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Alex Von Furstenberg is the Ultimate Personality

There are many people, whose personality is such that, they simply seem to be out of this world. One such name in the world of financial institutions is of Alex Von Furtsenberg. He has been continuously performing well with great dedication in this field, in order to take his organization to the top. Arrow Capital Management, founded by him is certainly one of the hugely growing financial companies in the market. His contributions are countless and the motivational power that he brings in is simply incomparable and outstanding.

Alex Von Furstenberg has created such hype in the market that, his interviews are being published in the Forbes magazine. Thus, if you want to learn anything about his views, ideas, vision and mission, you should certainly follow his interviews or visit his personal websites and blogs. These are the ultimate places on the internet, where you can find detailed information about this personality. The main reason behind the success of this person is his interest in the financial market. It might come as a surprise to many people, but investing and researching have been a great hobby of Mr. Furstenberg.

Thus, if you also want to become someone like Alex Von Furstenberg, you should certainly try to generate the hunger for succeeding like him. Being committed to what you are doing and being patient is very important for you. If you are able to possess these qualities in yourself, you can definitely touch the heights of this famous personality without any problems.

Successful Brand Marketing Strategies for Internet Marketers

What are brand marketing strategies and how can implementing brand marketing strategies help an online business? Just like a bricks and mortar business, an online business also needs to suggest a positive image to the customer. Regardless of what many people believe, branding is much more than creating a company logo and using a specific color theme. Brand marketing strategies have to include the purpose, focus and image of the business.

What are brand marketing strategies and how can using brand marketing strategies help an online business? Just like a bricks and mortar business, an online business also needs to suggest a positive image to the buyer. Regardless of what many people believe, branding is much more than creating a company logo and using a specific color scheme. Brand marketing strategies have to include the purpose, focus and image of the business.

Let’s discuss some of the benefits with regards to brand marketing strategies.

Benefits of Branding:

Having your own brand helps people to remember your company as opposed to companies using a common name. Brand marketing strategies are about helping the consumer to distinguish your company focus and purpose. Consumers are more likely to turn to your business when they know what you do and what you’re all about.

Brand marketing strategies also will help you to become well recognized. People who might not yet have done business with you should still be able to recognize who you are and what you do. If they see your advertisements on the web, receive your newsletter, receive regular mailings from your company by email, etc. then you’ve established a brand identity. When the tine arrives that they need your product or service then your company will be the first to come to mind.

Using brand marketing strategies will help acquire and keep customer loyalties. It is a fact that people connect closely with brand identities. The wise consumer wants a worthy product or service from a company they know they can trust. In delivering great brand identity people tend to remember you and your company. Quite often they’ll refer family, friends and associates to you based on their level of satisfaction.

Buyers will pay for image, it’s that simple. Society is very “brand aware.” Commonly people connect certain brand names with quality and only choose to purchase certain brands for that reason. Brand marketing strategies can reward a business well when done wisely. When a consumer only wants one certain brand of a product or service, they are willing to pay anything to get it. Establishing a great brand using brand marketing strategies will give your company a superior brand image and make the consumer forget about the competition.

Brand Marketing Strategies Initial Steps Of Branding Yourself

It’s worth repeating that branding is much more than a logo and color scheme or a catchy tag line. When using brand marketing strategies there are some initial steps that need to be followed to assure a successful brand image.

Step 1: Brand Marketing Strategies Learn About the Competition

A key factor in creating a successful brand image for the network marketer is to set yourself apart from the competition. It’s important to find how the consumer sees the competition and to recognize how the competitor distinguishes themselves from others. Identifying the competitors weaknesses and strengths is also important. When the competition’s weaknesses are realized it’s much easier to learn from their weaknesses and can be an asset in helping to showcase your business in a more positive manner.

Step 2: Brand Marketing Strategies Recognize Your Strengths

Once the competition’s weaknesses are known the focus should shift to defining your own company’s strengths. Doing a target market analysis can be extremely advantageous when what is learned from it is utilized. The usefulness of this tool will be realized by confirming that your company strengths are indeed important to your target market. In knowing your company strengths and what strengths are important to your customers, you now have the ability to market these successfully to the public involving them in your branding campaign. Branding marketing strategies have to be implemented properly to work.

