Naslov
Brand Extension Strategy

Autori
Vranešević, Tihomir ; Mandić, Miroslav ; Pandža, Irena

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
International Journal of Management Cases - Special Issue, Vol.9, Issue 3/4 / - , 2007, 283-297

Skup
CIRCLE, 4th International Conference For Consumer Behavior and Retailing Research

Mjesto i datum
Siderno, Italija, 12.04.2007

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
brand extension; extension forms

Sažetak
Development of a new brand calls for big investments and managing effort, but with uncertain success, so it is understandable that the most of the new products are actually launched as an extension of existing brand. The basic expectations, which company aims to achieve by brand extension, are business growth and further building of brand image. One way of capitalizing successful brands is using them as presumptions for success in launching a new products and new (sub) brands in the market. Companies often do the extensions because they want to decrease investment in new brands. The question is how successful or unsuccessful will be the new brands if company invests the same amount of money in them as it has invested in «parent» brand. When company plans to launch new product on the market and take the advantages of already existing and often successful brand, it has the following strategic possibilities: brand extension strategy – launching a new product under the existing brand ; and brand confirmation strategy – launching a new product under new brand but with support and connection with existing brand. Launching new brand is always followed by risk, which is the main reason why the most of new brands do not realize the expectations of companies, but the biggest problem is that companies often can not easily define the real reasons of failure. Extension of existing brands often seems to be opportune instead building a entirely new brand. Brand extension can be described as process in which the core, essential part, associations and values of basic brand, are transmitted to their extension. Besides the advantages there are certain risks of extension. The main risk is cannibalism inside business portfolio – company does not increase total revenue despite of higher investments, then it comes negative recoil effect to “parental” brand and watery, erosion of brand i.e. losing the unique significance of basic brand. For avoiding these risks it is needed to control costs (investments) of brand extension and return of investment, allocate the resources on products with higher return (except if products have the supporting and/or “fighting” tasks in business portfolio) and educate the sell staff about the importance, role and specialty of each product in brand extended assortment. Companies which want to make success by “parental” brand extension have to consider that narrow assortment down (withdraw the product) is not just acceptable, even more recommended, depending on market results. This article present different possibilities of brand extension and confirmation as well as of advantages and disadvantages of different approaches.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

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