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Introducing & Naming New products & Brand Extension

New Product branding is when marketers introduce a product to the public

with its own unique identity. This can be with the product name, logo, design—
any aspect of the product that differentiates itself from others

Simply it’s the development of a distinctive brand for a new product with the
intention to reach a brand's target consumers.

Brand recognition with a product provides a number of benefits to a company, even if

customers don’t immediately associate your product with your corporate brand.

Let's revise the benefits of distinctive product branding

Identification

Branding a product makes it easier to identify among lookalike products. A strong

brand stands out. The more recognizable it becomes, the more ROI (Return on
Investments)

Expansion

Having a brand people already know and love can make it easier to expand into a
new market or product category, or even introduce a new brand from the same
company. It builds instant credibility for new products and encourages people to try
them.

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 Product Preference

Brand awareness carries a lot of weight when it comes to consumer preference.

People buy the brands they know and trust. When you create an intentional brand
that’s consistent and appeals to your target audience, you stand a better chance of
winning them over.

Competition

Part of a good brand strategy means paying attention to other brands in your market.
Strong brands can discourage other companies from entering your niche. It creates a
higher barrier to entry, especially if people show a strong affinity for your brand.

Good product branding also means you have to compete less on price. People
are willing to pay more for the brands they like, especially if they think that run-of-
the-mill products might also be of lesser quality.

What is brand extension?

When already well established brand uses its name to extend outwards into
other product categories, this is what is called brand extension.

Brand extensions are quite popular nowadays for multiple reasons. Let’s
take Nike here as an example. Nike’s core products are shoes, and they’ve
gathered a mighty following by selling all kinds of shoes. However, they’ve
since extended and now also offer basketballs and sunglasses, just to name
a few.

Now, Nike is a parent brand to its brand extensions. And, as you can see,
these extensions don’t have to relate to the original product, as the whole
point of them is to attract both current and potential new customers. Those
who love Nike shoes will be much more inclined to try their sunglasses or

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 basketballs as well. In essence, since Nike has a strong brand image and
name, consumers will more easily accept the extension, as it has the same
values and aspirations as the core brand Nike.

Advantages of brand extension

 Grows audience: Brand extension often allows companies to reach

new customers and demographics.
 More earnings: It can also lead to increased sales due to the
increased opportunities and potential for new markets, leading to
overall boosted profit margins and equity.
 Inexpensive marketing: Because brand extension relies in part on
existing fans, organizations can save on money usually spent on
promoting and marketing their company.
 Trust from customers: It usually takes some time for new products
to earn customers' trust, but consumers may be more open to trying a
new product from a brand with established credibility.
 Promotes the existing products: Releasing a new product may help
garner attention to your brand, which serves as marketing for your
existing products.

Disadvantages of brand extension

 Potential changes to the parent brand's image: It could change

your brand's reputation if your new product is less successful than
your original offerings, but it can help to ensure the new product
matches your vision and promises.
 Possibility of over-saturation: Participating in too many industries
could cause brand dilution as consumers’ tire of seeing your brand, so
consider competing in a market that's related to your current market.

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  Smaller marketing budgets: Some organizations may rely too much
on brand recognition to attract customers while saving money on
marketing, so diversify your marketing tactics to generate interest in
your product.

Types of brand extensions

 Line extensions

A line extension is one of the simplest brand extensions you can create. A
line extension simply offers a product in a slightly different variation to your
original product, such as size, taste, or packaging design.

A line extension alters your product to allow you to market to new

demographics, without radically changing your core product. For instance, if
you sell rugs, you might want to expand your range to include different sized
rugs and different colors.

Benefits

 Attracting new customers

 Offering existing customers more variety
 Increasing marketing efficiency

Examples of brand line extensions

1. Carlsberg

There are many examples of brands that have used product extensions as
part of their brand extension strategy. Carlsberg is one example — the
multinational brewery group offers their standard Danish pilsner in bottles,

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cans, on tap, and in many more forms. It’s the same product, just in different
variations.

In this brand extension example, Carlsberg uses the strength of their parent
brand to provide customers with more variety so you can drink beer in
whichever form you prefer. (And Carlsberg drinks up more revenue in the
process.)

