{"id":7301,"date":"2016-09-29T17:34:54","date_gmt":"2016-09-29T17:34:54","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/masterybusiness2xngcxmasterspring2016\/?post_type=chapter&#038;p=7301"},"modified":"2024-05-07T16:14:48","modified_gmt":"2024-05-07T16:14:48","slug":"common-branding-strategies","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-introductiontobusiness\/chapter\/common-branding-strategies\/","title":{"raw":"Common Branding Strategies","rendered":"Common Branding Strategies"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Describe common branding strategies<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2>Managing Brands As Strategic Assets<\/h2>\r\nAs organizations establish and build strong brands, they\u00a0can pursue a number of strategies to continue developing\u00a0them and extending their value to stakeholders (customers, retailers, supply chain and distribution partners,\u00a0and of course the organization itself).\r\n<h2>Brand Ownership<\/h2>\r\n[caption id=\"attachment_7267\" align=\"alignright\" width=\"211\"]<img class=\"wp-image-7267 size-medium\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215047\/stevejobs-211x300.jpg\" alt=\"Steve Jobs\" width=\"211\" height=\"300\" \/> Steve Jobs, co-founder and long-time CEO of Apple[\/caption]\r\n\r\nWho \"owns\" the brand? The legal owner of a brand is generally the individual or entity in whose name the legal registration has been filed. Operationally speaking, brand ownership should be the responsibility of an organization's management and employees. Brand ownership is about building\u00a0and maintaining\u00a0a brand that reflects your principles and values. Brand <em>building<\/em> is about effectively persuading customers to believe in and purchase your product\u00a0or\u00a0service. Iconic brands, such as Apple and Disney, often have a history of visionary leaders who champion the brand, evangelize about it, and build it into the organizational culture and operations.\r\n<h2>Branding Strategies<\/h2>\r\nA branding strategy helps establish a product within the market and to build a brand that will grow and mature. Making smart branding decisions up front is crucial since a company may have to live with their decisions for a long time. The following are commonly used branding strategies:\r\n<h3>Branded House Strategy<\/h3>\r\nA \"branded house\" strategy (sometimes called a \"house brand\") uses a strong brand\u2014typically the company name\u2014as the identifying brand name for\u00a0a range of products (for example, Mercedes Benz or Black &amp; Decker) or a range of subsidiary brands (such as Cadbury Dairy Milk or Cadbury Fingers). Because the primary focus and investment is in a single, dominant \"house\" brand, this approach can be simpler and more cost-effective in the long run when it is well aligned with broader corporate strategy.\r\n\r\n[caption id=\"attachment_7268\" align=\"alignright\" width=\"150\"]<img class=\"wp-image-7268\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215049\/Kool_Aid_Man-262x300.jpeg\" alt=\"Kool-Aid Man\" width=\"150\" height=\"172\" \/> Modern Kool-Aid Man[\/caption]\r\n<h3>House of Brands Strategy<\/h3>\r\nWith the \"house of brands\" strategy, a company invests in building out a variety of individual, product-level brands. Each of these brands has a separate name and may not be associated with the parent company name at all. These brands may even be in de facto competition with\u00a0other brands from the same company. For example, Kool-Aid and Tang are two powdered beverage products, both owned by Kraft Foods. The \"house of brands\" strategy is well suited to companies that operate across many product categories at the same time.\u00a0It allows\u00a0greater flexibility to introduce a variety of different products, of differing quality, to be sold without confusing the consumer's perception of what business the company is in or diluting brand perceptions about products that target different tiers or types of consumers within the same product category.\r\n<h3>Private Label or Store Branding<\/h3>\r\nAlso called store branding, private-label\u00a0branding has\u00a0become increasingly popular. In cases where\u00a0the retailer has a particularly strong identity, the private label may be able to compete against even the strongest brand leaders and may outperform those products that are not otherwise strongly branded. The northeastern U.S. grocery chain Wegman's offers many grocery products that carry the Wegman's brand name. Meanwhile national grocery chain Safeway offers several different private label \"store\" brands: Safeway Select, Organics, Signature Cafe, and Primo Taglio, among others.[footnote]\"Our Brands.\" Safeway. Accessed June 25, 2019. <a href=\"http:\/\/www.safeway.com\/ShopStores\/Brands\/Our-Brands.page\" target=\"_blank\" rel=\"noopener\">http:\/\/www.safeway.com\/ShopStores\/Brands\/Our-Brands.page<\/a>.