Rationale For Brand Extension Marketing Essay

Brand extension is beneficial in boosting new and already existing sections. Through brand expansion companies can aim for those sections which antecedently weren't explored or inactive.

Brand expansion can be beneficial in conditions of rewarding consumers' changing preferences and needs, needs and calls for of the consumers. This might ultimately result in increased loyalty for the brand and the price associated with transitioning brand is avoided.

Brand extension is also useful in conditions of creating consumer trials. Comparatively to starting new brands, cost associated with consumer trial in extended brand is less. This is more beneficial if companies in Pakistan concentrate on improving their distribution network as well.

Brand extension is also useful when recognition, recognition and refreshment enter into consideration. It can improve acknowledgement of father or mother brand as well as consciousness cost can also decrease. Moreover, in Pakistani market, it was observed than relatively to mother or father brands, extended brands avails more awareness and recall.

Utility of any brand can be improved as a result of brand expansion.

Companies may become better by using brand expansion which can give companies more bargaining electric power with their vendors. Brand expansion can improve company's position for bargaining using its retailers.

To some extent brand extension is recognized as a revitalizing procedure for any brand. It really is considered as a technique of re launching and refreshing a brandname in your brain of the prospective consumers. In addition, it assists with re positioning a brand in the eye of consumers.

Using brand extension strategy as part of branding strategy, companies can also gain a competitive benefit over its rivals. It can be achieved by focusing on a market area of interest.

Brand extension can be beneficial in conditions of shifting parent brand technological know-how to extended brand in conditions of development, and research and development (R&D).

Advantages & Disadvantages of Brand Extension

Consumer understanding of parent brand reputation and image always offers an advantage to companies. To converse about expanded brand advantages to the consumers, it will always be beneficial for the firms if consumers know about parent brand quality and image. Usage of parent brand to increase the brands performs a job of attention getting process for expanded brands. Consumer knowledge about father or mother brand image and quality make companies to communicate precisely the great things about extended brands.

Trustworthiness of consumers about a brand pays to for the firms to brand extension strategy. Standing of consumers tempts those to try services originating from a brandname which consumers already trust on. Consumers curently have an implicit accord with already proven brands, thus consumers feel free to try extended brand even in other market sections too.

Revitalization and refreshment of parent brand can definitely be achieved through brand extension strategies. Even in Pakistan brand extension is considered a source of refreshment and repositioning of father or mother brand. Additionally it is beneficial to reposition the image of father or mother brand in your brain of the consumers.

Though, In Pakistan brand extension strategy is at its initial phases, but brand managers always concentrate to get over the disadvantages associated with brand extension such as dilution of parent brand. You will discover handful of brands which received diluted as a brand extension strategy but most of the prolonged brand received success in the sight of the consumers. The number of diluted brand are much and few.

Brand extension induced cannibalization of sales in Pakistani market. Companies in Pakistan like Nestle and Haleeb performed face cannibalization of sales as part of brand expansion strategy.

Success of Brand Extension

Fit between extended brand and the father or mother brand in conditions of similarity and consistency of quality and image is foremost very important to the success of brand extension. Expanded brands can achieve success in the mind of the consumers, if consumers find the same quality and performance, which they found in the parent brand. Conversely extended brands can be a disaster for the company.

Favorable understanding by the consumers for the extended brand can lead to the success of the extended brand and the parent brand, while unfavorable understanding may cause tarnishing the parent brand image.

Moderating changing such as quality of the father or mother brand, consumer understanding of the parent brand play a life-sustaining role for expanded brands. In Pakistan, companies delineate quality as getting together with the international specifications of quality.

Sound brand equity may lead to brand loyalty, lower cost and better image. It also helps in increasing the positioning of the father or mother brand in your brain of the consumers.


Rationale For Brand Extension

As per our research, handful of factor are a driving pressure behind successful brand extension. One of the most striking makes for successful brand expansion is progress for the firms. Using brand extension, growth can be achieved either by preserving current market show or by entering into new market segments that are not yet explored by the competitors. This can be achieved through leveraging or improvising favorable central brand into prolonged brands. Those companies that happen to be functioning in multiple categories or market sectors try to prolong their brands not because of increasing progress but as a case of development of brand expansion. Such actions might ruin the central brands and essence of brand expansion.

To be successful in brand extension, steadfastness is a prerequisite. Reaching customers need, wants, and demand is one of the other important reason behind brand expansion. Customer retention is obviously gained if companies are gratifying customers need, desires and demands. For this purpose companies are using brand extension as part of their branding strategy. Using this strategy companies can make their customer more loyal to the brands. This research also demonstrates brand extension is also used to expose new brands for the purpose of rewarding changing customers' preferences, their needs, needs, and demands. In so doing companies similarly try to capture the all possible market segments which eventually bring about higher revenue and market share.

One of the other motivational factors for brand extension is to gain economical advantages. Mostly companies use brand extension because they want to gain higher net earnings and want to save cost associated with creating recognition and communication with the customers. A component from saving cost related to promotional activities, companies also gain economical advantage through wedding caterers different other sections of consumer by extending their brand into different market segments. As in case of Haleeb foods limited, chosen for our research, brand expansion is done to employ unused capacity because of the seasonal dynamics of its business. Apart from utilizing unused capacity, other reasons include, effective promotional activities, (ROI) profits on return, and higher online profits.

