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Module 13: Critical Thinking

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Module 13: Critical Thinking Assignment 4

Choose one profile in the following Saudi Arabian markets:

A new electric car brand in the Saudi Arabian automotive industry.
A new fashion brand in the Saudi Arabian fashion industry.
A new luxury hotel brand in the Saudi Arabian hospitality industry
A new local travel/tours brand in the Saudi Arabian tourism industry.

For your chosen profile complete the following:

Identify the specific target market you are aiming for in the Saudi Arabian market.
Identify the factors that will influence successful digital brand strategies for your new product.
Briefly detail how you would create a digital marketing campaign that resonates with the target market?
Explain the importance of digital product taxonomy for your new product and target market.
Develop a pricing strategy for your new digital product.
What metrics would you use to measure the campaign’s effectiveness, and how would you make necessary adjustments?

Your well-written paper should meet the following requirements:

A minimum of five pages in length, not including the title and reference pages.

Formatted according to APA 7^th edition
Provide support for your statements with in-text citations from a minimum of five scholarly recent articles. Two of these sources may be from class readings, textbooks, or lectures, but the other three must be external.
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book of the course: Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 5th edition Published by Pearson (February 28, 2019) © 2020 by Kevin Lane Kelle, Vanitha Swaminathan

Strategic Brand Management: Building,
Measuring, and Managing Brand Equity
Fifth Edition

Chapter 13
Introducing and Naming New
Products and Brand Extensions

Learning Objectives
13.1 Define the different types of brand extensions
13.2 List the main advantages and disadvantages of brand
extensions

13.3 Summarize how consumers evaluate extensions and
how extensions contribute to parent brand equity
13.4 Outline the key assumptions and success criteria for
brand extensions

New Products and Brand Extensions
(1 of 2)
• Three branding approaches available when a firm
introduces a new product:
1. Develop a new brand
2. Apply one of its existing brands
3. Use a combination of new and existing

New Products and Brand Extensions
(2 of 2)
• A brand extension occurs when a firm uses an established
brand name to introduce a new product
– Line extension
▪ Adds a different variety, a different form or size, or a
different application for the brand
– Category extension
▪ Marketers apply the parent brand to enter a different
product category from the one it currently serves

Figure 13.1
Ansoff’s Growth Matrix
Current Products

New Products

Current Markets

Market Penetration Strategy

Product Development Strategy

New Markets

Market Development Strategy

Diversification Strategy

Blank

Advantages of Extensions
• For most firms, the question is not whether to extend the
brand, but:
– When, where, and how to extend it
• Advantages in two categories
– Facilitate new-product acceptance
– Provide feedback benefits to a parent brand

Facilitate New Product Acceptance
• Improve Brand Image
• Reduce Risk Perceived by Customers
• Increase the Probability of Gaining Distribution and Trial
• Increase Efficiency of Promotional Expenditures
• Reduce Costs of Introductory and Follow-Up Marketing
Programs
• Avoid Cost of Developing a New Brand
• Allow for Packaging and Labeling Efficiencies
• Permit Consumer Variety-Seeking

Provide Feedback Benefits to the
Parent Brand and Company
• Clarify Brand Meaning
• Enhance the Parent Brand Image
• Bring New Customers into the Brand Franchise and
Increase Market Coverage
• Revitalize the Brand
• Permit Subsequent Extensions

Figure 13.4
Expanding Brand Meaning Through Extensions
Brand

Original Product

Extension Products

New Brand Meaning

Weight Watchers

Fitness centers

Low-calorie foods

Weight loss and
maintenance

Sunkist

Oranges

Vitamins, juices

Good health

Kellogg’s

Cereal

Nutri-Grain bars,
Special K bars

Healthy snacking

Aunt Jemima

Pancake mixes

Syrups, frozen
waffles

Breakfast foods

Disadvantages of Brand Extensions (1 of 4)
Can confuse or 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 chance to develop a new
brand
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved

Disadvantages of Brand Extensions (2 of 4)
• Can confuse or frustrate consumers
– For example, one study found that consumers were
more likely to make a purchase after sampling a
product (and being given a coupon) when there were
six product flavors to sample than when there were 24
• Can encounter retailer resistance
– It has become virtually impossible for a store to offer all
the different varieties available across all the different
brands in any one product category
• Can fail and hurt parent brand image
– The Audi is a classic example
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved

Disadvantages of Brand Extensions (3 of 4)
• Can succeed but cannibalize sales of parent brand
– Diet Coke and regular Coke
• Can succeed, but diminish identification with any one
category
– Gillette introduced Venus (a razor for women); it may
have diminished its identification with the target
audience of men
• Can succeed, but hurt the image of the parent brand
– If customers see a brand extension as inconsistent or
conflicting with the parent brand customers may
change their perceptions of the parent brand
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved

Disadvantages of Brand Extensions (4 of 4)
• Can dilute brand meaning
– Gucci
• Can cause the company to forego the chance to develop a
new brand
– Amazon Kindle

Understanding How Consumers
Evaluate Brand Extensions
• Managerial Assumptions
• Brand Extensions and Brand Equity
• Vertical Brand Extensions