[\/footnote]<span style=\"color: #ff0000;\">\u00a0<\/span>\r\n<h3>\"No-Brand\" Branding<\/h3>\r\nA\u00a0number of companies successfully pursue \"no-brand\" strategies by creating packaging that imitates generic-brand simplicity. \"No brand\" branding can\u00a0be considered\u00a0a type of branding since\u00a0the product is made conspicuous by\u00a0the absence of a brand name. \"Tapa Amarilla\" or \"Yellow Cap\" in Venezuela during the 1980s is a prime example of no-brand strategy. It was recognized simply by the color of the cap of this cleaning products company.\r\n\r\n<img class=\"alignright wp-image-5106\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215059\/23718280462_c44944dd02_o.png\" alt=\"Sierra Club poster with a quote from John Muir who said &quot;The mountains are calling, and I must go.&quot;\" width=\"250\" height=\"250\" \/>\r\n<h3>Personal or Organization Brands<\/h3>\r\nPersonal and organizational branding are strategies for\u00a0developing a brand image and marketing engine around individual people or groups. Personal branding treats persons and their careers as products to be branded and sold to target audiences. Organizational branding promotes the mission, goals, and\/or work of the group being branded. The music and entertainment industries provide many examples of personal and organizational branding. From Justin Bieber to George Clooney to Kim Kardashian, virtually any celebrity today is a personal brand. Likewise, bands, orchestras, and other artistic groups typically\u00a0cultivate an organizational (or group) brand. Faith branding is a variant of this brand strategy, which treats religious figures and organizations as brands seeking to increase their following. Mission-driven organizations such\u00a0the Girl Scouts of America, the Sierra Club, the National Rifle Association (among millions of others) pursue organizational branding to expand their membership, resources, and impact.\r\n<h3>Place Branding<\/h3>\r\nThe developing fields of place branding and nation branding work on the assumption that places compete with other places to win over people, investment, tourism, economic development, and other resources. With this in mind, public administrators, civic leaders, and business groups may team up to \"brand\" and promote their city, region, or nation among target audiences. Depending on the goals they are trying to achieve,\u00a0targets for these marketing initiatives may be real-estate developers, employers and business investors, tourists and tour\/travel operators, and so forth. While place branding may focus on any given geographic area or destination,\u00a0nation branding aims to measure, build, and manage the reputation of countries.\r\n\r\nThe\u00a0city-state Singapore is an early, successful example of nation branding.\u00a0The edgy\u00a0Las Vegas \"What Happens Here, Stays Here\" campaign, shown in the following video, is a well-known example of place branding.\r\n\r\nhttps:\/\/www.youtube.com\/watch?v=BMTfNXfa0UA\r\n\r\nYou can view the\u00a0<a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Intro+to+Business\/Transcriptions\/WhatHappensHereStaysHereSketchbookCommercial_transcript.txt\" target=\"_blank\" rel=\"noopener\">transcript for \"What Happens Here, Stays Here\" (opens in new window)<\/a>\u00a0or the <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Intro+to+Business\/Transcriptions\/WhatHappensHereStaysHereSketchbookCommercial_alternative.txt\" target=\"_blank\" rel=\"noopener\">text alternative for \"What Happens Here, Stays Here\" (opens in new window)<\/a>.\r\n<h2>Co-Branding<\/h2>\r\nCo-branding is an arrangement in which two established brands collaborate\u00a0to offer a single product or service that carries both brand names. In these relationships, generally both parties contribute something of value to the new offering that neither would have been able to achieve independently. Effective co-branding builds on the complementary strengths of the existing brands. It can also allow each brand an entry point into markets in which\u00a0they would not otherwise be credible players.\r\n\r\nThe following are some examples of co-branded offerings:\r\n<ul>\r\n \t<li>Delta Airlines and American Express offer an entire family of co-branded credit cards; other airlines offer similar co-branded cards that offer customer rewards in terms of frequent flyer points and special offers.\r\n\r\n[caption id=\"attachment_5111\" align=\"alignright\" width=\"200\"]<img class=\"wp-image-5111\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215105\/1200px-Fiat_Barbie_500-1024x768.jpg\" alt=\"Fiat car\" width=\"200\" height=\"150\" \/> Fiat 500 \"Barbie\"[\/caption]<\/li>\r\n \t<li>Home furnishings company Pottery Barn and the paint manufacturer Benjamin Moore co-brand seasonal color palettes for home interior paints<\/li>\r\n \t<li>Fashion designer Liz Lange designs a ready-to-wear clothing line co-branded with and sold exclusively at Target stores<\/li>\r\n \t<li>Auto maker Fiat and toy maker Mattel teamed up to celebrate Barbie's fiftieth anniversary with the nail-polish-pink Fiat 500 Barbie car.