A presentation based on brand extensions, their pros & cons, and how may it affect a parent brand.

1. The Curious Case of
Brand Extensions

2. • Introduction of a host of new products under their strongest brand
names
What is a Brand Extension?

3. • Improved odds of new-product success
• Positive feedback effects
• Lesser cost of advertisements
Pros of a Brand Extension

4. • Brand dilution
• Cannibalization of existing products
• Loss of core customers
Cons of a Brand Extension

5. Concepts and Ideas Based on
the HBR article-
“Preserve the Luxury or Extend the Brand”

6. Chateau de Vallois
Gaspard- the owner, is
dilemmatic,
Whether to extend the brand,
or preserve the luxury.
Preserving Luxury

7. Difference between Exclusivity and Scarcity

8. Perceived Brand Value

9. Gaspard feels it is not right to
upset his
distributors(negociants) by
introducing a new brand of
wine, and sell it directly
Importance of Distribution Channels

10. There is a high risk of:
• Brand dilution
• Perceived brand value’s loss
• Loss of core customers
• Might annoy the distributors
Concluding…

11. • They don’t have enough
grapes
• They don’t own a
distribution channel
• The core customer base is
extremely loyal
• Distributors enjoy a
healthy relationship
Deciding factors

12. What should Gaspard do?

13. He must lean towards
Preserving the Luxury
Any alteration to the tradition
can be counter-productive

14. A peek into the Indian Context

15. • India is a developing and densely populated country
• Huge market segments
• Most segments’ size increasing rapidly
The Key Factors

16. • Entered the Indian market in 1990
• Initially positioned as a premium and fashionable menswear brand
How Van Heusen initiated?

17. • Targeted age group- 25-45 years
• Young office goers- fashion for the corporate world
Demographics

18. • The segment of below 25 years age was increasing rapidly
OPPORTUNITY!!
The need for extension

19. The Launch of VDot

20. • Launched in 2006, as a club wear brand
• Offered denim collection with trendy designs
• Differentiated its product from regular wear by promoting boldly
and attractively
How did it make its mark?

21. And again…
Introduced
Van Heusen Woman
with Indian celeb
Nargis Fakhri named
as the brand
ambassador

22. • In early 1990s, number of women entering workforce started
increasing
• No formal wear brand for office going women in India
OPPORTUNITY!!
The Key Factors

23. •Van Heusen Woman launched in India in 2006
• Offered complete wardrobe solutions to women
Thus..

24. And the recent one..
Van Heusen Sport
Launched in 2011, it produces
wear with a sporty look

25. • It registered a 10% increase in sales in 2012-13
• Up to 20% growth in turnover in fiscal 2013
• It maintained its focus on the new categories
How did it go for Van Heusen?

26. •Menswear continued to be the primary growth driver
•Womenswear- small but fast growing
The current players

27. Concluding..
Van Heusen’s decision to extend was a spot-on success!

28. • Parent brand’s equity
• Optimal POPs & PODs
• Implications on parent brand’s profitability
• Earlier scenario of the to-be-introduced product line
What judges the potential success of an extension?

29. Savlon introduced itself as a product which:
• Had a different smell
• Didn’t turn cloudy in water
• Didn’t give a stinging sensation
All differing with the existing leader, DETTOL
The Case of Dettol & Savlon

30. A case of Optimal POD selection
Savlon advertised the
superior efficacy of the
product and highlighted
the “no-sting” property

31. • Brand extension can be rewarding, but may prove to be equally fatal
simultaneously.
• With proper concepts, market segment knowledge, and a little
research, one can increase the odds of a successful brand extension.
• A luxurious brand, though, enjoys a higher level of brand loyalty. It
must take extra care before extending. The loyal customer base must
never be played with.
Summary

32. A very big Thank You to
Prof. Sameer Mathur
for making this internship
a great experience by teaching and guiding us
methodologically and enhancing our knowledge
manyfold.
By:
Kumar Ankur
IIT-BHU