Figure 13.6
Examples of Category Extensions
Successful Category Extensions

Unsuccessful Category Extensions

Dove shampoo and conditioner

Campbell’s tomato sauce

Vaseline Intensive Care skin lotion

LifeSavers chewing gum

Hershey’s chocolate milk

Cracker Jack cereal

Jell-O Pudding Pops

Harley-Davidson wine coolers

Visa traveler’s checks

Hidden Valley Ranch frozen entrees

Sunkist orange soda

Ben-Gay aspirin

Colgate toothbrushes

Kleenex diapers

Mars ice cream bars

Clorox laundry detergent

Arm and Hammer toothpaste

Levi’s Tailored Classics suits

Bic disposable lighters

Nautilus athletic shoes

Honda lawn mowers

Domino’s fruit-flavored bubble gum

M r. Clean Auto Dry car wash system

Smucker’s ketchup

Fendi watches

Fruit of the Loom laundry detergent

Porsche coffee makers

Coors Rocky Mountain Spring Water

Jeep strollers

Managerial Assumptions
• Consumers have some awareness of and positive
associations about the parent brand in memory
• Some of these positive associations will be evoked by the
brand extension
• Negative associations are not transferred from the parent
brand
• Negative associations are not created by the brand
extension

Brand Extensions and Brand Equity
(1 of 2)
• Creating extension equity
– Creating a positive image for an extension depends on:
▪ How salient parent brand associations are
▪ How favorable any inferred associations are
▪ How unique any inferred associations are

Brand Extensions and Brand Equity
(2 of 2)
• Contributing to parent brand equity
– The effects of an extension on consumer brand
knowledge depends on:
▪ How compelling the evidence is about the
corresponding attribute or benefit association
▪ How relevant or diagnostic the extension evidence
is
▪ How consistent the extension evidence is
▪ How strongly existing attribute or benefit
associations are

Vertical Brand Extensions
• Vertical brand extensions
– Extend a brand up into more premium market
segments or down into more value-conscious
segments
– Common means of attracting new groups of consumers
• Logic is equity of parent brand can be transferred to appeal
to consumers who otherwise would not consider it

Evaluating Brand Extension
Opportunities
• Define Actual and Desired Consumer Knowledge about
the Brand
• Identify Possible Extension Candidates
• Evaluate the Potential of the Extension Candidate
• Design Marketing Programs to Launch Extension
• Evaluate Extension Success and Effects on Parent Brand
Equity

Figure 13.9 (1 of 2)
Brand Extension Guidelines Based on Academic Research
1. Successful brand extensions occur when the parent brand is seen as having favorable
associations, and there is a perception of fit between the parent brand and the
extension product.
2. There are many bases of fit: product-related attributes and benefits as well as nonproduct-related attributes and benefits related to common usage situations or user
types.
3. Depending on consumer knowledge of the product categories, perceptions of fit may be
based on technical or manufacturing commonalities or more surface considerations
such as necessary or situational complementarity.
4. High-quality brands stretch farther than average-quality brands, although both types of
brands have boundaries.
5. A brand that is seen as prototypical of a product category can be difficult to extend
outside the category.
6. Concrete attribute associations tend to be more difficult to extend than abstract benefit
associations.
7. Consumers may transfer associations that are positive in the original product class but
become negative in the extension context.
8. Consumers may infer negative associations about an extension, perhaps even based on
other inferred positive associations.
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved

Figure 13.9 (2 of 2)
Brand Extension Guidelines Based on Academic Research
9.

It can be difficult to extend into a product class that is seen as easy to make.

10. A successful extension can not only contribute to the parent brand image but
also enable a brand to be extended even farther.
11. An unsuccessful extension hurts the parent brand only when there is a strong
basis of fit between the two.
12. An unsuccessful extension does not prevent a firm from backtracking and
introducing a more similar extension.
13. Vertical extensions can be difficult and often require sub-branding strategies.
14. The most effective advertising strategy for an extension is one that
emphasizes information about the extension (rather than reminders about the
parent brand).

15. Individual differences can affect how consumers make an extension decision,
and will moderate extension effects.
16. Cultural differences across markets can influence extension success.
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved

Extension Guidelines Based on
Academic Research (1 of 4)
1. Successful brand extensions occur when the parent brand has
favorable associations, and consumers perceive a fit between the
parent brand and the extension product
2. There are many bases of fit; both product-related and nonproductrelated attributes and benefits may influence extension fit
3. Depending on their knowledge of the product categories, consumers
may perceive fit based on technical or manufacturing commonalities,
or on surface considerations such as necessary or situational
complementarity
4. High-quality brands stretch farther than average-quality brands,
although both types have boundaries
5. A brand that consumers see as prototypical for a product category
can be difficult to extend outside the category
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved

Extension Guidelines Based on
Academic Research (2 of 4)
6. Concrete attribute associations tend to be more difficult to
extend than abstract benefit associations
7. Consumers may transfer associations that are positive in the
original product class but become negative in the extension
context
8. Consumers may infer negative associations about an
extension, perhaps even based on other inferred positive
associations
9. It can be difficult to extend into a product class that consumers
see as easy to make
10. A successful extension can not only contribute to the parent
brand image but also enable a brand to extend even farther
Copyright © 2020, 2013, 2008 Pearson Education, Inc. All Rights Reserved

Extension Guidelines Based on
Academic Research (3 of 4)
11. An unsuccessful extension hurts the parent brand only when
there is a strong basis of fit between the two
12. An unsuccessful extension does not prevent a firm from
backtracking and introducing a more similar extension
13. A co-branded brand extension can leverage the success and
equity of two brands
14. Both similar and dissimilar brands can partner successfully in a
co-branded extension to achieve greater synergies
15. Vertical extensions can be difficult and often require subbranding strategies

Extension Guidelines Based on
Academic Research (4 of 4)
16.The most effective advertising strategy for an extension is
one that emphasizes information about the extension
(rather than reminders about the parent brand)
17.Individual differences can affect how consumers make an
extension decision and will moderate extension effects
18.Cultural differences across markets can influence
extension success

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Module 13: Critical Thinking

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Module 13: Critical Thinking Assignment 4

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