Brand Management - Meaning and

Important Concepts
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Management

Brand management begins with having a thorough

knowledge of the term brand. It includes developing a
promise, making that promise and maintaining it. It means
defining the brand, positioning the brand, and delivering the
brand. Brand management is nothing but an art of creating
and sustaining the brand. Branding makes customers
committed to your business. A strong brand differentiates your
products from the competitors. It gives a quality image to your
business.
Brand management includes managing the tangible and
intangible characteristics of brand. In case of product
brands, the tangibles include the product itself, price,
packaging, etc. While in case of service brands, the tangibles
include the customers experience. The intangibles include
emotional connections with the product / service.

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Branding is assembling of various marketing mix medium into

a whole so as to give you an identity. It is nothing but capturing
your customers mind with your brand name. It gives an image
of an experienced, huge and reliable business.

It is all about capturing the niche market for your product / service and about creating a confidence in the
current and prospective customers minds that you are the unique solution to their problem.
The aim of branding is to convey brand message vividly, create customer loyalty, persuade the buyer for
the product, and establish an emotional connectivity with the customers. Branding forms customer
perceptions about the product. It should raise customer expectations about the product. The primary aim
of branding is to create differentiation.
Strong brands reduce customers perceived monetary, social and safety risks in buying goods/services.
The customers can better imagine the intangible goods with the help of brand name. Strong brand
organizations have a high market share. The brand should be given good support so that it can sustain
itself in long run. It is essential to manage all brands and build brand equity over a period of time. Here
comes importance and usefulness of brand management. Brand management helps in building a
corporate image. A brand manager has to oversee overall brand performance. A successful brand can
only be created if the brand management system is competent.

Brand extension or brand stretching is a marketing strategy in which a firm marketing a

product with a well-developed image uses the same brand name in a different product category.
The new product is called a spin-off.

Brand extension or brand stretching is a marketing strategy in which a firm marketing a product
with a well-developed image uses the same brand name in a different product category. The new
product is called a spin-off. Organizations use this strategy to increase and leverage brand
equity (definition: the net worth and long-term sustainability just from the renowned name). An
example of a brand extension is Jello-gelatin creating Jello pudding pops. It increases awareness of
the brand name and increases profitability from offerings in more than one product category.
A brand's "extendibility" depends on how strong consumer's associations are to the brand's values
and goals. Ralph Lauren's Polobrand successfully extended from clothing to home furnishings such
as bedding and towels. Both clothing and bedding are made oflinen and fulfill a similar consumer
function of comfort and hominess. Arm & Hammer leveraged its brand equity from basic baking
soda into the oral care and laundry care categories. By emphasizing its key attributes, the cleaning
and deodorizing properties of its core product, Arm & Hammer was able to leverage those attributes
into new categories with success. Another example is Virgin Group, which was initially a record label
that has extended its brand successfully many times; from transportation (aeroplanes, trains) to
games stores and video stores such a Virgin Megastores.
In the 1990s, 81 percent of new products used brand extension to introduce new brands and to
create sales.[1] Launching a new product is not only time-consuming but also needs a big budget to
create brand awareness and to promote a product's benefits.[2]Brand extension is one of the new
product development strategies which can reduce financial risk by using the parent brand name to
enhance consumers' perception due to the core brand equity.[3][4]
While there can be significant benefits in brand extension strategies, there can also be significant
risks, resulting in a diluted or severely damaged brand image. Poor choices for brand extension may
dilute and deteriorate the core brand and damage the brand equity.[5][6] Most of the literature focuses
on the consumer evaluation and positive impact on parent brand. In practical cases, the failures of
brand extension are at higher rate than the successes. Some studies show that negative impact may
dilute brand image and equity.[7][8] In spite of the positive impact of brand extension, negative
association and wrong communication strategy do harm to the parent brand even brand family.[9]
Product extensions are versions of the same parent product that serve a segment of the target
market and increase the variety of an offering. An example of a product extension is Coke vs. Diet
Coke in same product category of soft drinks. This tactic is undertaken due to the brand loyalty and
brand awareness they enjoy consumers are more likely to buy a new product that has a tried and
trusted brand name on it. This means the market is catered for as they are receiving a product from

a brand they trust and Coca-Cola is catered-for as they can increase their product portfolio and they
have a larger hold over the market in which they are performing in.

