SYNOPSIS ON BRAND EXTENSTION OF ITC

Project Report Submitted towards

Partial fulfilment of requirements for obtaining the degree of Master of Business Administration

Session 2011-2012

SUBMITTED BY ANUJ KUMAR SHARMA Roll no- 1025170023 MBA 2nd year SEC-E

SUBMITTED TO: Mr. RAJESH TRIPATHI.

INTRODUCTION
Brand names can be defined as cultural symbols that may be based on real people, places, animals, objects, or something fictitious. A culturally familiar brand name promises certain Advantages of the product because it has rich brand equity ,including brand awareness, perceived brand quality and brand association. Recent functional MRI studies suggest that the prefrontal cortex may be crucial for the processing of brand knowledge . Brand extension is the use of established brand names to enter new product categories or classes .Evaluation of brand extension is often assumed to be determined by categorization processes . Laboratory research suggests that the influence of a famous brand name on brand extension depends on the perception of how well the extension products match the original brand category in customers brand-cognitive process . It means that when consumers encounter a new extension product, they will assess this product by the original brand category not only in physical similarity but also in functional similarity or the context in which it is used . Studies also show that consumers attempt to maintain a certain level coherence in their perception of a brand when encountering new information about a product under this brand . This finding suggests that match is a key factor in successful brand extension. In practice, however, it is very difficult to observe such matching in consumers mind before their purchase decision. To avoid potential failure of marketing a new product under the existing famous brand name, identifying the mismatch is very important forth manufacturers to keep away from huge losses.

BRAND EXTENSION
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 as parent 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.

Literature Review BRAND EXTENTION & ITC

ITC is one of India's foremost private sector companies with a market capitalisation of over US $ 33 billion and a turnover of US $ 7 billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC ranks among Indias `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asias 50 best performing companies compiled by Business Week. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging , Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The Company's 'e-Chou pal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's wholly owned Information Technology subsidiary, ITC InfoTech India Ltd, provides IT services and solutions to leading global customers. ITC InfoTech has carved a niche for itself by addressing customer challenges through innovative IT solutions.

ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC employs over 26,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalising environment to consistently reward more than 4, 17, 000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the Nation. For the Shareholder." ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. As the Company's ownership progressively Indianite, the name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agribusiness, Foods, Lifestyle Retailing, Education & Stationery and Personal Care - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'. (A) Fundamentals of fashion brand Concept of fashion brand equity, awareness, identity, Image, elements, personality, & positioning (B) Strategies to build and sustain fashion brand equity marketing strategies Communication strategies Fashion brand extensions reinforcing & revitalizing fashion brands (C) Measuring fashion brand equity Quantitative and qualitative methods Brand equity measurement system Brand value

OBJECTIVE OF BRAND EXTENTION

1. Growth opportunities 2. Cost reduction 3. Profitability 4. Maintaining and growing brand equity

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.

Research Objective

1. To study the mechanism and procedure of brand extension 2. To map the impact of brand extension on consumers retention 3. To measure the impact of brand extension on overall marketing strategy of ITC 4. To Identify the variables of Brand extension 5. To present conceptual framework of ITCs brand extension

5. Research Methodology

Research Methodology
Present research is diagnostic in nature apart from making a study of the various aspects of consumer buying behavior. In order to carry out the study, it is important to take help of Research methodology to complete the study properly.

Place of Research
The place of research was retail out lets.

Sample Design
Type of Universe The universe consisted of the people who came in retail outlets, which I have chosen.

Sample Size The size of sample for the study is 30.

Data Collection

Primary Data: A direct structured questionnaire technique was adopted with a separate set of questions. The questionnaire consisted of closed ended questions including multiple-choice questions.

Secondary Data: Various books and from net.

BIBLIOGRAPHY 1. 2. 3. 4. 5. www.google world .com www.itc.com www.wikepedia.com www.ask.com www.brand extension .com