Question

Find an example of a brand extension that you believe negatively impacted consumer perceptions of the brand. There are a couple of outrageous examples on the Internet, but I want you to come up with one of your own. Explain why you believe this to be the case. Give specific aspects of the brand extension that you believe were most detrimental as well as specific evidence. Include in your discussion the goals of a brand and advantages to the marketer and the consumer.

Answer 1

Brand extension is a process that the company uses for stating the same brand name in the different product categories. The organizations use this strategy to increase brand equity and improve the brand reputation in the market. For example, Patanjali has successfully established itself in more than one product line and has also started gaining more. However, some products, like Patanjali's apparel, do not show much growth in the market. Baba Ramdev has established his cosmetics and accessories website to attract more consumers. However, it has not shown explicit growth.

Moreover, it has proven a failure for the company. It is the case because the consumers have always seen the company in the pharmaceutical sector and not in the clothing sector. There are many established Indian firms in this sector already. These firms have successfully won the hearts and enhanced their customer loyalty. It is not the correct market for Patanjali because consumers like to wear branded and expensive clothes. Hence, the managers of the company should research in the particular sector, and take decisions. The goal of a brand is to spread its operations and increase its customer loyalty. The brand also provides many advantages to the consumers as well as the manufacturers. The first advantage is that it helps in identifying and differentiating between two or more brands. The next advantage is that the consumers find it easy to recognize the brand and create a perception in their mind. Also, the consumers prefer brands over local products. Hence, the companies should make effective decisions to maintain their reputation.