Brand Extensions: The Good, The Bad & The Ugly
Nothing is as important for any company as the brand name. What if the name of Head & Shoulders is replaced by the word Dandruff Protector? Its sales will defiantly get down. Furthermore if new silky soft shampoo is introduced under the brand name f head & Shoulders can ruin the whole image the brand may be forever. Thus it has been stated by many of the studies that brand extension has been the central strategic growth for the firms during 80’s. Companies grow by introducing and adding new products under their brand name to strengthen it into the market and to make the new product successful due to already established worth the ...view middle of the document...
The product class must be given high recognition under the brand name because it is one of the best ways to attain sustainable competitive advantage in the market.
Trial purchase is encourages:
The brand name associated with a new product minimizes the risk for a potential buyer in making purchase decisions. The best example is IBM which new products enjoy the credibility of the strong brand name. Whereas “Advanced computer” brand may possess little chances to generate high profits because of low credibility of the brand.
The bad happens when the brand fails to support the new product. Following are some of the reasons:
1. Negative association: The best example is Levi. The new line of Levi Tailored Classics did not fit well with the bran and thus suffered heavy losses.
2. Confusing name: The Hamburger Helper introduced the new product with word cook book in the name. Consumers got confused that whether it was an eatable or a cook book. After the product name was changed the sales got raised.
3. Poor Fit: it happens when the new product does not fit with the brand.
4. Transferability: the brand must have the assets and skills required to make the extension. Green Giant...