Branding strategy and Brand extension analysis

1846 words (7 pages) Essay in Marketing

27/04/17 Marketing Reference this

Disclaimer: This work has been submitted by a student. This is not an example of the work produced by our Essay Writing Service. You can view samples of our professional work here.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.

A brand is a name, term, symbol or design or combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors

A brand is a link between the Company’s marketing activities and the customer’s perception

Components of a Brand

Effective Product Visible:- Symbol,

Advertising, Packaging etc

Distinctive Identity supported by

Added Values Invisible: Assets and

Competencies, Strong R&D, effective selling, costs

Benefits of Branding


Benefit of Branding


Branding makes it easier to choose between competing products, if different brands offer different benefits. Brands help consumers cope with information overload

Brands can support ‘aspirations’ and self image

Branding can confer membership of reference groups


Enables extra value to be added to the product

Creates an impression in the consumer’s mind; encourages re-purchase

Differentiates the product, especially if competing products are similar

Reduce the importance of price

Encourages a ‘pull’ strategy

Other products/services can exploit the brand image


A brand is an intangible asset; even though it is not on the financial statements, a strong brand promises to generate future cash inflows and profits. This is called brand equity

Brands build market share, which can generate high profits through

Higher Volume

Higher Value (higher prices)

Higher control over distributors

Brand Strategy

Company Brand – The company name is the most prominent feature of the branding (Mercedes)

The company brand combined with an individual brand name (Umbrella Branding) – e.g. Kellogg’s Corn Flakes, Apple Jacks etc – This option both legitimizes (the Company name) and individualizes (the individual product name). It allows new names to be introduced quickly and relatively cheaply.

Range Brand – Firms group types of product under different brands

Individual name – Each product has a unique name. E.g. Procter & Gamble – Bold, Tide etc. The main advantage is that an unsuccessful brand does not adversely affect either the firm’s other products, or the firm’s reputation generally.

Choice of Brand Strategy

Company and/or Umbrella Brand Name



Cheap (Only one Marketing effort)

Not ideal for Segmentation

Easy to launch new products under umbrella brand

Harder to obtain distinct identity

Good for Internal Marketing

Risk that failure in one area can damage the brand

Variable Quality

Range Brands offer some of the advantages of an umbrella brand with more precise targeting

Individual Brand Name



Ideal for precise segmentation


Crowds out competition by offering more choice


Damage limitation to Company’s reputation

Brand Values

Added Values – The subjective beliefs of Customers – are at the heart of building brands (Doyle)

Most consumer buying decisions, therefore, do not depend on the functionality of the product but are bought for “emotional” reasons and branding reduces the need to choose

Sources of Brand Values




Customer’s actual usage of a brand can give negative or positive associations

User Associations

Brands get an image from the type of people using them; brands might be associated with particular personalities


Belief in a brand may enhance its effectiveness


Design appeals to people’s aesthetic sensibilities

Manufacturer’s Name

The Company’s reputation may support the brand.

Brand Identity

Brand Identity is the message sent out by the brand through its product form, name, visual signs and advertising. This is different from the Brand Image which is how the Target Market perceives the brand.

Aspects of a Brand




Fundamental, unchanging aspect of a brand


The brand’s culture, personality, the identity it conveys etc


These are how the brand communicates through physical appearance of the product

Clearly, the themes are easier to change than the style, which is more easy to change than the core.

Step Approach to Designing Brands

Step 1: Have a quality product (Fit for use)

Step 2: Build the basic brand

Marketing Mix criteria should

Support product performance

Differentiate the brand

Be consistent with positioning

Deliver the core product in an attractive way

Step 3: Augmentations – include extra services, guarantees etc

Step 4: Reaching its potential – so that Customers will not accept substitutes easily

Step 5: Maintain Brand Value – By using the Marketing Mix to persuade Customers to rebuy

Step 6: Build Brand Loyalty – Customers who rebuy and are loyal because:

Revenue from them is more predictable

Existing Customers are cheaper than new ones

Step 7: Know where to stop in developing the brand.

