Brand extension strategies by The Coca-Cola Company
To effectively gain and attract most of the customers to your products, most of the profit-making organizations have sorted to various strategies like a brand extension to lure the customers to their products as one of their competitive advantages. The term brand extension can be defined as the strategy employed by the manufacturing firms or business within a competitive market by marketing products and services with a well-developed or popular name or images in the same product of different categories. The act of brand extension is aimed at improving the sales volume of the company by attracting more customers to their products as the image or name used is common and associated with greatness like better products in the market.
Following the extended competition in the beverages products, the Coca-Cola Company has resolved to extend its red bull branding to attract most of the market users to the products due to its unique futures like zero sugar content, which has been preferred by most of the consumers. Types of advantages and other features of brand extension used by The Coca-Cola Company in marketing their red bull brand have been discussed in the context below.
Brand extension strategies
Extending brand value
Improving the value of the brand that is sugar-free red bull drink by the Coca-Cola Company is a general term used in marketing to identify the company’s effort to maximize the brand to reach the given context that is justified by consumer taste and preference. In most cases, the extension of the brand has been triggered by the consumers’ behaviors that are through the comments and suggestions, their purchasing behaviors on that particular product; therefore, the management of the manufacturing organization should consider extending the brand value in order to meet customers taste and preference so as to maintain customers flow nd choice on that particular product. For instance, following customers’ suggestions and comments concerning the sugar level in the red bull product, the company has extended the value of their products by reducing the level of sugar content to zero to suit their customers’ tastes and preferences.
The company can choose to extend their brand using the methods like re-positioning that is finding an alternative area or market to position their products to ease accessibility, changing the brand name, renewing features of the products like taste and ingredient to suit consumers’ preferences and revising the price of such products.
Factors to consider in brand extension
The brand extension requires a formal decision-making process from the management body to consider various factors from the market like marketing testing to reduce the costs involved and to reduce any related risk which might arise from brand extension like the effectiveness of the product in the market. Brand testing will give the organization market response concerning the extended product through their purchasing behavior and their suggestion concerning the product. Based on the market response on the product, the organization can, therefore, prefer to continue with the new product or to find an alternative way of brand extension.
The organization should decide on what resources they will need to improve the value of the brand successfully. Enhancing the value of the product will require additional resources like raw materials, technology, and other related resources; hence the organization through the manufacturing department has to consider the resources needed and the availability of such resources before starting the improvement mission. The time required for completed rebranding should also be considered since it is one of the most valuable resources which is limited in the line of the productions and rebranding concerning the projected market response.
Since failure is part of the business, the organization should, therefore, work out strategies they will employ in dealing with the failures and other emergencies that might arise in the process of the brand extension. With the more advanced approach to handle the crashes and additional uncertainty in the market, the organization will not suffer much shock in case their expectations fail.
The potential immediate advantages associated with the branding of the products over producing a new product are also a factor to be considered by the management of the organization. In most cases, the cost of rebranding should not surpass the cost of producing new products; therefore, the administration should determine the related value of branding the product in comparison with the production of a new product. Market response as an immediate advantage will impact the rebranding decision since the whole branding process is aimed at increasing the market responses towards the product.
Increasing brand visibility
Brand visibility is related to the online management of the social media platforms by the company to effectively market their brands. Following technological improvement, social network service marketing has been a growing platform where the company interacts with the customers concerning their taste and preference for their products. The organization should consider the social platform as its brand extension strategy. It is believed that a sound planned profile in social network services is capable of persuading the reader or the product users to recommend such products base on the unique features of the product. This will act as a promotion strategy for the branded product. Social network users will consider the following factors displayed by the organization in branding their products; relevancy, recognition, and transfer features of the product in making their buying decisions.
Types of brand extension
Since the brand extension is the act of using the existing brand to promote another product, manufacturing firms have alternative methods of extending their brands in the market to gain more customers to beat the competition in the market. The following are some of the types of brand extension.
Companion extension. The company uses this type of branding to capitalize the complementary products like one can get a google cloud with a free Gmail account.
Product form extension. The company launches a product in a different form from the present form. For example, we have Google pixel by the mobile phone industry.
Customers franchise extension. Entails extending the products following customers’ tastes and preferences. Like baby shampoo, baby products by the Johnson company.