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Chapter 12

Chapter 12.docx

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Ryerson University
MKT 510
Ida Berger

Chapter 12— Introducting & Naming new products & brand extensions Ansoff”s Growth Share matrix Current products New products Current Market penetration Product development markets strategy New markets Market development Diversification strategy strategy  Ex. Market penetrationoriginal tide; product developmenttide to go; market developmenttide with bleach; diversificationdry cleaning franchises  brand-product matrix: a graphical representation of all the brands & products sold by the firm o brand of firms as rows; corresponding products as columns o of brands & branded house (broad & deep) New products and Brand Extensions  when a firm introduces a new product, it has three choices for branding it o 1. It can develop a new brand, individually chosen for the new product o 2. It can apply, in some way, one of its existing brands o 3. It can use a combination of a new brand and an existing brand  Brand extensions: occurs when a firm uses an established brand name to introduce a new product  Sub brand: when a new brand is combined with an existing brand  Family brand: if a parent brand is already associated with multiple products through brand extensions  Brand extensions Falls into 2 general categories o Line extensions: using a sub brand to target a new market segment within the same product category (ex. GE energy saving bulbs or Head and shoulders for dry scalp) o Category extensions: using the parent brand in a different product category (Aunt Jemima Syrup and Hershey chocolate milk)  7 general strategies for establishing a category o Introduce the same product in a different form (Jell-o pudding pops) o Introduce products that contain the brands distinctive taste, ingredients, or component (Hagen dazs cream liqueur) o Introduce companion products for the brand (Duracell durabeam flashlights) o Introduce products relevant to the customer franchise of the brand (visa travellers check) o Introduce products that capitalize on the firms perceived expertise (canon photocopy machines) o Introduce products that reflect the brand distinctive benefits, attributes, or feature (ivory’s “mild” cleaning products o Introduce products that capitalize on the distinctive image or prestige of the brand (porshe sunglasses) Advantages of extensions  Facilitate new product acceptance o Improve brand image o Reduce risk perceived by customers o Increase the probability of gaining distribution and trial o Increase efficiency of promotional expenditures o Reduce costs of introductory and follow up marketing programs o Avoid cost of developing a new brand o Allow for packaging and labelling efficiencies o Permit consumer variety seeking  Provide feedback benefits to the parent brand and company o Clarify brand meaning o Enhance the parent brand image o Bring new customers into brand franchise and increase market coverage o Revitalize the brand o Permit subsequent extensions Disadvantages of brand extensions  Can confuse of frustrate consumers  Can encounter retailer resistance  Can fail and hurt parent brand image  Can succeed but cannibalize sales of parent brand  Can succeed but diminish identification with any one category  Can succeed but hurt the image of parent brand  Can dilute brand meaning  Can cause the company to forgo the change to develop a new brand Reasons for product failures  The market was too small  The product was a poor match for the company  The product was justified on inadequate or inaccurate marketing research, or company ignored research results  The company was too early or too late in researching the market  The product provided insufficient ROI  The product was not new or different  The product did not go hand in hand with familiarity  Credibility was not confirmed on delivery  Consumers could not recognize the product Successful
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