Marketing QA : Product line extension and Brand Extension

Marketing Practice reader Onam Jindal asks this important question about the difference between product line extension and brand extension. For most of the marketing students, these terms are confusing. The different definitions in the text books makes it more confusing. nterestingl! the definitions of P"# and $# are different in two editions % && ' &( ) of *otler+s Marketing Management text book. In the eleventh edition of *otler+s Marketing Management,

Product line is defined as a group of products with in a product class that are closel! related because the! perform similar function, are sold to the same customer groups, are marketed through the same channels, or fall within gi,en price ranges. "ine extensions consist of introducing additional items in the same product categor! under the same brand name , such as new fla,ors, forms, color, added ingredients, package si-es etc. For example "ux soap comes in different ,ariants like "ux .r!stal /hine, "ux nternational etc. /o when "ux comes with a new ,ariant, it is a line extension. $rand extension happens when a compan! uses its existing brand name to launch products in other categories. For example, 0oodlands which is a shoe brand extends itself to read!mades and accessories. This definition has certain ambiguities because the term categor! can be interpreted in different wa!s. For example , when "ux brand is extended to /hampoos , is it a product line extension or brand extension 1 The answer is 2 if we take personal care as a categor!, then the extension is a product line extension since soap and shampoos belong to the same categor!. $ut if we take soap and shampoos as different categories, then the extension is a brand extension. n the twelfth edition , this ambiguit! is put to rest. The latest edition of *otler ' *eller +s marketing management text book defines $rand extension as follows 2 When a firm uses an established brand to introduce a new roduct! it is called brand extension" $rand extensions can be classified into two 2 "ine extensions and categor! extensions. "ine extensions happen when the brand launches the new product in the same categor! targeting a new segment through new fla,ors, added ingredients, package si-es etc. .ategor! extensions happen when the parent brand is used to enter a different product categor!. /o according the new definition, $rand #xtension becomes the umbrella concept which can be used whene,er a brand uses its name to an! new product. The gurus has introduced a new term categor! extension to replace $rand #xtension in the earlier definition

/o now "ux coming with a new fla,or is broadl! a $rand #xtension and more specificall! a line extension. 0oodlands extending to apparels is broadl! a brand extension and more specificall! a categor! extension.
A line extension means introducing new items in a particular product category. For example, introducing a toothpaste with a new formulation to add to the existing line of toothpastes. A brand extension means leveraging the strength of an established brand to introduce a new product category. For example, Tata is an established name in steel. When Tata introduced salt, it was a brand extension.

3a,e !ou e,er looked at a consumer brand and wondered where it comes from, who made it, who owns it1 3a,e !ou thought about wh! !ou like a particular product1 s it the product itself or do !ou ha,e an affinit! or lo!alt! to the brand4s parent compan!1 5o !ou e,en care1 4m talking about brand architecture. .ompanies and brands are bought and sold based on their brand equit!, which is the percei,ed or actual monetar! ,alue of the brand as an asset. 6nd brand architecture is often closel! connected to a brand4s equit!. .ompanies spend a lot of time and mone! thinking about their brand architecture to ensure the wa! people percei,e their compan!, products or ser,ices are correct. 7ot onl! b! end8 users %that4s !ou, the 9consumer4), but also stakeholders, shareholders, go,ernment, competitors, and lobb! groups. t ma! sound complicated, but it4s actuall! prett! simple. There are three main t!pes2 monolithic, endorsed, and standalone. :oogle, ;67T6/, and .ommonwealth $ank are all examples of 9monolithic4 brands. These brands are banking on their compan! name or brand. The compan! name or ,isual identit! is always included alongside the indi,idual ser,ice or product being offered. .onsumers hold strong affinities to these brands. The! trust them. t could be said that some consumers care less about the product or ser,ice being offered than the brand itself. $rand managers at these companies are paid top dollar. #ndorsed brands place equal ,alue in the parent compan! and the indi,idual product or ser,ice brand. 4m thinking 3ein- ketchup, 6pple iPod, /hell <8Power, *ellog4s .orn Flakes, 3olden .ommodore, 6ccor 7o,otel, 7estl= *it*at, /wisse Multi,ites, Polo >alph "auren. The! feed off, and rel! on each other. /!mbiosis in the brand world. 3ow do !ou spot an endorsed brand o,er a monolithic brand1 The endorsed brand ?ust seems to 9fit4 with its parent compan!. The! are one and the same. t would be weird ha,ing one without the other. 3ow would !ou feel if 6pple sold the rights to the iPod brand to /on!1 /on! iPod ?ust feels wrong. Then there is the last categor!, and the one am most interested in2 the pluralistic or standalone brand. There are bucket loads of these brands. These are brands that stand on their own two feet. The! ha,e no or limited association to the parent brand or compan!. t4s almost as if the! are embarrassed to be associated with them. f these brands were @ !ear olds, the!4d be asking their parents to drop them a couple of blocks awa! from school.

