8: Introducing and Naming New Products and Brand Extensions

Question 1

What are the 3 approaches when introducing a new product?

Answer 1

1. Develop a new brand
2. Apply one of its existing brands
3. Use a combination of new and existing

Question 2

What is brand extension?

Answer 2

A brand extension occurs when a firm uses an

established brand name to introduce a new product

Question 3

What are the 2 kinds of extensions?

Answer 3

– Line extension
▪ Adds a different variety, a different form or size, or
a different application for the brand
– Category extension
▪ Marketers apply the parent brand to enter a
different product category from the one it currently
serves

Question 4

What are the 4 different strategies according to Ansoff’s Growth Matrix?

Answer 4

Current Products and Current Markets - Market Penetration
New Products and Current Markets - Product Development Strategy
Current Products and New Markets - Market Development Strategy
New Products and New Markets - Diversification Strategy

Question 5

What are the advantages of extension?

Answer 5

1. Facilitate new-product acceptance

2. Provide feedback benefits to a parent brand

Question 6

What are the things under facilitate new product

acceptance?

Answer 6

• Improve Brand Image
• Reduce Risk Perceived by Customers
• Increase the Probability of Gaining Distribution and Trial
• Increase Efficiency of Promotional Expenditures
• Reduce Costs of Introductory and Follow-Up Marketing Programs
• Avoid Cost of Developing a New Brand
• Allow for Packaging and Labeling Efficiencies
• Permit Consumer Variety-Seeking

Question 7

What are the provided feedback benefits to the

parent brand and company?

Answer 7

Clarify Brand Meaning
• Enhance the Parent Brand Image
• Bring New Customers into the Brand Franchise and
Increase Market Coverage
• Revitalize the Brand
• Permit Subsequent Extensions

Question 8

What are disadvantages of brand extension?

Answer 8

Can confuse or frustrate consumers
Can encounter retailer resistance
Can fail and hurt parent brand image
Can succeed but cannibalize sales of parent brand
Can succeed but diminish identification with any one category
Can succeed but hurt the image of parent brand
Can dilute brand meaning
Can cause the company to forgo the chance to develop a new brand

Question 9

What are the evaluation brand extension

opportunities?

Answer 9

• Define Actual and Desired Consumer Knowledge about the Brand
• Identify Possible Extension Candidates
• Evaluate the Potential of the Extension Candidate
• Design Marketing Programs to Launch Extension
• Evaluate Extension Success and Effects on Parent Brand Equity