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What Are The Advantages and Disadvantages of Brand Stretching?

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Introduction

What Are The Advantages and Disadvantages of Brand Stretching? In addressing the above question it is first important to establish what a brand is and the implications this gives to both existing products and products that may be laundered using existing titles. This essay will examine articles written concerning the stretching of brands and identify which brands have been successful and unsuccessful in this pursuit and why. It will also examine the financial motives for companies to penetrate existing markets using already established new products or services has lead to prosperity or disaster. The American Marketing Association refer to branding as the "use of a name, a term, a symbol or a design to identify the goods or services of one seller and to distinguish them from those of the competition " (WK4 Lecture). This use of branding is said to create an identity of the product that quickly allows consumers to identify a desired item and also gives a guarantee of quality of the product. Branding is also seen as being mutually beneficial to Manufacturers as protection is offered from competition, it allows maintenance of a premium price, promotion is made more efficient because the brand helps to evoke an image, and it also helps in the introduction of new products with the same brand name (WK4 Lectures). ...read more.

Middle

It may further be considered that the use of a brand name on its own may persuade people to try new products, such as the Mars Ice Cream Bar. This may be considered in particular when one looks at the larger supermarket chains such as Sainsbury's. Over the last two decades Sainsbury's have produced own brands to compete with nearly every product that they stock. Due to the image conveyed by Sainsbury's that implies (or in fact, guarantees) quality, it has been possible for them to penetrate nearly all areas of the food market successfully. This success may be attributed to the analysis of what a product is as defined by Nickels (1978). Nickels sees a product as "an intangible sense of value that a consumer perceives when he or she weighs the benefits and drawbacks of making an exchange". It may therefore be viewed that the success of Sainsbury's is mainly due to the consumer seeing little difference in quality between branded goods and Sainsbury's own label goods, with Sainsbury's holding the advantage when price is considered. This point is reiterated by Caulkin (1987), who states that "growing public perception that the best own-brands are no longer cheap alternatives to the real thing, but comparable in quality as well as price with the main manufacturers lines". The phenomenon of brand-stretching has not been unique to the manufacturing and retail sectors, but has in fact been used by those in the sector of public service. ...read more.

Conclusion

In their book 'Bottom Up Marketing' they argue that by companies widening their products, (even those who have been successful) they have hurt their 'brand equity'. This they attribute to the nature of communication in Western Society being so large that they feel that, "...you are lucky if your brand can mean one thing. Almost never can it mean two or three things", (10/90 p.106). Thus confusing consumers of an established image of original brands. From the above discussion it can be seen that brand-stretching can be a good way of penetrating new markets. by good use of an established brand name considerable savings can be made in the field of promotion, as there is already an existence of brand awareness so promotion can more easily be centred around the product itself, with the added bonus that consumers may feel more inclined to give an initial trail of products displaying brand names they already know, ( such as the Mars Ice Cream Bar). This too is now the case with established own-brand labels, such as Sainsbury's which offer marginally cheaper prices of products now perceived to be of equal quality to that of established brands. However inappropriate stretches, or those which do not offer good quality products have a danger of undermining the credibility of already established brands. Although from the research this sort of practice on the whole seems to lead to failure of the stretched brand, generally leaving the original in tact. ...read more.

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