Step 3: Brand Marketing Strategies Be familiar with Your Customer

Getting familiar with the target market is another key branding marketing strategy not to be ignored. Find out about their spending behaviors, how frequently do they buy? Are their purchases a select few or a wider assortment of services and products. Asking these types of questions can help to better market to the consumer. Additionally finding out your target customer’s needs, standard of living, attitudes and mindsets. In discovering and working with these personality qualities another key to marketing success has been found.

Step 4: Brand Marketing Strategies Be Your Brand

Be your brand, live your brand by ensuring that your company truly expresses the brand identity you’ve established. In other words if you’ve established fast response time to customer inquires as one of your brand marketing strategies,  then you must give quick response time to your customers. Every member of the company should live your brand and be your brand for your brand marketing strategies to be useful.

How to Make Sales With Branding

After the brand marketing strategies are in place then what? When thinking of the McDonald’s brand what comes to mind? Do the golden arches come to mind or Ronald McDonald? In the same way it is important to choose a niche online and brand our business accordingly. Get recognized for doing well in I area before moving on to another. Here’re some of the things needed to sell online with branding after the brand marketing strategies have been put into place.

1)  Your own company website. This demonstrate that you’re in fact a serious entrepreneur. Nothing screams amateur more than somebody showing a replicated affiliate web page.  Your own domain hosted website is a smart brand marketing strategy.

2)  An auto responder service and opt in form are two “must haves” in brand marketing strategies. More than likely your site’s visitors won’t purchase or join on the first visit. So when they leave your site you may lose them for good unless you capture their name in an opt in form. In doing this you are able to follow up with a series of emails messages. The follow up email messages help to reinforce your brand name in your target consumers’ minds. Remembering to keep the follow up at a respectful level of persistence can win sales.

All serious entrepreneurs must have an auto responder service. In adding to this brand marketing strategy you can increase your chances of capturing visitor names by offering a free gift like a report or ebook

3)  A profile picture of yourself and online signature adds not only a personal touch to your brand marketing strategies but lets your readers realize that you are a real person.

4) Sound, if your speaking voice is pleasant then put a voice recording together with your profile picture and signature to help humanize your company website and establish a rapport with your audience. This is a great brand marketing strategy that works well for many marketers.

5)  Create a business blog. Your blog can be an add on to your main domain or if you’re working on a tight budget you can use a free blog service at least until you start to realize some profits. Every brand marketing strategy discussed here can be put into a free blog. The blog should be updated often with fresh, unique content that is relevant to your niche. The message of the blog should remain a consistent one, so off topic content should not be added. The goal is to keep the theme and message consistent. Readers of your blog can be kept updated about your blog’s content by using RSS feeds.

6) A final brand marketing strategy that will be very important to the online marketer is a domain name. A domain name can be registered and forwarded to  point to your blog if you don’t use an add on to your primary website domain. Showing your audience that you’ve registered your own domain will show them that you are serious about your business.

Brand marketing strategies should be an integral part of all online business as people do want to do business with people that they know, like and trust.

Tags: brand, Internet, Marketers, Marketing, strategies, Successful

The Digital IQ of Prestige Brands in China

The Digital IQ of Prestige Brands in China

An exclusive report from L2 and Labbrand

The massive potential for retail businesses in China is no surprise to anyone—least of all prestige brands. After years of annual double-digit growth, China’s booming economy has left tens of millions of consumers seeking new ways to spend their disposable income. In 2009, China became the world’s second largest luxury market behind Japan, surpassing the United States.

Even though these trends were recognizable at least 20 years ago, many prestige brands are still playing catch-up in this diverse and rapidly changing marketplace. With 384 million internet users—more than the U.S. and Japan combined—much of the competition for customers and brand loyalty will play out online. The investment prestige brands make in their own digital competence could be a deciding factor in their ability to survive and thrive in China, and is likely to become increasingly important as the market matures.

What is Digital IQ and How is it Measured?

In July of 2010, L2, a think tank for prestige brands, partnered with Labbrand to measure and rank the digital competence of one hundred prestige brands in China . The measurement methodology, “Digital IQ,” gives each brand a combined score based on website translation, functionality and content, search engine optimization (SEO), social media performance, and digital marketing efforts.

