Factors Responsible For Success And Failure Of AÂ Extension Of A Product:
1. Characteristics of the Parent Brand (brand strength, uniqueness of knowledge structure, history of previous brand extensions)
In this case, there is many a success stories like that of Goodnight, in India, which earlier produced only mats and the heater but later ventured into mosquito coils and liquidifiers also with much success. On the other hand, Dettol’s fragrant bath soap was a failure. The consumer associated Dettol and its ‘antiseptic’ smell with cleanliness and being germ-free and when this was missing from the newly launched soap, they did not accept it. Here the strong brand strength worked against its extension.
2. Experience with the Parent Brand
In the case of Nestle products, the earlier experience with the brand causes the purchase of its new extension with relatively less skepticism as happened in the case of the new Nesquick. However, it may work otherwise also. During the launch of the new Tata Indica cars in India, there was a lot of trepidation as the old product of Tata Estate and Tata Sierra had a problem with their gearboxes and it was feared that the same was true in Indica’s case.
3.Characteristics of Extension Product (experience vs. search goods, uniqueness)
In the case of experience goods, it is relatively easier for the extensions to build on their core brand’s success as we see in the example of the success of Lux Bath Gel drawing from the success of Lux Soaps and Ponds face-wash drawing from the success of Ponds Moisturiser. There are many failures also such as failure of the Ariel washing soap though the Ariel detergent was doing well.
In the case of search goods, the consumer only gives the product a fair trial owing to its brand name. The brands that have made good this opportunity are Usha Sriram who used their brand goodwill from the fans that they sold, to their sewing machines. The brand which have not been able to are Onida which is very successful in the television segment but could not extend it to other electronic goods and failed in its attempt at washing machines.
4. Relationship between parent brand and extension product (fit between parent brand and extension product, Kind of information which is extended by the parent brand).
The relationship between parent brand and extended product should not be so far fetched that consumers find it difficult to relate the two. If the attributes of the extended brand are too far away from the original product, using the same brand name becomes a bane than boon. Indian Tobacco Company’s (ITC) CEO Y.C. Deveshwar has taken care of this fact, before plunging into unrelated areas like FMCG goods and commodity market. The general response of the consumer to the brand ITC is that they are famous for cigarettes and their Welcomgroup of hotels. Using the same brand name for commodity goods would have been hazardous for them. ITC has thus launched flour with a new brand name Aashirwad.
If one travels south and watches the southern TV channels, one starts hitting ads for Aashirwad flour: a direct confrontation with Hindustan Lever’s Annaporna brand.
5. Characteristics of the firm (size, marketing competence)
Brand extension also depends upon a firm’s capability to do so. For instance it is relatively easier and safer for coca-cola to go for brand extension, because of its large market presence and marketing skills.
Coca cola has been successful in its extension to mineral water segment under the name Kinley. The crux is that any brand should measure its risk taking capability before venturing into extension.
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