kellersbm312-130514105022-phpapp02 (1).pdf

kellersbm312-130514105022-phpapp02 (1).pdf

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  12.1 CHAPTER 12: CHAPTER 12: INTRODUCINGAND NAMING NEW PRODUCTS INTRODUCING AND NAMING NEW PRODUCTS AND BRAND EXTENSIONS AND BRAND EXTENSIONS Kevin Lane Keller Kevin Lane Keller Tuck School of Business Tuck School of Business Dartmouth College Dartmouth College
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  12.2 Leverage the Brand Leveragethe Brand  Firms are seeking to build “power” or “mega” Firms are seeking to build “power” or “mega” brands that establish a broad market footprint, brands that establish a broad market footprint, appealing to multiple customer segments with appealing to multiple customer segments with multiple products all underneath the brand multiple products all underneath the brand umbrella. umbrella.
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  12.3 Ansoff’s Growth ShareMatrix Ansoff’s Growth Share Matrix Current Current Products Products New New Products Products Current Current Markets Markets Market Market penetration penetration strategy strategy Product Product development development strategy strategy New New Markets Markets Market Market development development strategy strategy Diversification Diversification strategy strategy
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  12.4 Brand Extensions Brand Extensions When a firm uses an established brand name to When a firm uses an established brand name to introduce a new product introduce a new product  Brand extension classification Brand extension classification  Line extension Line extension  Using a sub-brand to target a new market segment within Using a sub-brand to target a new market segment within the same product category the same product category  Category extension Category extension  Using the parent brand in a different product category Using the parent brand in a different product category
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  12.5 General Strategies forEstablishing a Category General Strategies for Establishing a Category Tauber’s Franchise—Extension Tauber’s Franchise—Extension  Introduce the same product in a different form. Introduce the same product in a different form. Example: Ocean Spray Example: Ocean Spray Cranberry Juice Cocktail Cranberry Juice Cocktail  I Introduce products that contain the brand’s distinctive taste, ingredient, or ntroduce products that contain the brand’s distinctive taste, ingredient, or component. component. Example: Philadelphia cream cheese salad dressing Example: Philadelphia cream cheese salad dressing  Introduce companion products for the brand. Introduce companion products for the brand. Example: Coleman Example: Coleman camping equipment camping equipment  Introduce products relevant to the customer franchise of the brand. Introduce products relevant to the customer franchise of the brand. Example: Gerber insurance Example: Gerber insurance  Introduce products that capitalize on the firm’s perceived expertise. Introduce products that capitalize on the firm’s perceived expertise. Example: Honda lawn mowers Example: Honda lawn mowers  Introduce products that reflect the brand’s distinctive benefit, attribute, or Introduce products that reflect the brand’s distinctive benefit, attribute, or feature. feature. Example: Lysol’s “deodorizing” household cleaning Example: Lysol’s “deodorizing” household cleaning products products  Introduce products that capitalize on the distinctive image or prestige of the Introduce products that capitalize on the distinctive image or prestige of the brand. brand. Example: Calvin Klein clothes Example: Calvin Klein clothes
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  12.6 Advantages of Extensions Advantagesof Extensions  Facilitate new product acceptance Facilitate new product acceptance  Improve brand image Improve brand image  Reduce risk perceived by customers Reduce risk perceived by customers  Increase the probability of gaining distribution and trial Increase the probability of gaining distribution and trial  Increase efficiency of promotional expenditures Increase efficiency of promotional expenditures  Reduce costs of introductory and follow-up marketing Reduce costs of introductory and follow-up marketing programs programs  Avoid cost of developing a new brand Avoid cost of developing a new brand  Allow for packaging and labeling efficiencies Allow for packaging and labeling efficiencies  Permit consumer variety seeking Permit consumer variety seeking
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  12.7 Advantages of Extensions(Cont.) Advantages of Extensions (Cont.)  Provide feedback benefits to parent brand Provide feedback benefits to parent brand  Clarify brand meaning Clarify brand meaning  Enhance the parent brand image Enhance the parent brand image  Bring new customers into brand franchise and Bring new customers into brand franchise and increase market coverage increase market coverage  Revitalize the brand Revitalize the brand  Permit subsequent extensions Permit subsequent extensions
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  12.8 Disadvantages of Extensions Disadvantagesof Extensions  Can confuse or frustrate consumers Can confuse or frustrate consumers  Can encounter retailer resistance Can encounter retailer resistance  Can fail and hurt parent brand image Can fail and hurt parent brand image  Can succeed but cannibalize sales of parent brand Can succeed but cannibalize sales of parent brand  Can succeed but diminish identification with any one Can succeed but diminish identification with any one category category  Can succeed but hurt the image of the parent brand Can succeed but hurt the image of the parent brand  Can dilute brand meaning Can dilute brand meaning  Can cause the company to forgo the chance to develop a Can cause the company to forgo the chance to develop a new brand new brand