Brand Extension - Meaning,

Advantages and Disadvantages
Brand Extension is the use of an established brand name in new product categories. This new category
to which the brand is extended can be related or unrelated to the existing product categories. A
renowned/successful brand helps an organization to launch products in new categories more easily. For
instance, Nikes brand core product is shoes. But it is now extended to sunglasses, soccer balls,
basketballs, and golf equipments. An existing brand that gives rise to a brand extension is referred to
asparent brand. If the customers of the new business have values and aspirations
synchronizing/matching those of the core business, and if these values and aspirations are embodied in
the brand, it is likely to be accepted by customers in the new business.
Extending a brand outside its core product category can be beneficial in a sense that it helps evaluating
product category opportunities, identifies resource requirements, lowers risk, and measures brands
relevance and appeal.
Brand extension may be successful or unsuccessful.
Instances where brand extension has been a success arei.

Wipro which was originally into computers has extended into shampoo, powder, and soap.

ii.

Mars is no longer a famous bar only, but an ice-cream, chocolate drink and a slab of chocolate.

Instances where brand extension has been a failure arei.

In case of new Coke, Coca Cola has forgotten what the core brand was meant to stand for. It
thought that taste was the only factor that consumer cared about. It was wrong. The time and
money spent on research on new Coca Cola could not evaluate the deep emotional attachment
to the original Coca- Cola.

ii.

Rasna Ltd. - Is among the famous soft drink companies in India. But when it tried to move away
from its niche, it hasnt had much success. When it experimented with fizzy fruit drink Oranjolt,
the brand bombed even before it could take off. Oranjolt was a fruit drink in which carbonates
were used as preservative. It didnt work out because it was out of synchronization with retail
practices. Oranjolt need to be refrigerated and it also faced quality problems. It has a shelf life of
three-four weeks, while other soft- drinks assured life of five months.

Advantages of Brand Extension

Brand Extension has following advantages:
1. It makes acceptance of new product easy.
a. It increases brand image.
b. The risk perceived by the customers reduces.
c.

The likelihood of gaining distribution and trial increases. An established brand name
increases consumer interest and willingness to try new product having the established
brand name.

d. The efficiency of promotional expenditure increases. Advertising, selling and promotional

costs are reduced. There are economies of scale as advertising for core brand and its
extension reinforces each other.
e. Cost of developing new brand is saved.
f.

Consumers can now seek for a variety.

g. There are packaging and labeling efficiencies.

h. The expense of introductory and follow up marketing programs is reduced.
2. There are feedback benefits to the parent brand and the organization.
a. The image of parent brand is enhanced.
b. It revives the brand.
c.

It allows subsequent extension.

d. Brand meaning is clarified.

e. It increases market coverage as it brings new customers into brand franchise.
f.

Customers associate original/core brand to new product, hence they also have quality
associations.

Disadvantages of Brand Extension

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.

2. There is a risk that the new product may generate implications that damage the image of the
core/original brand.
3. There are chances of less awareness and trial because the management may not provide
enough investment for the introduction of new product assuming that the spin-off effects from the
original brand name will compensate.
4. If the brand extensions have no advantage over competitive brands in the new category, then it
will fail.

Why Do Brands Have Extensions ?

