

Strategic Tools
company in a product category.
1. Maximize market coverage
Brand
Portfolios 2. Minimize brand overlap
Brand
Hierarchies Low-End, Entry-
Cash Cows Level or High-
Flankers
End, Prestige
Brands

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 STRATEGIC TOOLS
A brand hierarchy is a useful means of graphically portraying a
Two important
Strategic Tools firm’s branding strategy. There are different ways to define brand
elements and levels of the hierarchy:

Brand
• Corporate or Company Brand Level
1
Portfolios
• Family Brand Level
2
Brand
Hierarchies • Individual Brand Level
3

• Modifier Level
4

• Product Descriptor
5

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 STRATEGIC TOOLS

Two important
Strategic Tools

Brand
Portfolios

Brand
Hierarchies

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 STRATEGIC TOOLS
Guidelines for Brand Hierarchy Decisions:
Two important
Strategic Tools
1. Decide on which products are to be introduced

Brand 2. Decide on the number of levels

Portfolios

3. Decide on the levels of awareness and types of

Brand associations to be created at each level
Hierarchies
4. Decide on how to link brands from different levels for a
product

5. Decide on how to link a brand across products

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 STRATEGIC TOOLS
Branding Strategy Screen:
Two important
Strategic Tools

Brand
Portfolios

Brand
Hierarchies

Evaluate optimal equity upside and risk

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 CORPORATE BRAND
A corporate brand is distinct from a product brand in that it can encompass a
much wider range of associations
Common Product Attributes, Benefits,
or Attitudes

Some
People and Relationships
Important
Corporate
Image
Associations Values and Programs

Corporate Credibility

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 CORPORATE BRAND

Three specific issues Managing the Corporate Brand

in managing a
Corporate Brand

Corporate Social
Responsibility

Corporate Image
Campaigns

Corporate Name
Changes

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 BRAND ARCHITECTURE GUIDELINES

• Adopt a strong customer focus

1

• Create broad, robust brand platforms

Marketers 2
should keep the
following five • Avoid overbranding and having too many brands
3
guidelines in
mind • Selectively employ sub-brands
4

• Selectively extend brands

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BRAND ARCHITECTURE

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22
 BRAND FOCUS 11.0

Cause Marketing
Green Marketing

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 12
Introducing and
Naming New Products
and Brand Extensions

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 “
“…considers in more detail the
role of product strategy in
creating, maintaining, and
enhancing brand equity…”

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 MAIN CONTENT
Guidelines for
Brand • Advantages Consumers introducing and
evaluate brand naming new
Extention • Disadvantages extensions products and
brand extensions

Key academic research

findings on brand extensions

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 NEW PRODUCTS AND BRAND EXTENSIONS

A brand extension
occurs when a
firm uses an
established brand
name to
introduce a new
product

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 NEW PRODUCTS AND BRAND EXTENSIONS

New • Family brand

brand

Sub- • Parent brand

brand
Exist • Sub-brand
brand

Brand Extention

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 BRAND EXTENSIONS

Two general categories

Line Category
extension extension

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BRAND EXTENSIONS - ADVANTAGES OF BRAND EXTENSIONS
Provide Feedback Benefits to the
Facilitate New Product Acceptance
Parent Brand and Company
• Improve brand image • Clarify brand meaning
• Reduce risk perceived by • Enhance the parent brand image
customers • Bring new customers into brand
• Increase the probability of gaining franchise and increase market
distribution and trial coverage
• Increase efficiency of promotional • Revitalize the brand
expenditures • Permit subsequent extensions
• Reduce costs of introductory and
follow-up marketing programs
• Avoid cost of developing a new
brand
• Allow for packaging and labeling
efficiencies
• Permit consumer variety-seeking
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 BRAND EXTENSIONS - ADVANTAGES OF EXTENSIONS

Lancôme is one of L’Oréal’s most

successful global brands

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BRAND EXTENSIONS - ADVANTAGES OF EXTENSIONS

Expanding Brand Meaning through Extensions

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BRAND EXTENSIONS - DISADVANTAGES OF BRAND EXTENSIONS

DISADVANTAGES OF BRAND EXTENSIONS

• Can confuse or frustrate consumers

• Can encounter retailer resistance
• Can fail and hurt parent brand image
• Can succeed but cannibalize sales of parent brand
• Can succeed but diminish identification with any one category
• Can succeed but hurt the image of parent brand
• Can dilute brand meaning
• Can cause the company to forgo the chance to develop a new
brand

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 BRAND EXTENSIONS - DISADVANTAGES OF BRAND EXTENSIONS

The enormous success of Kindle

gives Amazon another brand on
which to build in the
marketplace

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 HOW CONSUMERS EVALUATE BRAND EXTENSIONS

Successful Category Extensions Unsuccessful Category Extensions

• Dove shampoo and conditioner • Campbell’s tomato sauce

• Vaseline Intensive Care skin lotion • LifeSavers chewing gum
• Hershey chocolate milk • Cracker Jack cereal
• Jell-O Pudding Pops • Harley-Davidson wine coolers
• Visa traveler’s checks • Hidden Valley Ranch frozen entrees
• Sunkist orange soda • Ben-Gay aspirin
• Colgate toothbrushes • Kleenex diapers
• Mars ice cream bars • Clorox laundry detergent
• Arm and Hammer toothpaste • Levi’s Tailored Classics suits
• Bic disposable lighters • Nautilus athletic shoes
• Honda lawn mowers • Domino’s fruit-flavored bubble gum
• Mr. Clean Auto Dry car wash system • Smucker’s ketchup
• Fendi watches • Fruit of the Loom laundry detergent
• Porsche coffee makers • Coors Rocky Mountain Spring Water
• Jeep strollers • Cadbury soap

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 HOW CONSUMERS EVALUATE BRAND EXTENSIONS

Consumers have some awareness of and positive

Managerial
associations about the parent brand in memory
Assumptions

At least some of these positive associations will

Four basic be evoked by the brand extension
conditions
must generally Negative associations are not transferred from
hold true: the parent brand

Negative associations are not created by the brand

extension

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 HOW CONSUMERS EVALUATE BRAND EXTENSIONS

Brand Extensions Creating

and Brand Equity Extension Contributing to
Equity Parent Brand
Equity
salient
compelling

strongly relevant
unique favorable

consistent

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 HOW CONSUMERS EVALUATE BRAND EXTENSIONS

Vertical
Brand Extensions

Vertical brand extensions, which extend the brand up

into more premium market segments or down into
more value-conscious segments, are a common
means of attracting new groups of consumers

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 EVALUATING BRAND EXTENSION OPPORTUNITIES

Define Evaluate
Evaluate
Actual and Design Extension
Identify the
Desired Marketing Success
Possible Potential of
Consumer Programs and Effects
Extension the
Knowledge to Launch on Parent
Candidates Extension
about the Extension Brand
Candidate
Brand Equity

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 EVALUATING BRAND EXTENSION OPPORTUNITIES

Steps in
Successfully
Introducing
Brand
Extensions

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EXTENSION GUIDELINES BASED ON ACADEMIC RESEARCH

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 Brand Focus 12.0

Scoring Brand Extensions

(p.471)

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Thank for your listening!!

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