an upscale line extension
Shantini Munthree and Geoff Bick
University of the Witwatersrand, Wits, South Africa, and
Nova Southeastern University, Fort Lauderdale, Florida, USA and University of the Witwatersrand, Johannesburg, South Africa Abstract
Purpose – The objective of the paper is to provide an understanding of how large organisations develop line extensions of their brands and to present guidelines for management when considering an upscale line extension. Design/methodology/approach – A qualitative research technique was used in this study. It involved case study research in the beverage industry, where 11 senior marketers were interviewed in depth.
Findings – A line extension into premium categories was seen to be an effective strategy to revitalise a brand. Respondents also stated that the line extension needs to be very closely linked to the core brand. Being an early entrant but not first-to-market or late-to-market was also important. Originality/value – Guidelines to management are provided and a framework is developed for using upscale line extensions in brand revitalization strategies. Marketing managers have been given a three-step approach to line extension management. Keywords Brand extensions, Brand management, Drinks, Case studies Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this article.
In the Brandgym (2003) brand stretch study, 83 percent of
UK marketing directors see extensions of an existing brand as the key way of launching new products and services in the
next two or three years, compared with only 3 percent for new brand creation. Although strongly supported by marketers, 27 percent of all line extensions fail according to the Association of National Advertisers. Nijssen (1999) states that while line extensions are the most common method of introducing new
products, research has primarily focused on brand extensions. Although line extensions are popular in practice, the literature in the area tends to be fragmented and characterised by an
absence of conceptual frameworks to guide empirical work
(Grime et al., 2002).
In addition, a number of experts point out that line
extensions can be a double-edged sword. They could provide
a new source of revenue, but they could also damage the
parent brand (Keller and Sood, 2003; Martinez and Pina,
2003). We adopt the Keller (1998, p. 451) definition of line extensions for this study: “A line extension is when the
parent (core) brand is used to brand a new product that
targets a new market segment within a product category
currently served by the parent (core) brand”. A brand
extension, on the other hand, is when “a current brand name is applied to a new product in a completely different product category” (Speed, 1998 p. 105). The main objectives of this paper are:
. to explore how senior marketing executives revitalise
brands through the development of upscale line
. to provide a set of guidelines for management to follow
when they are considering an upscale line extension.
The line extensions of beverage brands in South Africa are
investigated in this study.
Literature review and proposition development
Approaches to brand revitalization
Established brands run the risk of becoming tired as their
parent companies and market environments change.
Whatever the change, brand management requires strategic
decision making that sustains the brand’s equity for the long term.
The brand life cycle (BLC) model is commonly used by
marketers to describe a brand on a timeline. Marketers
generally aim to extend the life of profitable core brands
through various strategies throughout their life (Steinhardt, 2000).
The brand asset valuator (BAV) is another model developed
by Young and Rubicam (1991). It is used to understand
brands that become tired and irrelevant. This model