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New products and brand extensions
When a firm introduces anew product, it has three main choices as to how to brand it:1. It can develop a new brand, individually chosen for the new product.2. It can apply, in some way, one of its existing brands.3. It can use a combination of a new brand with an existing brand.A
brand extension
is when a firm uses an established brand name to introduce a new product.When a new brand is combined with an existing brand, the brand extension can also be called a
*sub-brand.
An existing brand that gives birth to a brand extension is referred to as the
*parent*brand.
If the*parent brand is already associated with multiple products through brand*extensions,then it may also be called a
*family brand.
Brand extensions can be broadly classified into twogeneral categories:
*Line extension:
The parent brand is used to brand a new product that targets a new marketsegment within a product category currently served by the parent brand. A line extension ofteninvolves a different flavor or*ingredient variety, a*different form or*size, or a*different applicationfor the brand (e.g., Head & Shoulders Dry Scalp shampoo).Most new products are line extensions—typically 80 percent to 90 percent in any one year.Moreover, many of the most successful new products, as*rated by various sources, are extensions(e.g., Microsoft Xbox videogame system, Apple iPod digital music player, and BMW miniautomobile). Nevertheless, many new products are intro duced each year as new brands (e.g.,Gleevec oncology drug, ReplayTV digital video recorders, and Harmony low-fat cereal).Extensions can come in all forms. One well-known branding expert, Edward Tauber, identifiesthe following seven general strategies for establishing a category—or what he*calls a franchise—*extension
1.
*Introduce the same product in a different form.
Examples: Ocean Spray Cranberry JuiceCocktail and Jell-0 Pudding Pops
2.
*Introduce*products*that*contain*the*brand's*disti nctive*taste,*ingredient,*or*component.
Examples: Philadelphia cream cheese salad dressing and Haagen-Dazs cream liqueur*
3.
*Introduce companion products for the brand.
Examples: Coleman camping equipment andDuracell Durabeam flashlights
4.
*Introduce products relevant to the customer franchise of the brand.
Examples:*Gerber insur*ance and Visa traveler's checks
5.
*Introduce products that capitalize on the firm's perceived expertise.
Examples: Honda lawnmowers and Canon photocopy machines
6.
*Introduce products that reflect the brand's distinctive benefit, attribute, or feature.
Example:LysoFs "deodorizing" household cleaning products and Ivory's "mild" cleaning products
7.
*Introduce products that capitalize on the distinctive image or prestige of the brand.
Examples:Calvin Klein clothes and accessories and Porsche sunglasses
Advantages Of Extensions
The high failure rate of new products is well documented. Marketing analysts estimate that*perhaps only 2 of 10 new*products will be successful, or maybe even as few*as 1 of*10. As noted*previously, new products can fail for a number of reasons. Robert McMath, who oversees acollection of over 75,000 once-new consumer products called the New Products Showcase andLearning Center in Ithaca, New York, identifies nine main rea sons for product failure1. The market was too small (insufficient demand for type of product).2. The product was a poor match for the company.3. The product was justified on inadequate or inaccurate marketing research, or the companyignored research results
brand extension
is when a firm uses an established brand name to introduce a new product.When a new brand is combined with an existing brand, the brand extension can also be called a
*sub-brand.
An existing brand that gives birth to a brand extension is referred to as the
*parent*brand.
If the*parent brand is already associated with multiple products through brand*extensions,then it may also be called a
*family brand.
Brand extensions can be broadly classified into twogeneral categories:
*Line extension:
The parent brand is used to brand a new product that targets a new marketsegment within a product category currently served by the parent brand. A line extension ofteninvolves a different flavor or*ingredient variety, a*different form or*size, or a*different applicationfor the brand (e.g., Head & Shoulders Dry Scalp shampoo).Most new products are line extensions—typically 80 percent to 90 percent in any one year.Moreover, many of the most successful new products, as*rated by various sources, are extensions(e.g., Microsoft Xbox videogame system, Apple iPod digital music player, and BMW miniautomobile). Nevertheless, many new products are intro duced each year as new brands (e.g.,Gleevec oncology drug, ReplayTV digital video recorders, and Harmony low-fat cereal).Extensions can come in all forms. One well-known branding expert, Edward Tauber, identifiesthe following seven general strategies for establishing a category—or what he*calls a franchise—*extension
1.
*Introduce the same product in a different form.
Examples: Ocean Spray Cranberry JuiceCocktail and Jell-0 Pudding Pops
2.
*Introduce*products*that*contain*the*brand's*disti nctive*taste,*ingredient,*or*component.
Examples: Philadelphia cream cheese salad dressing and Haagen-Dazs cream liqueur*
3.
*Introduce companion products for the brand.
Examples: Coleman camping equipment andDuracell Durabeam flashlights
4.
*Introduce products relevant to the customer franchise of the brand.
Examples:*Gerber insur*ance and Visa traveler's checks
5.
*Introduce products that capitalize on the firm's perceived expertise.
Examples: Honda lawnmowers and Canon photocopy machines
6.
*Introduce products that reflect the brand's distinctive benefit, attribute, or feature.
Example:LysoFs "deodorizing" household cleaning products and Ivory's "mild" cleaning products
7.
*Introduce products that capitalize on the distinctive image or prestige of the brand.
Examples:Calvin Klein clothes and accessories and Porsche sunglasses
Advantages Of Extensions
The high failure rate of new products is well documented. Marketing analysts estimate that*perhaps only 2 of 10 new*products will be successful, or maybe even as few*as 1 of*10. As noted*previously, new products can fail for a number of reasons. Robert McMath, who oversees acollection of over 75,000 once-new consumer products called the New Products Showcase andLearning Center in Ithaca, New York, identifies nine main rea sons for product failure1. The market was too small (insufficient demand for type of product).2. The product was a poor match for the company.3. The product was justified on inadequate or inaccurate marketing research, or the companyignored research results