Beand extension example of coca-cola
Brand extension sometimes is called brand stretching. It is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. The new product is called a spin-off. Organizations use this strategy to increase and leverage brand equity. (Wikipedia 2013) A brand's "extendibility" depends on how strong consumer's associations are to the brand's values and goals. One typical example is Virgin Group, which was initially a record label that has extended its brand successfully many times; from transportation (aeroplanes, trains) to games stores and video stores such a Virgin Megastores and to mobile service provider. Launching a new product is not only time-consuming but also needs a big budget to create brand awareness and to promote a product's benefits. Brand extension is one of the new product development strategies which can reduce financial risk by using the parent brand name to enhance consumers' perception due to the core brand equity. While there can be significant benefits in brand extension strategies, there can also be significant risks, resulting in a diluted or severely damaged brand image. Poor choices for brand extension may dilute and deteriorate the core brand and damage the brand equity. Most of the literature focuses on the consumer evaluation and positive impact on parent brand. In practical cases, the failures of brand extension are at higher rate than the successes. Some studies show that negative impact may dilute brand image and equity. In spite of the positive impact of brand extension, negative association and wrong communication strategy do harm to the parent brand even brand family. (NetMBA, http://www.netmba.com/marketing/brand/equity) In my report, my chosen company is Coca-Cola. Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines throughout the world. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke. Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century. The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and vending machines. The Coca-Cola Company also sells concentrate for soda fountains to major restaurants and food service distributors. The Coca-Cola Company has, on occasion, introduced other cola drinks under the Coke brand name. The most common of these is Diet Coke, with others including Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and special versions with lemon, lime or coffee. The new product I create is Coca-Cola Apple, which is apple flavoured coca-cola. My objective with this new product is to engage more sales and increase the market share by 5% by the end of 2014. The primary target market will be the customers who love coca cola, or soft drink and customers shares this similar characteristics and behaviours. The secondary target market for Coca-Cola Apple will be customers like soft drinks, but really like the taste of fruit juice, especially apple juice, and of course know the brand of Coca-Cola. When we talk about Coca-Cola’s competitors, the name Pepsi always comes the first. Pepsi, the flagship product of PepsiCo, The Coca-Cola Company's main rival in the soft drink industry, is usually second to Coke in sales, and outsells Coca-Cola in some markets. Pepsi is a carbonated soft drink that...
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