Digital IQ Ranking: China

A Closer Look at the Numbers

These rankings reveal several interesting trends and correlations with other available metrics.  For example, the eight fashion brands measured show a strong positive correlation (0.72) between Digital IQ and brand value as reported in BusinessWeek’s annual 100 Best Global Brands report  . For the six automotive brands measured in both studies, the correlation is also strongly positive, at 0.61. These correlations do not necessarily mean that increasing Digital IQ guarantees an enhanced brand value. Nevertheless, the strength of these correlations suggests that the relationship between brand value and Digital IQ is not arbitrary. It is possible that valuable brands are more likely to have higher brand awareness, and therefore enjoy higher returns on the same or smaller investments in digital. Alternatively, valuable brands may be more likely to have higher marketing budgets and invest more heavily in digital media.

Prestige brands with the highest Digital IQ scores are breaking away from the pack. In mature markets, measurements of digital competence show prestige brands tightly bunched together—

leaders do not achieve significant separation from brands with average Digital IQ scores. But in China, digital Geniuses are not just in the lead—they’re winning big. For example, the five brands in the Genius category boast a mean Digital IQ more than 25 points higher than that of the next five brands. In comparison, brands ranked six through ten show a mean difference of only 13.2 points compared to those ranked eleven through fifteen. Digital leaders start “breaking away” at an inflection point around Digital IQ 120. Brands at the bottom end of the ranking demonstrate a similar but opposite effect—they lag significantly behind brands with average Digital IQ scores.

Fifty-nine percent of the luxury brands in the study of Digital IQ in China were also measured in a separate study of the Digital IQ of luxury brands in the U.S., dated September 2009. Brands measured in both indices demonstrated a correlation of 0.58 between their Chinese Digital IQ and their U.S. Digital IQ, suggesting that digital competence in one market can be leveraged in another. Beauty brands Lancôme, Clarins, and Estée Lauder show the greatest positive disparity between Chinese and U.S. Digital IQ. This suggests their recognition of the opportunity to build brands in China through digital media. Meanwhile, champagne brands Veuve Clicquot, Moët & Chandon, and Dom Pérignon demonstrate the largest negative disparity—none of them support a Chinese language version of their brand site. Negative disparities may speak to inability or carelessness when translating digital competence from West to East.

Missed Opportunities and Winning Strategies

Most prestige brands earning high Digital IQ scores in China share at least two attributes: local relevance and availability across a broad range of media.

Local relevance stems partly from familiarity with Chinese sites like Baidu, Kaixin, and Youku, which can be loosely compared to Google, Facebook, and YouTube, respectively. But brands doing business in China must recognize that for Western sites and their Chinese counterparts, different strategies are required; simply translating site content is often ineffective.

While homegrown search engine Baidu boasts 62 percent market share in China , only 39 percent of measured prestige brands come up first in its organic results when searching by English brand name. Meanwhile, 94 percent of brand sites came up first on Google.cn (prior to its departure from China) when using English names. When searching with Chinese names, approximately 30 percent of brand sites are not among the top three search results on either search engine. This indicates the difficulty of brand name translation for many multinational brands. These numbers suggest that many brands approach search visibility with a Google-centric mentality that fails to recognize the Baidu algorithm and other local nuances.

One way brands can enhance SEO is by creating more opportunities for consumer interaction through a combination of social network sites (SNS), microsites, bulletin-board systems (BBS) and e-commerce and mobile websites.

Although many prestige brands are eliciting thousands of user-generated comments, video uploads, blog posts, and photos on popular SNS like RenRen, Qzone, Kaixin001, and YouKu, very few are interacting directly with consumers on these sites. As consumers are increasingly expecting brand communications to be interactive, rather than one-way broadcasts, digitally savvy brands that are beginning to engage directly with users on SNS platforms stand to gain an edge. Mercedes-Benz, Audi, and BMW host contests on RenRen, while Dior has a page on Qzone. Digital Genius Lancôme boasts an official group on Kaixin001 with more than 250,000 members. Johnnie Walker also hosts a group on the platform.