3ere are some classic pluralistic brands %and their parent companies)

Tic Tac %Ferrero /p6) $od! /hop %"4Or=al :roup) Pedigree dog food %Mars nc) <itamin0ater %The .oca .ola .ompan!) "4Or=al %partiall! owned b! 7estl= /.6.) Jenn! .raig %7estl= /.6.) /*8 %Proctor and :amble) Finish %>eckitt $enckiser :roup) /an Pelligrino %7estl= /.6.) /ubutex %buprenorphine) %>eckitt $enckiser :roup) Ton!':u! %Anile,er) Oral8$ %Proctor and :amble) *F. %BumC $rands) Moccona %/ara "ee .orp) 3uggies %*imberl!8.lark) Macleans %:laxo/mith*line) Paul4s Milk %Parmalat) $undaberg >um %5iageo)

/o what4s the deal with these pluralistic brands1 M! theor! is that their indi,idual brand name is so strong, it4s actuall! irrele,ant to the consumer which multi8national happens to own the manufacturing plant in ndonesia. 6lthough, ha,e the! got something to hide1 Bou can understand wh! >eckitt $enckiser doesn4t want mums and dads to know that the same compan! that makes their oh8so8reliable and premium Finish Powerball dishwasher powder also happens to make /ubutex and /ubuxone, both which contain buprenorphine, a drug that is prescribed for opioid %eg2 heroin) addiction. Perhaps there is a clear disconnect between the parent compan!4s own brand and the pluralistic brand. 6 good example is Jenn! .raig, a diet food and weight loss brand, and its owner, 7estl=, makers of all things unhealth! and fattening. Then there is the brand hierarch! argument. For example, "4Or=al group makes :arnier %budget), $od! /hop %en,ironmentall! friendl!), and $iotherm %premium range). f these brands were all endorsed b! the "4Or=al master brand, how would the consumer feel about

pa!ing a massi,e premium for $iotherm or "ancDme knowing its probabl! coming out of the same factor! as the "4Or=al Men #xpert E&F moisturiser or EG :arnier Fructis shampoo that !ou can get at .oles1 $ut ha,e !ou noticed that the big gu!s %Anil,er, >eckitt $enckiser, P':) ha,e started to introduce the parent compan! e,er so subtl!, into their T< ad,ertising1 The Anile,er logo appears, almost as an after8thought at the end of all Anile,er ads, like in this nauseating Omo washing powder example2 0e are encouraged to Hdisco,er rbI at the end of the 7urofen .old and Flu T<.2 6nd P':, with their enormous sponsorship deal at the (J&( "ondon Ol!mpics, ha,e become much more ,isible as a compan! and are t!ing themsel,es a lot tighter to their well8known brands. 0hat4s behind this1 More transparenc!1 *eeping shareholders happ!1 #ncouraging consumers to explore other product categories through a loose affinit! to the parent compan!1 Probabl!, all of the abo,e. t gets weirder2 "4Or=al is partiall! owned b! 7estl=. /o next time !ou are smearing that age8 def!ing moisturiser on !our face, ha,e a think about where it came from, and tr! not to think about chocolateC