1) A brief description of the topic and the brand ( about 450 words excl in-text, otherwise balance goes to lit)
Nestle is the world’s leading nutrition, health and wellness company with 140 years of tradition started with baby food, followed by dairy products and in 1938 produce chocolates. The company is constantly innovating to keep pace with fast changing world to delight consumers.
Nestle’s ‘nest’ logo is a graphic translation of founder Henri Nestle’s name, which mean ‘little nest’ - an important corporate identity.
‘Good Food, Good Life’ is the brand promise to enhance lives, throughout life with good food and beverages. Nestle’s brand archetype is a caregiver.
Nestle applied glocally; ‘think globally act locally’ by adding many new products, and merged or acquired several companies to expand its operations and brand. Example: merged with Alimentana, a Swiss company producing Maggi soups and spices, acquired Peter, Cailler, Kohler Swiss Chocolate company innovated powdered drink called Milo, acquired Rowntree, a British company and its brands Kit Kat, After Eight, Smarties and Rolo, and diversified outside the food industry by being the major shareholder in L’Oreal, one of the world’s leading makers of cosmetics.
Its market-leading brands include Milo, Nescafe, Maggi and Nestle Bliss (Nestle focused on branding, 2012).
Brand attributes are the attractive benefits products or services which can be implied in the brand’s promise with a series of phrases. Nestle’s attributes are: 1) Food manufacturer with the highest safety and quality standards 2) Advanced technology used in product manufacturing, and 3) Social responsibility in contributing to the development of the country.
2) A brief literature review (450 words)
An extension strategy aims to prolong the life span of a mature product to prevent a decline in sales. The product can continue to fit in the company’s wider product portfolio as a cash cow. Should not be extended unless well-known and consumers have high awareness, and brand has good reputation among target market.
Market research, that is knowing the preference of target consumers before brand extension.
Branding strategy by educating consumer through media/advertising. A successful brand extension must convey a clear message, and ensure consumer are not confused by extended brand.
A prototype to be produced and sample distribution to test the market.
Finally a brand audit to evaluate the success of brand extension through focus group or feedback from others.
The rationale behind brand extension are:
1) To leverage its existing customer base and brand loyalty to increase its profits with new product offering 2) Competitors are expanding rapidly
3) Companies realized the importance of brand extension to sustain in the market 4) Extend market share
5) Enables the company to enter new categories at significantly lower costs 6) Capitalise on equity already paid for, example in established Nestle brand name
7) Brings news to existing brands when there is otherwise nothing new to say about them
Nestles’s brand extension strategies are:
Line extension on the same product characteristics, new flavours, size and packaging to consumer’s convenience. Example Milo’s 3-in-1 and Milo nuggets. Nestle mission statement “we believe that research can help us make better food so that people live a better life”.
Brand extension is development of new products, related product category under existing brand name. Example Nescafe and Nestea, sub-brands with a linked-name endorsement. A name with common element creates a family of brands. The subtle link to masterbrand but with its own identity and personality according to Aaker (1996, p.83-85). A new product linked by name with a brand familiar to consumers serve as a low-cost method for gaining initial market acceptance....