Four of the brands in the study have invested in branded online communities. Digital Genius Lancôme launched an online community called Rose Beauty in 2006 and has four million subscribers. Estée Lauder and Clarins also host branded beauty communities. BMW has created a community for the estimated 150,000 BMW drivers in China through its MyBMWClub.cn site. Meanwhile, Audi, Mercedes-Benz, and Porsche have created simple-interface BBS to help facilitate discussions with avid fans. Although the appropriateness of microsites as a means of online consumer interaction is debatable, efforts from these brands demonstrate a heightened commitment to the Chinese marketplace.

On average, brands that embrace e-commerce boast Digital IQ scores 50 points higher than brands that do not sell online. The size of the e-commerce market in China may have quadrupled from 2006 to 2009 , but only ten of the 100 prestige brands in the study offer online transactions. The Beauty & Skincare category leads with six of 13 brands selling online. Many prestige brands opt against e-commerce for fear it will reflect poorly on the brand’s premium status and diminish control over the sales experience. However, as fashion brand and China first-mover Ports 1961 is the only foreign brand outside of the Beauty category to sell online, making e-commerce available would be a clear point of differentiation within many prestige categories.

In addition to website enhancements, SEO, and SNS, it is imperative for luxury brands to develop a mobile strategy. There are an estimated 745 million mobile phone subscribers in China , and more than one quarter of mobile users access the internet through their phones . China has considerably lower in-home internet penetration than most developed nations, and many Chinese consumers move directly from no internet to mobile internet. Yet, only 42 percent of the measured brands have mobile-enabled sites. Hong Kong brand Shanghai Tang is one of the first luxury brands to incorporate a Chinese language iPhone application.

Conclusion

While at least rudimentary digital competence is essential for prestige brands operating in China, specific digital strategies should be customized based on a brand’s vision and personality, opportunities and positioning, rather than a “check box” approach. As with other brand communication and media, digital strategy should be informed by comprehensive and up-to-date market research, strengthened by sound analysis and concrete brand positioning, and executed with distinctive and compelling creative work. Ultimately, brands with a deeper understanding of their Chinese customers, local competition, and familiarity with their own reputation and strengths will fare better, both online and off.

Tags: Brands, China, Digital, Prestige

Entrepreneurs Beware: Brands Are Dying!

It seems strange that a brand consultant such as myself would tell everyone that brands are dying, but I genuinely believe that we are in the middle of a significant cultural change. The brands that miss these changes and don’t adapt accordingly may not be around in a few years. It’s that serious. Get a coffee and a biscuit and read this carefully. It could just be the catalyst that encourages you to relate to your customers in a totally different way.

Brands Make Us Scared

The essence of successful branding is based upon fear. All the advertising, inspirational slogans and celebrity campaigns are all designed to make us feel like something is lacking in our life. We are not quite the person that we’d really like to be because we don’t have that particular product and it’s that fear of inadequacy that drives many of our buying decisions. Of course you can go to TopShop and buy a handbag that look’s like a Birkin, but you’ll never be like Kate Moss if you don’t go to Hermès and buy the genuine £6000 version.

I remember chatting to a designer from Ralph Lauren when I was doing some work on Savile Row and during a particularly dull show in London Fashion Week I asked why they went to such great lengths to showcase £20,000 dresses. In my ignorance I couldn’t understand why they would go to all that trouble when you never see anyone wearing such flamboyant creations in real life. In retrospect, the answer was obvious. They didn’t expect to sell more than half a dozen dresses, but what they did expect to happen was that the ‘halo effect’ would come into play.

In order words, most people can’t afford Ralph Lauren wardrobes, but they can afford a piece of the brand in the form of a perfume. That’s where the money is. The halo effect is basically the process of organically promoting part of your brand, by showcasing something else that is so aspirational that it is out of reach to most of us. Ford used to promote £200,000 Aston Martins. B&W sell £20,000 speakers. Remy Martin promote bottles of £20,000 Black Pearl Louis XIII brandy in order to sell more of the £50 Remy VSOP. Brands know that we want to be admired and respected by our peers, so they give us countless opportunities to satisfy our fear of inadequacy, by offering us cheaper products with the same logo on them.

The Best Brands Guarantee Dis-Satisfaction

Great brands are built on dissatisfaction. After all, if you were satisfied with your Revlon makeup or your Nike sneakers or your iPad, why would you buy another one? Satisfied means done, finished, I don’t need any more. In fact, most great commercial (and non-profit, and political) brands create a cycle of purchase based on ever-greater dissatisfaction with what we’ve got.

I have an unhealthy amount of vintage trainers. I have an iPhone 3GS which I love, but it already feels old because all my friends are flaunting iPhones 4′s. There’s nothing wrong with my 3GS. I just feel that I’m being left behind. Am I ever going to use ‘face time’ on an iPhone 4 to video chat with my friends? Probably not. But do I still want one? You betcha. I think it’s probably fair to say that your most unhappy customers are often your greatest source of learning. “Stop trying to make me unhappy!!!”

In the midst of last year’s heavy recession, Steve Jobs said,

“A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products In front of our customers, they would continue to open their wallets”.

Brands Are Worn Out

Michael Eisner of Disney has called the word brand “overused, sterile and unimaginative” and he’s right. When the brand manual grows bigger, heavier each year, you know you’re in trouble. When I was initially asked to do some work for Reebok with my illustrator friend James Walker, we were really excited about being involved with such an iconic brand and letting rip with our creative juices.

Sadly, our excitement soon wore off when we saw the length of the brand guidelines. We knew it wasn’t gong to be anywhere near as much fun as we thought, as the job became like a very boring jigsaw, just piecing all the various design components together. Looking back it doesn’t surprise me that Reebok, who once competed head on with Nike and Adidas, are now an also-ran as a sports brand.

Brands Are No Longer Mysterious

There is now much more of an anti-brand sentimentality as a result of various consumer movements and books like Naomi Klein’s infamous “No Logo”. When I was growing up in the late 80′s it was all about the label on your shirt. If you wore Sergio Taccini, Fila, Ellesse, Kappa or Cerutti you were the man, but when my (cool) friend Alan Steeple flaunted his logo-less rugby shirt, I began to notice the cultural shift, that it was becoming cool to notwear a logo.

“Companies are about their logos like guys are about their… you know. They love talking about them. They love to look at them. They want you to look at them. They think the bigger they are, the more effective they are. And they try to sneak looks at other guy’s logos when they can. But as any woman will tell you, nobody cares!” Luke Sulivan

There is more consumer awareness now and more people understand how brands work. More importantly, people understand how brands are supposed to work on them!

Brands Can’t Understand The New Breed Of Consumer

Consumer buying habits underwent a huge transformation in the 1960′s with the arrival of TV and the big advertising agencies promoting brands such as Proctor & Gamble, Ford and Kellogg’s, but until a few years ago not much had really changed. But then along came the internet and everything changed – from the way we connect with each other to the way we are entertained. Unfortunately, most brands haven’t changed in line with technology, thinking that a shiny website or multiple social media accounts will do the trick. It won’t.

The new customer is better informed, more critical, less loyal and harder to read. The white suburban housewife who for decades seemed to buy all the soap powder no longer exists. She has been joined by a new population of multi-generational, multi-ethnic, multi-national consumers.

Brands Hate Good Old-Fashioned Competition

The more designer brands and private labels we invent, the less we notice them as individuals. Most people are aware that we see over 4000 advertising messages a day, but on the average 45 minute supermarket shopping trip, you see over 45,000 brand names. How on earth are you ever going to get recognised as a new brand in that kind of market place? When I worked with Unilever, we estimated that in such a tough marketplace, you had on average 1.4 seconds to capture someone’s attention and make them pick your product off the shelf (instead of their usual choice of brand). If you are not number one or two, forget it.

More Brands Doesn’t Make It Any Easier

The greater the number of brands, the thinner the resources promoting them. Microsoft has 64 different sub-brands and they struggle to evenly allocate their billion marketing budget to each of them effectively. Compare that to Apple who spend the same amount but focus all their marketing efforts at just their core brand, and you can soon see exactly why Apple have overtaken Microsoft in the visibility stakes.

Brands Think Science Has The Answer

Most of the books on branding that I’ve read and the may brand workshops I’ve been to, all talk about the science of branding. The definitions, the charts, the diagrams and the SWOT analysis. All that stuff is important, but formulas have no imagination or empathy. The best brands tell stories and use emotion to communicate their messages, but there isn’t a formula that can deal with human emotion.

I recently worked with a very big FMCG food brand who’s advertising ideas were based upon analysis, demographics and Neilson ratings. They actually promoted accountants into brand management. No wonder they couldn’t understand why their campaigns weren’t working. Brands need to tell stories that make us feel something. Instead they were drowning in a sea of numbers, while some new start-up was working out of a bedroom somewhere, well on its way to stealing some of their market share.

Brands Have Become Dull

The story of brands has gone from daring and inspirational to one of caution and risk-aversion. Once the darling of the bold and the brave, brands are relying on the accumulation of past experiences rather than the potential of future ones. Headstones are replacing stepping-stones! If the antics of a middle-aged jumper wearing Richard Branson cause a riot (and they do), how bland and boring does that mean everyone else has become.

The Moral Of The Story…?
So what is the moral of my story (if any?)… Don’t be another me-too brand. Don’t do things the same way that you’ve always done them. If your advertising isn’t working, or you are unsure what is showing results, stop it immediately. Get out there and start connecting with your customers. And that doesn’t just mean joining Twitter and having a Facebok fan page. The answer isn’t “social media”. If you think about it, allmedia is social. It’s just about connecting with your customers. Saying “hello” to people. Calling them. Everyday. Visiting them (in person). I’m convinced that many of your customers are just dying for you to start a conversation with them. They want to tell you exactly what they want and why they want it.

Make a list of five customers you can call now…

[Right now!!!]

Brand Consultant, Blogger, Ex-Giraffe Keeper, Digital Curator and Author of Sex, Brands & Rock’n'Roll. I have been a brand consultant for over 12

Tags: Beware, Brands, Dying, Entrepreneurs

Brand Building Strategies

PRODUCT BRANDING

This is of the type one-brand one product. In terms of customer perception and information processing, the most effective way to designate a product is to give it an exclusive name, which would not be available to any other product. In the product branding strategy the brand is promoted exclusively so that it acquires its own identity and image. This way the brand is able to acquire a distinct position in the customer’s mind. The thrust is on making the brand acquire its ‘own’ set of associations and stand on its own. Product branding allows a brand achieve exclusivity and differentiation.

It does not share other products and does not take on company associations. The company’s name takes a backseat and the product does not get benefits from the company name. The greatest advantage in this case is that a brand can be targeted accurately to a distinct target market or customers because its positioning can be precise unambiguous. Customers connect easily with product brands since what the brand represents tends to be clear.

P&G have been follower of the product branding strategy. P& G’ s into baby care, beauty care, feminine care, health care, fabric care, home care, food and beverages, etc. P&G has been an ardent follower of the product brand strategy. Its brands are stand alones; people don’t even know that they all share a common root in P&G. the company does not share a common identity. Thus, a company following product branding is better positioned to venture into unrelated areas of activity without being a subject of market scrutiny.

Another advantage is that with an identifiable brand uniquely positioned and directed at a segment, the firm is able to cover an entire market spectrum by making multiple brand entries.

The drawbacks of product brands are essentially cost based. Creating individual brand is costly exercise. Only the firms that have deep pockets and long staying power can adopt this strategy.

LINE BRANDING

This is of the type ‘One brand many products’. Sometimes a brand is launched with a distinct concept e.g. Lakme (“source of radiant beauty”) Winter Care lotion .The brand appeals to a distinct market segment who appreciate and like the brand concept. The core idea is that the brand connects with the consumer group. Now the customers do not tend to be content with the one product, which the brand offers. Rather they want additional product which go hand in hand with the brand concept or application; for example a Lakme user wants all the products which enhance beauty-beauty lotion, deep pore cleansing cream, lipsticks, nail enamel, eye make up etc.

Line branding strategy illustrates how well cultivated brand can be extended on to a host of related products under a common concept. This strategy seeks to penetrate the customer rather than penetrating the market. It seeks to fulfill all complementary needs that surround a basic need. Line brands start with a product but later extend too a whole range of complementary products. The products in the line draw their identity from the main brand. Marketing products as a line enhances the brand’s marketing power rather than selling them as an individual brand.

Colgate has a whole range of dental care products. Colgate Total, Colgate Gel, Colgate toothpowder, as well as the various toothbrushes.