Implementing the Brand Strategy.

Brands that reach their potential have five characteristics (Doyle)

A quality product underpinning the brand

Being first to market, giving early mover advantages

Uniquely positioning concept; in other words they are precisely positioned

Strong communication underpinning the brand

Time and consistency

Brand Planning Process



Market Analysis

An overview of trends in the macro & micro environment and so includes Customer and Competitor analysis and the identification of any PEST factors which may affect our brand

Brand Situation Analysis

Analysis of the brand’s personality and individual attributes. This represents an internal audit and a fundamental evaluation of the brand’s character

Targeting Future positions

This is the core of the brand strategy as it incorporates all the steps learnt above into a view of how the market will evolve and what strategic response is most appropriate. The strategy can be considered under three headings a. Target Markets b. Brand positions and c. brand scope

Testing new offers

Once the strategy has been decided the next step is to develop individual elements of the marketing mix and test the brand concept for clarity, credibility and competitiveness with the target market

Planning and evaluating performance

The setting of the brand budget, establishing the type of support activity needed and measurement of results against objectives. Information on tracking of performance feeds into the Market analysis of the brand management process.

Brand Extension

Brand Extension involves using the same brand name, successfully established in one market or channel, to enter other (Doyle). It is often termed Brand stretching when the markets are very different.

Examples of Brand Extension

Tesco & Dixon’s launching themselves and Internet service providers

Penguin Books launching its own brand of compact discs

Swatch becoming involved in motor vehicles

Conditions for Brand Extension

The core values of the brand must be relevant to the new market

The new market area must not affect the core values of the brand by association. Failure in one activity can adversely affect the core brand.

Advantages of Brand Extension




It is less costly to extend a brand than to establish a new one from scratch

Customer Perception

Customer expectations of the brand have been built up, so this lower risk for the customer encourages trial

Less risky

Failure rate of completely new brands

Dis-Advantages of Brand Extension




The brand personality may not carry over successfully to the next segment. The brand values may not be relevant to the new market


The brand needs to be strong already


The brand still needs a differential advantage over competitors


Excessive extensions can dilute the values of the brand

Revitalizing Brands

Revitalization means increasing the sales volume through: a. New Markets e.g. Overseas b. New Segments c. Increased Usage (eating breakfast cereal as a snack during the day)

Repositioning Brands

Repositioning is a competitive strategy aimed to change position to increase market share

Type of Position



Relates to the actual product features and design


Change the buyer’s belief about the brand


Alter beliefs about competing brands

Change Emphasis

The emphasis in the advertising can change over time

Success Criteria for Branding

Worlwide research suggests that beneficial qualities of a brand name are that they should:

Suggest benefits (Ultra Brite toothpaste, Slim Fast etc)

Suggest qualities such as action or colour e.g. Shake N Vac

Be easy to pronounce, recognize and remember

Be acceptable in all markets both linguistically and culturally

Be distinctive

Be meaningful

Global or Local Brand

The key differences between a standardized global brand approach and an approach based upon exploiting global marketing opportunities are as described below.

The standardized global brand approach requires:

A standardized product offering to market segments which have exactly similar needs across cultures

A common approach to the marketing mix and one that is as nearly standardized as may be, given language differences

An approach based upon global marketing opportunities reflects:

A recognition that the resources of the company may be adapted to fulfill marketing opportunities in different ways taking into account local needs and preferences but on a global basis

A willingness to sub-optimize the benefits of having a single global brand in order to optimize the benefits of meeting specific needs more closely

For an International company marketing products, which can be branded, there are two further policy considerations.

The problem of deciding if and how to protect the company’s brands and

Whether there should be one global brand or many different national brands for a given product.

Cite This Work

To export a reference to this article please select a referencing style below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have the essay published on the UK Essays website then please: