Brand extension strategy is advantageous because it reduce the cost of new product introduction and enhanced the probability of new product. What is a Brand Extension? Advantages and disadvantages of brand extension strategy II.2.1. 1990). It was established in the year 578, and they specialize in the construction of Buddhist temples. Besides these, there are other advantages and disadvantages of brand extension – Advantages Of Brand Extension. Downloadable! Advantages and disadvantages of branding. Advantages and disadvantages of branding. A successful brand helps a company enter … Customers associate original/core brand to new product, hence they also have quality associations. Consumers’ perceived risk can go down with brand extensions. A brand extension is a strategy used to leverage and increase a brand’s equity. To the Extended Brand. A brand extension is where a pre-existing brand creates a new product or creates a sub-brand to sell a new product. Technological benefits. Advantages And Disadvantages Of Brand Extension Strategy disadvantages of brand extension strategy by online. What are the advantages and disadvantages of co branding? Competitive Pricing: The Advantages & Disadvantages. Increases the operating market of the brand: With the introduction of a new product of a different category under the same brand, the brand’s operating market increases. 2. Advantages And Disadvantages Of Brand Extension Strategy Author: abri.engenderhealth.org-2022-03-11T00:00:00+00:01 Subject: Advantages And Disadvantages Of Brand Extension Strategy Keywords: advantages, and, disadvantages, of, brand, extension, strategy Created Date: 3/11/2022 1:43:31 PM To start, we would like first to thank our two responders, M. Marcel Bottom … Advantages of brand extension are as follows: 1 For an organization it becomes easier to introduce new products in different categories when parent brand is well established. Advantages of Online Marketing Helps You to Find Potential Customers-Searching customers through social media platforms is easier and productive. The definition for brand by Professor Peter Doyle “A name, symbol, design, or some combination which identifies the product of a particular organization as having a substantial, differentiated advantage” (O’Malley, 1991, p.107). Brand extension may discourage innovation. Often times this occurs when a brand achieves success. Advantages And Disadvantages Of Brand Extension Strategy Advantages and Disadvantages of Using Social Networks in Business-Caroline Mutuku 2018-02-08 Essay from the year 2017 in the subject Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media, grade: 1.8, , language: Foreword This work about brand extension strategy was really interesting and we learn a lot thanks to it. Reduce Financial Risk. Over 3,000 of them are located in Japan, with over 800 operating in Germany. With it, the consumer has the assurance of quality when he buys the products having a particular name. 3. Leslie de Chaternatony and Despite their potential advantages, brand extensions have some disadvantages. The company may extend into too many other product areas which may dilute their appeal. There is a lot of firm like Apple, which has succeeded with the extension of Apple iPod digital music player. Some of the advantages of brand extension are as follows: • new product acceptance in a market is easier by brand extension as it reduces the risk which customers thought off regarding new brand • it helps in increasing the brand image • New product extension enhance the consumer interest and its willingness to try new product of a similar brand name. First, it may confuse and perhaps even frustrate consumers. The disadvantages of brand extension: 1. What are the advantages of Brand Extension? Where To The advantages and disadvantages of co-branding. With the product brand already established in the market and the minds of the consumers, the firm can save its marketing and promotional expenditure on the Product Line Extension of the same category. Access Free Advantages And Disadvantages Of Brand Extension Strategy theory. 1. Disadvantages of Brand Extension. Branding strategies refer to the pattern of actions to be taken by the firm to brand its products. ADVERTISEMENTS: Brand Extension: Advantages and Disadvantages of Brand Extension! Brand Extension Definition, Advantages and Disadvantages. While line extension is the less risky one, more companies are using the strategy of brand extension as offering more opportunities for the business. Helps in Facing Competition. As with everything business-related, even co-branding has certain pros and cons. Supports Business During Crises. Creates Wide Awareness. Brand stretch: a launch of a new product into a completely different and unrelated category. Individual brand. Brand extension may get loss of reliability, if it is extended too far. Access Free Advantages And Disadvantages Of Brand Extension Strategy theory. Acquires Customers Easily. The Advantages and Disadvantages of Using Each Brand Architecture. By analyzing all the features, specifications, functions, advantages and disadvantages of the best what is the brand of clip in hair extensions? Disadvantages Higher the risk to dilute the Parent Brand image Poor choices for brand extension may dilute and deteriorate the core brand and damage the brand equity The failures of brand extension are at higher rate than the successes Negative association and wrong communication strategy do harm to the parent brand even brand family. If the brand extension has no advantage over … Besides all the advantages described above, brand extension strategies also have several disadvantages. Aaker (1990) examines the advantages and disadvantages of the brand extension strategy, identifying reduction in product-introduction risk as the main advantage and potential Increases the Possibility of Expanding Distribution. 2 Another advantage of brand extension is people's awareness like people ar… View the full answer It allows subsequent extension. Brand extension has the following advantages: Easy acceptance of the customers for new products; The customers will already be aware of the existing products that are linked to the particular brand. 18. Decreases Risks Perceived by Customers. The main advantages of brand extension strategy can be described as follows: 1. Advantages of brand extension strategy According to David Taylor (2004, p1), this strategy of brand extension is popular because it is less risky and cheaper compared to the creation of a new brand. 2. Now you know a lot about the advantages and disadvantages of umbrella branding, the differences between this strategy and individual branding, and some examples. Additionally, the expansion of a brand into foreign markets is advantageous for a franchiser since it allows the brand to bolster brand equity, positive brand recognition, and brand loyalty if the franchiser is contracted with competent and profession franchisees. The same applies to Apple. Improves Productivity of Employees. Aaker treats category-related extensions as line extensions and others as brand extension. 3. Hence the risk perceived by the customers regarding the brand will reduce. Pros of brand extension: Upon success of the initial brand, other areas the brand could explore would have to be strategically … Launching a product sometimes more risky, therefore the company extends the brand category and reduces the financial risk. Advantages of Brands Extensions. Brand equity is the intangible value added to a product by the effective use of promotion and other marketing tools. A successful brand helps a company enter new product categories more easily. Advantages and disadvantages of brand extension strategy II.2.1. Brand extension is when a brand in one category extends itself into another category. Brand extension is a popular Branding strategy to enter in the new product category. They can generate a royalty income. Kongo Gumi is usually recognized as the oldest continually operating organization in the world. Brand Extension - Meaning, Advantages and Disadvantages Brand Extension - Meaning, Advantages and Disadvantages Brand Extension is the use of an established brand name in new product categories. April 26, 2018. Although brand extension is important in practice, few studies have investigated how the brand extension strategy is actually used and how it affects brand performance. It can increase the brand image. Advantages of Brand Extension. Packaging or Labelling Advantages. Advantages of Brand Extension: Launching a new brand may prove to be costly. Your blog was very useful! Get Free Advantages And Disadvantages Of Brand Extension Strategy strategy for your business Ways to Promote your Business - Online and offline advertising platforms, such as social media, print ads, word of mouth, and outdoor advertising, all have their advantages and disadvantages. Advantages of Branding in Marketing Management. 2. Following are some important Advantages and Disadvantages of various branding strategies: Family brand vs. Its advantages over traditional marketing is enormous. Despite their potential advantages, brand extensions have some disadvantages. Local brand vs. This eases the lunch of a new product and also reduces the cost in some scenarios. So in order to play safe the marketers go for brand extension to same or different category. Introducing any brand to a new marketplace entails risk. Bigger sales incomes. Advantages and disadvantages of brand extension. pastanaga June 25, 2011 . The definition for brand by Professor Peter Doyle “A name, symbol, design, or some combination which identifies the product of a particular organization as having a substantial, differentiated advantage” (O’Malley, 1991, p.107). Brand extension in unrelated markets may lead to loss of reliability if a brand name is extended too … Its advantages over traditional marketing is enormous. The following article is intended to present the strategy of brand extension with its advantages and disadvantages. Brand Extension Explained . In some cases brand extension can be really crazy. Apple iPods Avoid costs of developing a new brand Allow for packaging & labeling efficiencies. According to Chang, from the Journal of American Academy of Business, Cambridge, there are three levels of co-branding: market share, brand extension, and global branding. Opportunities and challenges faced by companies with brand extension. It is an important decision which will have most of the time an impact on the companies' sales and fame. Advantage: Increase Volume, Length. Improves Brand Image. The problem of cannibalization may arise. If you want to add a little bit of length or volume in your hair, often you have to endure waiting. Advantages and disadvantages of brand extension. The advantages and disadvantages of individual branding apply to all businesses. Disadvantages of branding in Marketing Management. If a famous brand extends, the acceptance for new products is easier, this is because of the quality the brand has brought to the consumers with their previous products. The advantages and disadvantages of co-branding. Carefully structured to link directly to the CIM syllabus, this Coursebook is user-friendly, interactive and relevant. Advantages and disadvantages of brand extension strategy II.2.1. The 07/08 editions contains new case studies which help keep the student up to date with changes in Marketing Planning strategies. The product line of these world-known companies includes the following brands: Head & Shoulders, Pantene, Lenor, Ariel, Gillette, Tide, Herbal Essences, and Tampax. As an efficient strategy, brand extension has become a usual occurrence over the last fifteen years. Knowing their interests, needs and preferences will lead to … Brand names make shopping easier. Please note that the product line extension is just one of the main classifications of a new product. A feedback to the parent brand will be another possible advantage. Brand extension in unrelated markets may lead to loss of reliability if a brand name is extended too far. SIBM, Pune E-mail: tarunkushwaha@sibm.edu. Advantages and disadvantages of brand extension Advantages: They can help the product be easily accepted. Increase Profitability of Business. Brand Extension Advantages And Disadvantages Brand extension can prove to be the best or the worst strategy undertaken by the company. It can either increase the brand equity because of right judgement or can result in brand dilution just because the spin-off wasn’t able to prove its relationship with the existing product. I've been researching the internet to find advantages and disadvantages. 1. Brand extension in unrelated markets may lead to loss of reliability if a brand name is extended too far. An organization must research the product categories in which the established brand name will work. There is a risk that the new product may generate implications that damage the image of the core/original brand. The customers would trust the product more. Cost of New Launches: A new brand costs anywhere between 50 to 100 million dollars to develop, hence the huge investments required to develop and launch a new brand act as a major deterrent. After considering the advantages and disadvantages, the bottom line comes to this – you need to determine if a balloon loan is right for your needs. Brand extension refers to the use of a successful brand name to launch a new or modified product in the same broad market. Since we use well-liked brands in this study and since better fit usually improves product The 007 fragrance is a good example of this. A company can reduce financial risk through its brand extension. Therefore, organizations have to research and understand which product categories will be suitable and where they can utilize the brand name. This new category to which the brand is extended can be related or unrelated to the existing product categories. I'm thinking specifically of the Hello Kitty brand but there are other similar ones. Brand Extension – Advantages, Disa dvantages and Future Advantages: The key merits that brand extension brings to the marketer’s brand are as follows: 1. Launching new products is one of the most used strategies for companies to grow. pure profit" (Kumar). f. Customers associate the original/core brand to new products; hence, they also have quality associations. Kahn, and McAlister 1992; Kahn and Isen 1993). Disadvantages of brand extension. It increases market coverage as it brings new customers into brand franchise. brand name. That’s why hair extensions are great. 2 Another advantage of brand extension is people's awareness like people ar… View the full answer Advantages of Brand Extensions. Advantages Of Brand Extensions Increase the probability of gaining distribution and trial Increase efficiency of promotional expenditures Reduce costs of introductory & follow-up marketing programs (save 40-80%) E.g. Tho brand extension may dilute the value of the core brand. If the brand has an image of offering one product only, then the company cannot attract a wider range of … Brand extension: Aims, advantages and disadvantages and types. The … A business “markets products or services with a well-developed image using the same brand name but in a different business category’’. Advantages And Disadvantages Of Brand Extension Strategy If you ally obsession such a referred advantages and disadvantages of brand extension strategy books that will have enough money you worth, get the agreed best seller from us currently from several preferred authors. Thus, there are different disadvantages that can be taken. It makes the brand visible to a broader audience, which eventually increases its brand equity. Different varieties of line extensions may confuse and per ­haps even frustrate consumers as to which version of the product is the “right one” for them. Access Free Advantages And Disadvantages Of Brand Extension Strategy Advantages And Disadvantages Of Brand Extension Strategy Getting the books advantages and disadvantages of brand extension strategy now is not type of inspiring means. Branding is the marketing term that is often used when one is talking about companies introducing and establishing themselves in the minds of the consumers. You might not require more mature to spend to go to the ebook initiation as well as search for them. Carefully structured to link directly to the CIM syllabus, this Coursebook is user-friendly, interactive and relevant. Starbucks, which is synonymous with coffee, expanded its brand to include ice cream sold in grocery stores. Large corporations tend to experience the most advantages as multiple brands work together to generate multiple revenue streams. Can Confuse or Frustrate Consumers. 2. Soda Should Be Banned Essay. This stratagy focuses on targeting the right consumers, awareness of the competition, the need for marketplace credibility for the offering and clearly defined benefits to the consumer. Types of Brand Extension. Family Brand vs. While line extension is the less risky one, more companies are using the strategy of brand extension as offering more opportunities for the business. As you do this, take note of the following advantages and disadvantages in digital marketing. An organization must research the product categories in which the established brand name will work. Dilution of the existing brand image is that the extensions are using the most important asset of the company that is its brand name. The concept of brand extension 2. Along with product improvements, product line extensions form the majority of new product launches for established firms. Advantages of brand extension strategy According to David Taylor (2004, p1), this strategy of brand extension is popular because it is less risky and cheaper compared to the creation of a new brand. available on the market, we added the cream of the creams to our list of main products. Global brand. Learn more on Advantages and Disadvantages of Brand Extension One such company is Fitbit. The 07/08 editions contains new case studies which help keep the student up to date with changes in Marketing Planning strategies. A business “markets products or services with a well-developed image using the same brand name but in a different business category’’. Brand extension refers to the use of a successful brand name to launch a new or modified product in the same broad market. 2. The only thing you can do is speculate, but what we know for a fact from proven cases are some advantages and disadvantages from brand extension. Brand meaning is clarified. Advantages of Digital Marketing. Complementary products Advantages of digital brand extensions Brand extension is one of the most vital strategies that a company can use in order to maintain the company’s image and worth in the market. Advantages of Digital Marketing. First, it may confuse and perhaps even frustrate consumers. They can also improve the overall brand image. That’s the worst. Avoiding the pitfalls of luxury brand extension: Science Direct. One easily overlooked disadvantage to brand extensions is that by introducing a new product as a brand extension, the firm forgoes the chance to create a new brand with its own unique image and equity. Question: Write an essay explaining the following: 1. In the previous article, we discussed various brand architecture types. Individual Brand: When a company sells more than […] Successful brands then venture into other areas their brand could potentially fit. The Brandt line. On dimensions like image, distribution and physical design, it can provide strong competitive advantages in product Page 15/26. 