As the business environment is changing, the profile of the organizations as well as the way of conducting
business is changing too. Use of technology and globalization has changed everything about business.
Marketing is no longer what it used to be. Online marketing has changed the face of conventional
marketing and both are incomparable by any standards.
When we look at the job profile of brand managers, we find that over the past few years, there have been
several changes. Todays brand managers are not only planning product promotion and marketing
services, but work as business managers responsible for the brand. They are in fact responsible for the
sales, growth as well as the profits of the brand in Multinational companies. A strong brand may have a

team of brand managers working on the brand across several geographic locations and countries. With
the global brands being present in various markets, there arises the need for local factors and
sensibilities to be built into the brand and into the brand management as well. Therefore it makes it
imperative to build a brand management team or structure that can work through micro and macro levels.
Take a look at the shelf in the super market when you visit next time and you will be surprised to see that
each of the leading brands be it in the medical section, soft drink or grocery item, there are likely to be
multiple variations of the same brand with little difference. Of course we are talking about the brand
extensions that have become the latest strategy adopted by brand managers to exploit the brand value.
Coke is perhaps the best and the most common example where you get to see variations of coke in the
shelf today. Brand extensions have become the norm of the day. The question that one needs to ask is
whether such brand extensions are really required and worthwhile?.
In the market place, where competition is very high and intense amongst brands, the brand
managers are always under pressure on multiple fronts. First and foremost, for a brand to grow or
retain market share, there has to be continual effort to deliver incremental value through the brand.
Secondly, managements have increased expectations from the brand in terms of revenue growth, market
share as well as the bottom line. Brand managers therefore are forced to opt for brand extension
strategies in order to create product differentiation and to increase revenue streams. Sometimes, brand
extensions become necessary to reign in some of the niche segments which may not be addressed by
the parent brand and thus the brand extension helps gain incremental market share.
Brand extensions are also considered to be the most natural progression for brands. When organizations
spent a lot of investments into manufacturing and technology for launching the parent brand, they would
not like to leave out any opportunity to capitalize on the capacity that they have created and maximize
returns on investment.
The next logical question that one asks is whether such brand extensions are useful and beneficial for the
brand. What is the effect of brand extensions on the parent brand?. It is difficult to predict what the exact
result would be for, the results in the case of such brand extensions have been mixed in the market.

Brand Extension - A Success or

Failure ?

Brand management has become quite a challenge for brand managers as well as the Organizations
today. Intense competition and the decreasing product life of a brand add further dimensions to
the brand management problem. Brand managers by and large opt for brand extensions now
days. You can check any shelf in the super market and you will see variants of the same brand occupying
the shelf space. This is true in all cases be it with a soft drink brand leader like Coke to a cream, shampoo
or toiletry.
Brand managers are always under pressure to grow the market share and increase revenue. Under
constant pressure and intense competition, they find it easier to bring out brand extensions in order to
provide continual change and an increased value perception to the consumers. Brand extensions also
help them to capture the niche segments in the market that have not be covered by the parent brand. On
the part of the management, brand extensions prove to help in maximizing capacity utilization and
stretching resources to the maximum.
However, the question that bothers every brand manager is whether such brand extension is good for the
parent brand or whether it is a mistake that one is committing in the long run. There is no straight answer
to this question. In some cases, brands like GE, Proctor & Gamble, Spencers etc have been hugely
successful in making foray into new businesses using the parent brand and stretching the brand. Brand
extensions too have worked well for brands like Nivea, Dove and Loreal etc. In many cases, the brand
extensions and stretching exercises have failed too.
There is definitely a case for brand extensions in the market for various reasons. There is nothing wrong
in a firm exploiting the brand image or brand value when they have strived to build the parent brand over
a period of time. Economically too it makes sense for the company to resort to brand extension which is
far cheaper than introducing and promoting a new brand. If successful, brand extensions can help
strengthen the parent brand as well as capture the niche market segments no doubt.
However, the thinking behind the brand extension and the strategy is what makes the brand
extension a failure or a success. In cases where the brand extension is planned to auger short term
revenue, it may not withstand the test of times. The danger of brand extension is something that should
be accounted for before jumping into brand extensions. The failure of a brand extension can affect the
perception of the consumers with regard to the parent brand and damage the brand value. In Some
cases, the brand extension products may not generate new revenue but eat into the parent brands
market share itself.
What works for brand extension is difficult to say. Depending upon the product, one can perhaps map the
market and arrive at a good judgment. Categories like biscuits, soft drinks, chewing gum, sauces and
jams etc generally do well with brand extensions. The same does not hold good in terms of all products.
Branding experts opine that though there is no guaranteed formulae for success in brand extensions,
when the same is carried out as a part of a well identified and planned strategy, it can be successful. A
well identified and planned strategy involves identifying the core brand value and perception and building
brand extension by retaining the same values but delivering increased value through brand extension.

