1. Executive Summary This report critically analyze the concept of brand extension and how customers perceive brand extension. This study also lay emphases on how powerful branding is and the need of brand extension as a useful tool to the marketer for achieving competitive edge in the market place. This report highlights more on the brand extensions applications: the two kinds of extensions that is vertical and horizontal brand extension. In addition, the report also deliberates as well as evaluate the categories and line of brand extension.
Depending on “Entrepreneur”, diversification means by location, adding product service, customers and markets to company’s portfolio; it can be a risk-reduction strategy. There are three types of diversification which are concentric, horizontal and conglomerate. The following information of three types of diversification is based on startupbizhub. Firstly, concentric diversification is that existing similarities between the industries in term of the thchnological standpoint. Through this, the firm may apply and compare its technological know-how to an advantage.
Organizational Strategy and Objectives The foundation of Wells Fargo’s strategy is its focus on customers. The company’s strategy tends to drive the choices they make and also enable them to prioritize its efforts, differential from peers, and build a lasting value for customers, employees, communities, and shareholders. The diversified business model tends to provide the company with the stability and the strength as it assures communities and customers that it exists to serve them and also the future generations. The objectives of the company are to be the leader in financial services in areas of team member engagement, customer services and advice, shareholder value, innovation, corporate citizenship, and risk management (Wells Fargo n.d). Through the use of innovative technology, Wells Fargo aims at creating new kinds of lasting value for businesses and customers and also increase efficiency for the internal
Branding experts are often concerned with the enormous positive and negative outcomes of branding and are constantly working to avoid the asymmetry resulting from it. Brand extension may improve the company’s brand image and enhances the parent brand image, makes consumer perceive its less risky to use the product if that company since it may be having international presence making people believe it a safer choice, as a result its brand equity and the market share can also be enhanced with more efficient labelling and packaging solutions, It also paves the way for further brand extension activities and side lines the cost incurring from creating a new brand and moreover it saves the cost associated with launching a new product because then it uses the name of the brand that’s already renown among the masses which make the fruitful existence of the new product launched under the brand name. Coming at the disadvantages of brand extension it can be a source of diminishing brand image and cannibalizing the sales of the parent brand’s product. It can also deteriorate identification of a parent’s company product which may have similar appearance to that which has been a result of brand extension. It may also affect the company’s capability to design a new brand if required and most importantly if the brand extension does not end up matching the requirement of its respective strategy the company may
A really important aspect about the diversification of products is the strategic alliances that the company made and is till making with the most important entertainment brands. The greater example is the alliance with Disney that helped to generate a tremendous amount of profit thanks to the film production and
Depending on product market and situations corporations are using different extension method either it be horizontal or vertical brand extension . Brand extension should be based on compatibility between parent and extended brand . If the extended brand matched with the parent brand then it 's acceptability or progress may be high .
Every company hopes to utilize brand extension leverage with its competitors and increase the sales or profits with the new product they offer. The purpose is to attract potential customers and retain loyal customers. When conduct brand extension, company should use a well-known
THE IMPACT OF MERGERS ON THE COMPANY AND THE SHARE PRICE Introduction: The most of the businesses across globe try to increase their financial stability and strengthen themselves by expansion. There are two ways of expansion been widely recognised to increase their operational excellence and gain substantial profits. Internal Expansion, by implementing new technologies, altering the course of operations, raising work performance, and launching new lines of products or services. Business expansion via internally will grow gradually, however the other method of External Expansion has greater impact than the other. The powerful external expansion occurs through merger, acquisitions, takeovers, amalgamations and dramatically supporting the globalization
ADVANTAGES OF BRAND EXTENSION: Some of the advantages of brand extension are as follows: • new product acceptance in a market is easier by brand extension as it reduces the risk which customers thought off regarding new brand • it helps in increasing the brand image • New product extension enhance the consumer interest and its willingness to try new product of a similar brand name. • Promotional cost and marketing cost is reduced • new product development need cost which is reduced by brand extension • Varieties of products are available for consumer to make