Essay Example on Brand Extension: Benefits & Challenges of Brand Management

Introduction

Brand extension entails the successful incorporation of an already existing corporation's product to launch a new or modified product in a new market or niche (Seltene & Brunel, 2008). Notably, brand management forms a significant component in the product strategy of every organization that wants to continue in existence for the foreseeable future, particularly organizations that operate in competitive industries. Therefore, from the above sentiments, it is worth noting that brand development cannot take place in isolation, but rather within exiting products and service lines (Seltene & Brunel, 2008). Brand extension is a key marketing strategy that, if effectively and successfully employed, would lead to a good reputation, increased sales, customer loyalty, and improved market share in the associated industry. Therefore, through the incorporation of various concepts of brand extension, the paper aims to analyze and suggest a brand extension idea of Coca Cola Company.

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Brand Background and Company Overview

Coca Cola is an American multinational corporation manufacturing non-alcoholic beverages, concentrates, and syrups (Tripodi, 2013). The corporation deals in such brands, including Powerade, Dasani, Minute Maid, Del Valle, Georgia, Sprite, Coca Cola Zero, and Gold peak. Notably, the corporation enjoys brand loyalty from its existing products, and thus brand extension idea would no doubt boost the corporation sales and profitability. Moreover, developing brand extensions will benefit the corporation since it would be cost-effective for developing or producing a new product. For instance, the corporation created an extension of Diet Coke, which was successfully developed from an existing product (Tripodi, 2013). The moved increased the corporation market share significantly with no additional cost on the advertisement and promotional campaigns. Therefore, more strategic extensions would be ideal for the corporation's growth and expansion.

Extension Idea

The brand extension idea will involve the incorporation of a well-known brands of the corporation. The new brand would be called 'Cokehealth', which will mostly target consumers from late forty years of age and above. The brand will be a carbonated drink developed from the recently launched brand of Coke Zero and will thus address health gaps that most aging people often experience. Cokehealth will have no sweeteners, just like the parent product, as well as no additive. With the extension, the product will no doubt increase the organization's profitability as the loyal customers will perceive it as a healthy sparkling beverage.

Using no additives or sweeteners, the product would be a healthy, sparkling beverage. Notably, in the contemporary corporate world, public health has been a major concern to most household and staying healthy means consuming healthy products, and which the corporation wants to achieve. The corporation perceives its customers across the globe as its main assets making it develop healthy products aimed at meeting consumers' health needs and preferences (Tripodi, 2013). The parent product is booming and highly selling in the market since it has zero sugar content, which has addressed concerns of overweight due to calorie intake among customers. Moreover, it has a wide scope has it has captured new markets. Therefore, it no doubts that the new brand would sell and increase organization profitability.

Rationale and Justification

The new product is worth launching since it is aligned with the organization's mission and also multiple significant factors that would benefit both the organization and the consumers. Notably, the corporation mission stipulates that "To refresh the world. To inspire moments of optimism and happiness. To create value and make a difference (Tripodi, 2013). Therefore, the corporation is inspired by the mission statement of creating value across the globe. The corporation primary objective is to create value and make a difference, which exceeds customers' expectations across the globe. Therefore, the new product would be developed in line with the mission statement.

The new product would satisfy the needs of thirsty customers or 'the need state of thirst.' The brand would be different from what the competitors offer in the market due to its unique makeup and components. Moreover, it is worth noting that brand extension does not guarantee success, and as such, may lead to financial losses to a company. However, in term of In terms of financial feasibility, the Coca-Cola Company reported about $31 billion in 2009, making to have a means of successfully launching the new products across its market segments (Tripodi, 2013). Moreover, concerning practicability, the corporation has successfully marketed its newly launched brands, including Coke Zero and Schweppes, to older consumers, and hence marketing Cokehealth would not pose significant problems.

Besides, the corporation would experience little or no complications in launching the new brand due to the corporation's experience in manufacturing and bottling of carbonated drinks. The experience would give the corporation an effective launching strategy. About fitting within the portfolio, the new product will maintain the carbonate credentials of its parent product and all other components of the corporation's products, and this it would best fit the portfolio since it would be seen as an upgrade of Coke Zero which is already selling in the market. Therefore, with all the rational, the corporation should consider implementing the idea. Moreover, the selected target market is so wide as many economies have a good percentage of the aging population who would provide an ideal market for the product.

Target Market

A significant market gap exists between older and premium consumers. Thus a target market focusing on the late forties would be ideal for the new product. Moreover, the organization primarily aims to take the opportunity as aged people are being overlooked but have high disposable income. Old consumers remain a strong market segment that has not been exploited in reference to soft drink production (June-Hee Na, 2010). Research reveals that a target market of 40 years and above are believed to be vigilant and keen on soft drinks or beverages with healthy connotations (June-Hee Na, 2010). Therefore, the neew product would indeed be aligned to the target market needs and expectations and overall market trend of a healthier lifestyle.

Marketing/Launch Strategy

An ideal market launch strategy for Cokehealth would take into consideration such factors, including target market focus, quality, functionality, experience, priority, pricing, availability, and distribution channels (Watchravesringkan et al., 2019). Therefore, the corporation would incorporate the above checklist to ensure a successful launch. Notably, most of the checklists have already been discussed and will focus on the pricing and distribution channels. Since the product is an extension of Coke zero, the corporation should charge a slightly lower price than the parent product. Notably, the mode of distribution would influence consumer perception and behavior on the product and, thus, the corporation should use portable plastic bottles.

Conclusion

In sum, the implementation of this extension idea would enable coca-cola to compete favorably within the adult premium market. Notably, the major competitor in the premium adult's soft drink market is Shloer corporation, with a 29.3% market share of premium soft drinks (Watchravesringkan et al., 2019). However, Shloer actively targets a consumer within the age range of 15 to 35 years, (Watchravesringkan et al., 2019).

References

June-Hee Na. (2010). Brand extension strategy considering directionality of extension: Alignable difference vs. Nonalignable difference. Journal of Product Research, 28(4), 23-30. https://doi.org/10.36345/kacst.2010.28.4.003

Seltene, M., & Brunel, O. (2008). Brand extension: The moderating role of the category to which the brand extension is found. Journal of Product & Brand Management, 17(6), 393-402. https://doi.org/10.1108/10610420810904130

Tripodi, J. (2013). Coca-cola marketing shifts from impressions to expressions. Harvard Business Review. Retrieved August.

Watchravesringkan, K., Vogel, A., & Doraiswamy, D. (2019). Brand extension strategies: Consumer evaluations of brand concept and brand equity. Global Fashion Management Conference, 2019, 740-745. https://doi.org/10.15444/gfmc2019.07.04.01