BRAND EXTENSION

Brand extensions, which are a popular means of introducing new products to the marketplace, fall under the ‘One brand all products’ type of brand strategies. In a typical brand extension situation, an established brand name is applied to a new product in a category either related or unrelated, in order to capitalize on the equity of the core brand name. Consumer familiarity with the existing core brand name aids new product entry into the marketplace, and helps the brand extension to capture new market segments quickly.

Brand extensions come in two primary forms: horizontal and vertical. In a horizontal brand extension situation, an existing brand name is applied to a new product introduction in either a related product class, or in a product category completely new to the firm. A vertical brand extension, on the other hand, involves introducing a brand extension. In the same product category as the core brand, but at a different price point and quality level. In a vertical brand extension situation, a second brand name or descriptor is usually introduced alongside the core brand name, in order to demonstrate the link between the brand extension and the core brand name (e.g. Marriott Hotels, Courtyard Inn by Marriott). Although a brand extension aids in generating consumer acceptance for a new product by linking the new product with a known brand or company name, it also risks diluting the core brand image by depleting or harming the equity, which has been built up within the core brand name. An inappropriate brand extension could create damaging associations, which may be very difficult for a company to overcome. The different types of brand extensions are:

Product form extension:

Product launched in a different form usually means line extension rather than brand extension. But if different product form constitutes entirely a different product category from customer behavior perspective, it would be called brand extension. For e.g. liquid milk and dried milk may not be perceived as the product category. Similarly chocolate bars and chocolate powder belong to different product categories.

Companion Product:

Brand extension is in the form of companion products is perhaps the most common. The idea perhaps is to capitalize on product complementarily. The consumer may view both products jointly and hence, provide scope for launching brand extension.

Customer franchise:

A marketer may extend a product range in order to meet the needs of a specific customer group. For instance, a company may launch a variety of products meant for e.g. nursery going school children. The focus here is not customer base but their diverse needs.

Company expertise:

Brand extensions often come in the forms of different product category introductions using a common name but emanating from a common expertise pool. This strategy is particularly true in Japanese countries.

Brand distinction:

Many brands achieve distinction in the form of a unique attribute, benefit or feature, which gets uniquely associated with the brand. In such situations the company can work backwards to launch different products, which essentially cash in on this distinction. For example, Parachute may have the expertise of coconut nourishment in customers mind over time. This would give the company Marico the opportunity to launch a variety of products exploiting this distinction.

Brand image or prestige:

A brand extension may involve a foray in to unrelated product categories based on a brand’s exclusive image or prestige. Brand exclusivity or prestige bestows great extension opportunities. This is particularly true of designers and artist brands.

UMBRELLA BRANDING

This again is of the type ‘One brand all products’. An umbrella brand is a parent brand that appears on a number of products that may each have separate brand images. Firms have a short-run incentive to reduce quality and save costs, as consumers can only observe quality ex post.

Videocon’s range of home appliances – air conditioners, refrigerators, televisions, washing machines, etc. Phillips also has a whole range of home appliances under the brand name Phillips-the mixers, irons, televisions, etc.

Umbrella branding scored well on the dimension of economics. Investing in a single brand is less costly than trying to build a number of brands. By leveraging a common name across a variety of products, the brand distributes its investment. Hence umbrella branding works out to be an economical strategy. Using an umbrella brand to enter into new markets (Tata making a foray into the automobile car market) allows considerable savings. The brand bestows the new product advantages of brand awareness, associations and instant goodwill.

One first explanation for brand extensions is that umbrella branding is a form of economies of scope, as it economizes on the costs of creating a new brand. Brands have an intrinsic value (status or otherwise) and are therefore like a “public good” in the sense that the more products are sold under the same brand the greater the total value created. A different perspective on brand extensions is that, in a world where consumers are uncertain about product characteristics (due to horizontal or vertical differentiation), brands may play an informational role. Umbrella branding may reduce uncertainty about a new product’s attributes, a fact that increases value if consumers are risk averse. Considering these factors it can be said that umbrella branding is a superior strategy when there is a significant overlap between the set of buyers of each of the firm’s products. This result extends the well-known notion that brand extensions and umbrella branding are only successful if there is a good fit between the different products under the same umbrella.

The main danger

Tags: brand, Building, strategies