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  12.9  Managerial assumptions Managerialassumptions  Consumers have some awareness of and positive Consumers have some awareness of and positive associations about the brand in memory associations about the brand in memory  At least some of these positive associations are At least some of these positive associations are evoked by the brand extension evoked by the brand extension  Negative associations are not transferred from the Negative associations are not transferred from the parent brand parent brand  Negative associations are not created by the brand Negative associations are not created by the brand extension extension Understanding How Customers Evaluate Brand Understanding How Customers Evaluate Brand Extensions Extensions
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  12.10 Creating Extension Equity CreatingExtension Equity 1. 1. Salience Salience of parent brand associations in the of parent brand associations in the minds of consumers in the extension context minds of consumers in the extension context 2. 2. Favorability Favorability of any inferred associations in the of any inferred associations in the extension context extension context 3. 3. Uniqueness Uniqueness of any inferred associations in the of any inferred associations in the extension context extension context
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  12.11 Contributing to ParentBrand Equity Contributing to Parent Brand Equity  How compelling the evidence is concerning the corresponding attribute or benefit association in the extension context  How relevant or diagnostic the extension evidence is concerning the attribute or benefit for the parent brand  How consistent the extension evidence is with the corresponding parent brand associations  How strong existing attribute or benefit associations are held in consumer memory for the parent brand
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  12.12 Successful Extensions Successful Extensions Must create points-of-parity and points-of- Must create points-of-parity and points-of- difference in extension category difference in extension category  Must recognize competitive reactions Must recognize competitive reactions  Must enhance points-of-parity and points-of- Must enhance points-of-parity and points-of- difference of parent brand difference of parent brand  Must maximize the advantages and minimize Must maximize the advantages and minimize the disadvantages of brand extensions the disadvantages of brand extensions
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  12.13 Successful Category Extensions SuccessfulCategory Extensions  Ivory shampoo and conditioner  Vaseline Intensive Care skin lotion  Hershey chocolate milk  Jell-O pudding pops  Visa traveler’s checks  Sunkist orange soda  Colgate toothbrushes  Mars ice cream bars  Arm & Hammer toothpaste  Bic disposable lighters  Aunt Jemima pancake syrup  Honda lawn mowers
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  12.14 Unsuccessful Category Extensions UnsuccessfulCategory Extensions  Campbell’s tomato sauce  LifeSavers chewing gum  Cracker Jack cereal  Harley Davidson wine coolers  Hidden Valley Ranch frozen entrees  Bic perfumes  Ben-Gay aspirin  Kleenex diapers  Levi’s Tailored Classics suits  Nautilus athletic shoes  Domino’s fruit-flavored bubble gum  Smucker’s ketchup  Fruit of the Loom laundry detergent
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  12.15 Evaluating Brand Extension EvaluatingBrand Extension Opportunities Opportunities  Define actual and desired consumer knowledge Define actual and desired consumer knowledge about the brand about the brand  Identify possible extension candidates Identify possible extension candidates  Evaluate the potential of the extension candidate Evaluate the potential of the extension candidate  The likelihood that the extension will realize the The likelihood that the extension will realize the advantages and avoid the disadvantages of brand advantages and avoid the disadvantages of brand extensions. As with any new product, analysis of extensions. As with any new product, analysis of consumer, corporate, and competitive factors can be consumer, corporate, and competitive factors can be useful. useful.
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  12.16 Evaluating Brand Extension EvaluatingBrand Extension Opportunities Opportunities  Design marketing programs to launch extension Design marketing programs to launch extension  Building brand equity for a brand extension requires Building brand equity for a brand extension requires choosing brand elements, designing the optimal choosing brand elements, designing the optimal marketing program to launch the extension, and marketing program to launch the extension, and leveraging secondary associations. leveraging secondary associations.  Evaluate extension success and effects on parent Evaluate extension success and effects on parent brand equity brand equity
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  12.17 When are brandextensions appropriate? When are brand extensions appropriate?  If they see some basis of “fit” or similarity If they see some basis of “fit” or similarity between the proposed extension and parent between the proposed extension and parent brand brand  The major mistake in evaluating extension The major mistake in evaluating extension opportunities is failing to take all of consumers’ opportunities is failing to take all of consumers’ brand knowledge structures into account. brand knowledge structures into account.  Often, marketers mistakenly focus on only one Often, marketers mistakenly focus on only one brand association and ignore other potentially brand association and ignore other potentially important brand associations in the process. important brand associations in the process.
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  12.18 Evaluating Brand ExtensionOpportunities Evaluating Brand Extension Opportunities  Define actual and desired consumer knowledge Define actual and desired consumer knowledge about the brand about the brand  Identify possible extension candidates Identify possible extension candidates  Evaluate the potential of the extension Evaluate the potential of the extension candidate candidate  Design marketing programs to launch extension Design marketing programs to launch extension  Evaluate extension success and effects on parent Evaluate extension success and effects on parent brand equity brand equity