1. Concepts of Brand - The essential starting point for any The Advantages of Brand Extension. It is not a new concept and is as old as marketing strategy itself. It may lead to companies producing too many “lookalike” products. The extensions are using the most important asset of the company, i.e. its brand name. It can be a major advantage for the extension but it represents as well a huge risk for the existing brand because the brand image can be diluted. Increases Efficiency of Promotional Investments. With the product brand already established in the market and the minds of the consumers, the firm can save its marketing and promotional expenditure on the Product Line Extension of the same category. The firm earns a competitive advantage in the market against its contemporary brands as is able to serve the consumers with a wide array of options. As you do this, take note of the following advantages and disadvantages in digital marketing. Disadvantages: Brand extension in unrelated markets may lead to loss of reliability if a brand name is extended too far. Introduction The success of a product depends upon its positioning which in turn is related to its . The firm earns a competitive advantage in the market against its contemporary brands as is able to serve the consumers with a wide array of options. The following article is intended to present the strategy of brand extension with its advantages and disadvantages. advantages-and-disadvantages-of-brand-extension-strategy 1/5 Downloaded from gcc.msu.ac.zw on March 19, 2022 by guest [Books] Advantages And Disadvantages Of Brand Extension Strategy When people should go to the book stores, search creation by shop, shelf by shelf, it is really problematic. Complementary products Branding – Advantages and Disadvantages: To Buyers and Manufacturer Advantages to Buyers: 1. Advantages of brand extension are as follows: 1 For an organization it becomes easier to introduce new products in different categories when parent brand is well established. The first disadvantage of brand extension strategies is that it can have a potential negative effect on the original brand name and/or parent brand (Loken and Roedder John, 1993), weakening what the brand name means and stands for. First, it may confuse and perhaps even frustrate consumers. Marketing. Main advantage of brand extension is that a renowned/successful brand often helps firms to introduce new product categories easier. Dr. Tarun Kushwaha Associate Professor. Brand extension consists of the use of a renowned brand name when launching new products [], and it is a strategy usually adopted in order to reach a number of purposes.In particular, the extant literature on brand extension identified the following possible aims, resulting in several … Staying ahead of the game in regards to developing new business trends means staying ahead of the competition. Disadvantages of Brand Extension; Brand extension is a strategy that extends the meaning of a brand to include a new type of product or service. To the Parent Brand. Marketing. Brand Extension: A Strategy for Competitive Advantage. First, learning organization can … Given the range of advantages and disadvantages across brand extensions and new brands, it is difficult to say when one will outperform the other. Disadvantages of Brand Extension. Disadvantages of Brand Extension: 1. Launching new products is one of the most used strategies for companies to grow. My company is looking to use Brand Extension on one of our products. Brand extension helps the company to introduce new products because of the image and goodwill of the existing brand. Advantages And Disadvantages Of Brand Extension Strategy Author: communityvoices.post-gazette.com-2022-03-25T00:00:00+00:01 Subject: Advantages And Disadvantages Of Brand Extension Strategy Keywords: advantages, and, disadvantages, of, brand, extension, strategy Created Date: 3/25/2022 6:14:01 AM Small businesses may not have the capital available to start multiple brands. Advantages and Disadvantages of Brand Extension Strategy y Co-branding - combining two brands in one product- it is a very popular strategy for limited editions or short-therm partnerships (chocolate Milka with Oreo), but can also be long term (especially when two brands or companies merge) - Sony-Ericsson. Now, the brands became popular in the market. But the brand extension is more about leveraging the brand equity of an already established product or brand name. This new category to which the brand is extended can be related or unrelated to the existing product categories. 5. Expanding the brand name too distant may lose trustworthiness, primarily if the brand extension is implemented in an unrelated market. Brand extensions can enhance the parent brand, but on the other hand it may question the integrity and competence of the brand. are a few brands that are charging a high price for the product since they have spent a lot to promote and boost the brand reputation in the market. 2. The advantages: Brands can share the risk. In order to have a better understanding of this term one should look at some of the advantages and disadvantages of branding – Advantages of Branding Awareness about the Company While emotional branding could connect customers to brand values through a sensitive and humanistic level of senses, it is crucial to consider carefully both advantages and disadvantages of this new concept in order to have an effective implementation plan of developing personalized relationship and changing consumer behavior in the buying decision … 3. 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