Our research also reveals that brand extension strategy is also useful to take benefit of consumer tests in an inexpensive manner. Cost associated with consumer tests in case of expanded brands is relatively lower than releasing entirely a new brand and creating tests for these brands. It was also discovered that lower cost for campaign and communication is incurred in case there is extended brands comparatively to a newer brand. New brand extension can target clients sections without incurring higher promotional and ad cost.

Our research also discovered that gaining edge from economies of level is also regarded as a promising factor of brand extension. Economies of range related to creation, research and development and communication is a motivational factor for brand expansion. Gaining advantage of economies of level from brand expansion may ultimately lead to raised net gains. Efficiency of company in providing goods is also matter. It had been also discovered that in food (perishable) digesting companies' economies of level may be reliant on supplier's capability to serve demand.

We also found during the course of this research that brand extension can be beneficial so far as recall and reputation of father or mother brand is concerned. In such case, comparatively weaker brands can gain serious benefits in terms of recall and recognition, thus their discount vitality with the retailers can even be enhanced. Additionally, to grapple the differing business environment, brand extension plays an important role in conditions of revitalizing, re-launching the parent brand. Through this technique of revitalization and re-launching of parent brand, mother or father brand becomes more fascinating.

Our research figured increased competition with the opponents along with the other factors also lead to the brand extension strategy as a part of branding. To compete with rivals, companies have to kick off prolonged product, which can serve the needs of the consumer either in the current market portion or in different other market sections, where competitors are doing well. To stay a mind of competition, it has now become essential to establish new brands under the mother or father brand name. Another perquisite essential aspect which motivates companies to make use of brand expansion is to get advantage of the technological experience in parent brand. Using scientific expertise gained in mother or father brand, companies try to enter into new market section by using the same technology that they used in mother or father brand. Technological might include superior presentation technology or outclass promotional activities, which companies utilization in their extended brands as well.

Advantages and drawbacks of brand extension

This research concluded that advantages and disadvantages of prolonged brands are also recognized by managers. According to brand professionals, consumer know-how about the parent or guardian brand is vital in the success of expanded brands, but it is also important to mention the key characteristics of the extended brands, so that consumer could have an idea about how precisely extended brand differs in terms of specs than the parent brand but not in terms of quality. Brand expansion is usually considered more beneficial by brand professionals because of the fact the comparatively to releasing new brands, lengthened brands use pull strategy rather than using press strategy. In Pakistan, brand professionals use the parent or guardian brand to portray an attractive brand for the extended brands which might help consumers to realize the father or mother brand doctrine and finally accept the prolonged brands.

Consumer trust can be beneficial for brand extension. During the course of this review, it was discovered that consumer trust on father or mother brand may lead to the popularity of the prolonged brands easily and in an inexpensive manner. Companies have to incur less cost for promotional activities and also to create recognition about the extended brands. Due to consumer trust, companies can permeate into new market segments easily and quickly because of the popularity of the parent or guardian brand among the consumers. Consumer trust can be beneficial as it pertains to retailers. Vendors accept the prolonged brands easily due to the popularity of the extended product among customers.

Consumer trial becomes easy as well due to the image of the parent brand, which results in quick penetration of the prolonged brand in the market and on the list of consumers. Nonetheless it can be opposing if the parent brand is very little familiar among consumers. It'll become difficult to increase the brand under a brand which is not accepted by the customers. It could lead to inability of this brand.

In Pakistan one of advantages which we came up to know is refreshment and revitalization of brands. Brand expansion can be useful as it pertains to repositioning of the brands. Every brand has a life cycle as eventually brands become older. At such time brand extension is a useful technique to reposition the parent or guardian brand, thus giving it a new life.

Apart from features of brand extension, there are lovers of drawbacks associated with brand extension. Among these down sides includes dilution of parent brand. From our research we emerged to learn that in Pakistan, according to professionals, they didn't face brand dilution as a result of brand expansion. They concur that brand extension if done in a wrong manner can actually tarnish or dilute parent brand name, however in Pakistani context, it isn't the situation.

Another downside of brand expansion is cannibalization of sales, which as per manager, companies confronted in couple of extended brands. In case there is Haleeb food, company encountered cannibalization of sales in UHT milk and tea whitener. Changing craze led company to expose tea whitener, which eventually cannibalized sales of UHT dairy. Same case is with Nestle.

Success of brand extension

We within our research that, a successful brand extension should match the requirement of Easily fit into terms of reliability and similarity with the parent or guardian brand. Similarity and regularity does not imply a similar, but expanded brand should maintain the quality and image of the parent or guardian brand. If extended brand wouldn't normally follow the same notion which consumers have in their brain about mother or father brand, then there's a possibility that extended brand may not have the same response which mother or father brand acquired from its consumers. Because of this long brand might be a inability. We also discovered that failure of extended brands therefore of not keeping the concept of fit does not necessarily harm the parent brand. Brand managers of most four brands that have been chosen for this study, always make sure you follow the concept of fit between expanded brand and parent brand. They always try their extreme to maintain the same image and quality in expanded brands, which they promised with their customer in mother or father brand.

We also found that idea of fit between parent brand and lengthened brands make consumers to judge expanded brand as beneficial or unfavorable. Their decision about long brands for favorability or un-favorability chooses the continuing future of the expanded brands. If consumers do not find a fit between parent or guardian brand and extended brand then extension might become unfavorable, in case consumers find fit between parent brand and extended brand, then expansion might become beneficial.


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