Kingfisher is an Indian beer brewed by United Breweries Group, Bangalore. The brand was
launched in 1978. With a market share of over 36% in India, it is also available in 52 other countries.
[1]

The Heineken Group holds 37.5% equity shares in United Breweries Ltd. [2]

Kingfisher was ranked 74th among India's most trusted brands according to the Brand Trust
Report 2012, a study conducted by Trust Research Advisory. In the Brand Trust Report 2013,
Kingfisher was ranked 102nd among India's most trusted brands and subsequently, according to the
Brand Trust Report 2014, Kingfisher was ranked 198th among India's most trusted brands. [3]
During the years 2009 thru 2015, United Spirits (USL) / Diageo exited all non-core investments in
United Breweries and sold 850,000 INR shares to Heineken, which will now give it leverage to
managing affairs of India's largest beer producer. USL sold 3.21% shares for Rs 872 crore in a block
trade. The shares were sold at Rs 1,030 apiece, a slight premium to Tuesday's closing price of Rs
1,014.10. As of July 2015, Heineken's stake in United Breweries (UB) has increased from 39% to
42.1%. This deal will give Heineken an upper hand over Vijay Mallya in running the company.

Kingfisher Airlines Limited was an airline group based in India. Its head office was
in Andheri (East), Mumbai and registered officein UB City, Bengaluru. Kingfisher Airlines, through its
parent company United Breweries Group, had a 50% stake in low-cost carrierKingfisher Red. Until
December 2011, Kingfisher Airlines had the second largest share in India's domestic air travel
market. However, the airline had been facing financial issues for many years, [3] and due to a severe
financial crisis faced by the airline at the beginning of 2012, this share dropped to the lowest in the
market in April 2012.[4][5]
The airline had shut down its operations and locked out its employees for several days when on 20
October 2012 the DGCAsuspended its flight certificate. The suspension resulted from the airline's
failure to give an effective response to the show-cause notice issued by the DGCA. On 25 October
2012, its employees agreed to return to work.[6] However, in February 2013 the Indian government
announced the withdrawal of both domestic and international flight entitlements allocated to the
airline.[7] The CEO quit on 17 February 2014.[8]

Kingfisher Airlines (IATA:IT; ICAO:KFR; Callsign:KINGFISHER) was established in 2003. It is

owned by the Bengaluru based United Breweries Group. The airline started commercial operations
in 9 May 2005 with a fleet of four new Airbus A320-200s operating a flight from Mumbai to Delhi.[1] It
started its international operations on 3 September 2008 by connecting Bengaluru with London.
Kingfisher's head office is located in Kingfisher House Western Express Highway Vile Parle (E)
Mumbai 400099 India and its registered office is located in UB City, Bangalore.[2][3] Its head office
was previously in the Kingfisher House in Vile Parle (East), Mumbai.[4] In 2012 Vijay Mallya was
trying to sell the Vile Parle Kingfisher House.[5] The airline had shut down its operations when on 20
October 2012 the DGCA suspended its flying license. This suspension had been due to failure to
give an effective response to the show-cause notice issued by DGCA. However, The airline had
locked out its employees for several days before this suspension. On 25 October 2012, the
employees agreed to return to work.[6] On 7 June 2010 Kingfisher became a member elect of
the Oneworld airline alliance when it signed a formal membership agreement. Kingfisher confirmed
on 20 December 2011 that it will join the Oneworld airline alliance on 10 February 2012. Kingfisher
would have been the first Indian carrier to join one of the big airline alliances. [7] However on 3
February 2012, owing to bad financial situation and two days after the International Air Transport

Association (IATA) clearing house suspended Kingfisher Airlines; the airlines participation to
Oneworld has been put on hold.[8]