<\/li>\r\n<\/ul>\r\nCo-branding is a common brand-building strategy, but it can present\u00a0difficulties. There is always risk around\u00a0how well the market will receive new offerings, and sometimes, despite the best-laid plans, co-branded offerings fall flat. Also, these arrangements often involve complex legal agreements that are difficult to implement. Co-branding relationships may be unevenly matched, with the partners having different visions for their collaboration, placing different priority on the importance of the co-branded venture, or one partner holding significantly more power than the other in determining how they work together. Because co-branding impacts the existing brands, the partners may struggle with how to protect their current brands while introducing something new and possibly\u00a0risky.\r\n<h2>Brand Licensing<\/h2>\r\n[caption id=\"attachment_5110\" align=\"alignright\" width=\"200\"]<img class=\"wp-image-5110\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215108\/Campbell_s%C2%AE___Star_Wars.jpg\" alt=\"A can of Campbells soup featuring a Star Wars stormtrooper\" width=\"200\" height=\"294\" \/> Campbell's \"Star Wars\" Soup. Source: http:\/\/www.campbells.com\/star-wars\/[\/caption]\r\n\r\nBrand licensing is the process of leasing or renting the right to use a brand in association with a product or set of products for a defined period and within a defined market, geography, or territory. Through a\u00a0licensing agreement, a firm (licensor) provides some tangible or intangible asset to another firm (licensee) and grants that firm the right to use the licensor's brand name and related brand assets in return for some payment. The licensee obtains a competitive advantage in this arrangement, while the licensor obtains inexpensive access to the market in question.\r\n\r\nLicensing can be extremely lucrative for the owner of the brand, as other organizations pay for permission to produce products carrying a licensed name. The Walt Disney Company was an early pioneer in brand licensing, and it remains a leader in this area with its wildly popular entertainment and toy brands: Star Wars, Disney Princesses, Toy Story, Mickey Mouse, and so on. Toy manufacturers, for example, pay millions of dollars and vie for the rights to produce and sell products affiliated with these \"super-brands.\"\r\n<h2>Line Extensions and Brand Extensions<\/h2>\r\nOrganizations use\u00a0line extensions and brand extensions\u00a0to leverage\u00a0and increase brand equity.\r\n\r\n[caption id=\"attachment_7269\" align=\"alignright\" width=\"128\"]<img class=\"wp-image-7269 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215110\/dietcokecan.jpg\" alt=\"a can of Diet Coke\" width=\"128\" height=\"230\" \/> Diet Coke is a line extension of the Coke brand.[\/caption]\r\n\r\nA company creates a <strong><em>line extension<\/em><\/strong> when it introduces a new variety of offering within the same product category. To illustrate with the food\u00a0industry, a company might add\u00a0new flavors, package sizes, nutritional content, or products containing special additives in line extensions. Line extensions aim to provide more variety and hopefully capture more of the market within\u00a0a given category. More than half of all new products introduced each year are line extensions. For example, M&amp;M candy varieties such as\u00a0peanut, pretzel, peanut butter, and dark chocolate are all line extensions of the M&amp;M brand. Diet Coke\u2122 is a line\u00a0extension of the parent brand Coke \u2122. While the products have distinct differences, they are in the same product category.\r\n\r\nA <em><strong>brand extension<\/strong>\u00a0<\/em>moves an existing\u00a0brand name into a new product category, with a new or somehow modified product. In this scenario, a company uses the strength of an established product to launch a product in a different category, hoping the popularity of the original brand will increase receptivity of the new product.\u00a0An example of a brand extension is the offering of Jell-O pudding pops in addition to the original product, Jell-O gelatin. This strategy increases awareness of the brand name and increases profitability from offerings in more than one product category.\r\n\r\nLine extensions and brand extensions are important tools for companies because they reduce financial risk associated with new-product development by leveraging the equity in the parent brand name to enhance consumers' perceptions and receptivity towards new products. Due to the established success of the parent brand, consumers will have instant recognition of the product name and be more likely to try the new line extension.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/96c57939-5138-4e81-8a75-0250d7ff8d02\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Describe common branding strategies<\/li>\n<\/ul>\n<\/div>\n<h2>Managing Brands As Strategic Assets<\/h2>\n<p>As organizations establish and build strong brands, they\u00a0can pursue a number of strategies to continue developing\u00a0them and extending their value to stakeholders (customers, retailers, supply chain and distribution partners,\u00a0and of course the organization itself).