Wednesday, 29 April 2020




? The brand building costs tend to be very high. At the same time, developments on the
demand side are creating pressures on marketers to fine tune their offerings as per the
unique needs of target customers.
? In order to cope with demand pressures and cost constraints, the firms are taking the
extension route to growth.
? Line extensions refer to the strategy of introducing new variants of a product. It is propelled
by reasons such as customer segmentation, need for variety, pricing breadth, capacity
utilization and competitive pressures.
? The line extensions also involve some risks. These include line confusion, variety seeking
behaviour, strained intermediary relations and myopia. Firms often suffer due to falling
into the line extension trap.
? Brand extension strategy is pursued very vigorously by marketers these days. It involves
using an existing brand name to launch a product in a different category. Here, the brand
remains constant but product category tends to be variable.
? Brand extensions are justified on the basis of promotional efficiency, savings on product
launches, consumer benefits and returns. Various types of extensions could be identified
such as product form, companion product, expertise, customer franchise, and brand image
? An extension can be good when extended product succeeds and if the parent brand benefits.
A bad extension is one which fails to lift off, while an ugly extension not only fails to lift
off, it also damages the parent brand.
? Extensions involve transfer of parent brand associations to the extensions. The nature of
the parent brand is a crucial determinant of extension success. Therefore, before embarking
upon extension programme, a brand’s extendability must be judged.
? A brand’s extendability depends upon its character, whether the brand is a product brand,
formula brand, know-how brand or an interest brand. Brands which are symbolic and
philosophical are easier to extend into unrelated product categories.
? The product or know-how brands have a narrow zone of extension. The parent brand and
the extension must enjoy a good fit. In the absence of fit, the brand beliefs and attitudes are
unlikely to be successfully transferred to the extension candidate.

Brand Distinction: Many brands achieve distinction in the form of a unique attribute, benefit or
feature which gets uniquely associated with the brand.
Brand Extension: The brand extension, on the other hand, involves using an existing brand
name to launch a product in a different category.
Extensions: Extensions involve transfer of associations from the parent brand to the extension.
Formula Brand: Formula means a set procedure. A brand which comes in the formula category
simply implies that a standard procedure has been used to make the product.
Line Extension Strategy: Line extension strategy involves launching various product variants in
the same category under the same brand name.

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