THIS IS FOR AN MBA MARKETING CLASS. PLEASE PROVIDE AN ANSWER WITH ONE APA REFERENCE LISTED IN THE RESPONSE AND AT THE END.
You want to introduce a new product. You already have a successful brand in a different product category than the new product you plan to introduce. You are contemplating using the same brand name (brand extension) for the new product. What factors should you consider before making this decision?
BELOW IS AN EXAMPLE OF ANOTHER STUDENTS RESPONSE TO HELP ANSWER THE ABOVE QUESTION:
The website brandvision.com offers three factors for brand extensions. The first factor to consider is competitive leverage which is the new product being comparable or superior to other competing products in the category. Will the new product bring anything to the new category or not. Another factor is benefit transfer which is that consumers what the same amount of benefit from the new product as they get from the old product. The third factor is perceptual fit which is consumers must perceive the new product to be as good as the old product.
An additional factor you would want to consider is, is the current product any good or a market leader? If the current product doesn’t have a good reputation in its current category, why would consumers try a new product with the same name?
Las but not least, I think you would want to consider is how similar or different the new product category is to your current category. You would want to figure out if the products would complement each other and if you want to associate the first brand with the second product. For example, if you are AllStar from our simulation and you already have Allround, would you want to use the Allround name for a soft drink, probably not. However, if you have Allround, maybe you start using the Allround name fore different kind of medicines and remedies such as an antacid or pain reliever. Consumers would know that the Allround brand is already good in the pharmaceuticals field and may give the new product a try if in the same ballpark. However, if the company goes in a whole new direction and wants to put out a soft drink, consumers may be filled with questions and assumptions. They may feel they don’t want to drink something that has the same name as a cold pill and may have preconceived notions as to how it tastes.
Kotler, P., & Keller, K. L. (2012). Marketing management (14th ed.). Upper Saddle River, NJ: Pearson Prentice Hall
Factors to be considered for Brand Extension. (n.d.). Retrieved 12 03, 2012, from brandvision.com: http://brandvision2009.wordpress.com/2009/07/22/factors-to-be-considered-for-brand-extension/
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