 Product extensions

A product extension builds on your current product range to offer something

new to your audience. This type of brand extension relies on you creating
products that are related to your existing offering, but are distinct to what
you currently have on the market. In most cases, product extensions include
companion products that compliment your original product.

For example, a make-up brand might introduce a product extension of

brushes, blenders, or sponges. They’re different products — but they make
sense with the original product, and give existing customers a chance to buy
into the brand even more.

Benefits

 Attracting new customers

 Offering existing customers more options
 Enhancing your original product

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 Lifestyle extensions

A lifestyle extension is a really interesting type of brand extension. This

strategy relies on building a strong culture or community around your brand.
A lifestyle extension lets you use your brand community and sell your
audience new products, even if they’re not related to the original product of
the parent brand.

For lifestyle extensions, brands often leverage celebrity endorsements or

influencer marketing to help raise awareness. For instance, a car brand
might start selling furniture or clothing as part of their brand extension
strategy.

Benefits

 Growing your brand community

 Increasing brand awareness
 Boosting the earning potential of your brand

Examples of lifestyle brand extensions

1. Red Bull

One of the most recognizable lifestyle brand extension examples is Red Bull.
Red Bull has created an entire world built around their caffeine-based
energy drinks, encompassing extreme sports, events, clothing, accessories,
and more.

Red Bull is now synonymous with peak physical performance, risk-taking,

and competition. Thanks to strategic lifestyle extensions, they’ve become so

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much more than just a drinks brand and have built a global reputation
based on energy and excellence.

 Customer franchise extensions

Another brand extension strategy you can use to expand your brand is a
customer franchise extension. A customer franchise extension involves
moving into different product categories that are all within one market
segment. An example of a customer franchise extension is a sourdough
bread brand that starts offering bagels and breakfast muffins too.

If you already have a loyal customer base, a customer franchise extension is

a good option to boost sales. You can use the trust you’ve built with your
existing customers and market new products to them.

Benefits

 Getting the most from your existing customer base

 Strengthening your parent brand
 Exploring new market opportunities

 Brand distinction extension

A brand distinction extension can be used by brands who have built a

reputation for selling a unique product. Brands that have an existing product
that’s highly regarded and known for its distinctive qualities can use this
reputation to expand into new sectors.

A brand distinction extension lets you make the most of your existing brand
reputation to create additional products for new audiences. For instance, if

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your brand offers hiking backpacks that are known for being extra durable
and waterproof? You could introduce a line of backpacks made for the city
too.

Benefits

 Increasing your customer base

 Boosting revenue
 Meeting customer needs and desires

Examples of brand distinction extensions

1. Tide

Tide is a brilliant example to turn to for brand distinction extension

examples. Tide’s key brand distinction is its status as the world’s first
synthetic detergent. Established as a “washing miracle,” the brand has
grown to become the world’s best-selling detergent brand through a series of
strategic brand extensions.

The Tide product range now includes powder, liquid, Pacs, and more. They
have options for deep clean, odor removal, whitening actions, and other
niches. All these brand extensions are built on the original brand distinction
of Tide’s synthetic detergent formula.

Tips for implementing a brand extension

Consider customers needs. To help make sure your new product is

something your customers actually need, consider their desires.

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 Remain loyal to your brand message. When selecting your
expansion opportunities, make sure that it relates to your overall brand
message and relates to the other products you sell.
Test before you launch. Before committing to a new line of products,
consider testing with your current customers to get feedback from
them.

Comparison Chart

BASIS FOR HORIZONTAL VERTICAL

COMPARISON INTEGRATION INTEGRATION

Meaning When two firms combine, Vertical Integration is

whose products and when a firm takes over
production level is same, another firm or firms,
then this is known as that are at different
Horizontal Integration. stage on the same
production path.

Figure

Objective Increasing the size of the Strengthening the

business supply chain

Consequence Elimination of Reduction of cost and

competition and wastage.
maximum market share.

Capital Higher Lower

Requirement

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 BASIS FOR HORIZONTAL VERTICAL
COMPARISON INTEGRATION INTEGRATION

Self- No Yes
sufficiency

Strategy used Market Industry

to exercise
control over

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