<\/p>\n<h2>Brand Ownership<\/h2>\n<div id=\"attachment_7267\" style=\"width: 221px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-7267\" class=\"wp-image-7267 size-medium\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215047\/stevejobs-211x300.jpg\" alt=\"Steve Jobs\" width=\"211\" height=\"300\" \/><\/p>\n<p id=\"caption-attachment-7267\" class=\"wp-caption-text\">Steve Jobs, co-founder and long-time CEO of Apple<\/p>\n<\/div>\n<p>Who &#8220;owns&#8221; the brand? The legal owner of a brand is generally the individual or entity in whose name the legal registration has been filed. Operationally speaking, brand ownership should be the responsibility of an organization&#8217;s management and employees. Brand ownership is about building\u00a0and maintaining\u00a0a brand that reflects your principles and values. Brand <em>building<\/em> is about effectively persuading customers to believe in and purchase your product\u00a0or\u00a0service. Iconic brands, such as Apple and Disney, often have a history of visionary leaders who champion the brand, evangelize about it, and build it into the organizational culture and operations.<\/p>\n<h2>Branding Strategies<\/h2>\n<p>A branding strategy helps establish a product within the market and to build a brand that will grow and mature. Making smart branding decisions up front is crucial since a company may have to live with their decisions for a long time. The following are commonly used branding strategies:<\/p>\n<h3>Branded House Strategy<\/h3>\n<p>A &#8220;branded house&#8221; strategy (sometimes called a &#8220;house brand&#8221;) uses a strong brand\u2014typically the company name\u2014as the identifying brand name for\u00a0a range of products (for example, Mercedes Benz or Black &amp; Decker) or a range of subsidiary brands (such as Cadbury Dairy Milk or Cadbury Fingers). Because the primary focus and investment is in a single, dominant &#8220;house&#8221; brand, this approach can be simpler and more cost-effective in the long run when it is well aligned with broader corporate strategy.<\/p>\n<div id=\"attachment_7268\" style=\"width: 160px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-7268\" class=\"wp-image-7268\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215049\/Kool_Aid_Man-262x300.jpeg\" alt=\"Kool-Aid Man\" width=\"150\" height=\"172\" \/><\/p>\n<p id=\"caption-attachment-7268\" class=\"wp-caption-text\">Modern Kool-Aid Man<\/p>\n<\/div>\n<h3>House of Brands Strategy<\/h3>\n<p>With the &#8220;house of brands&#8221; strategy, a company invests in building out a variety of individual, product-level brands. Each of these brands has a separate name and may not be associated with the parent company name at all. These brands may even be in de facto competition with\u00a0other brands from the same company. For example, Kool-Aid and Tang are two powdered beverage products, both owned by Kraft Foods. The &#8220;house of brands&#8221; strategy is well suited to companies that operate across many product categories at the same time.\u00a0It allows\u00a0greater flexibility to introduce a variety of different products, of differing quality, to be sold without confusing the consumer&#8217;s perception of what business the company is in or diluting brand perceptions about products that target different tiers or types of consumers within the same product category.<\/p>\n<h3>Private Label or Store Branding<\/h3>\n<p>Also called store branding, private-label\u00a0branding has\u00a0become increasingly popular. In cases where\u00a0the retailer has a particularly strong identity, the private label may be able to compete against even the strongest brand leaders and may outperform those products that are not otherwise strongly branded. The northeastern U.S. grocery chain Wegman&#8217;s offers many grocery products that carry the Wegman&#8217;s brand name. Meanwhile national grocery chain Safeway offers several different private label &#8220;store&#8221; brands: Safeway Select, Organics, Signature Cafe, and Primo Taglio, among others.<a class=\"footnote\" title=\"&quot;Our Brands.&quot; Safeway. Accessed June 25, 2019. http:\/\/www.safeway.com\/ShopStores\/Brands\/Our-Brands.page.\" id=\"return-footnote-7301-1\" href=\"#footnote-7301-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><span style=\"color: #ff0000;\">\u00a0<\/span><\/p>\n<h3>&#8220;No-Brand&#8221; Branding<\/h3>\n<p>A\u00a0number of companies successfully pursue &#8220;no-brand&#8221; strategies by creating packaging that imitates generic-brand simplicity. &#8220;No brand&#8221; branding can\u00a0be considered\u00a0a type of branding since\u00a0the product is made conspicuous by\u00a0the absence of a brand name. &#8220;Tapa Amarilla&#8221; or &#8220;Yellow Cap&#8221; in Venezuela during the 1980s is a prime example of no-brand strategy. It was recognized simply by the color of the cap of this cleaning products company.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-5106\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215059\/23718280462_c44944dd02_o.png\" alt=\"Sierra Club poster with a quote from John Muir who said &quot;The mountains are calling, and I must go.&quot;\" width=\"250\" height=\"250\" \/><\/p>\n<h3>Personal or Organization Brands<\/h3>\n<p>Personal and organizational branding are strategies for\u00a0developing a brand image and marketing engine around individual people or groups. Personal branding treats persons and their careers as products to be branded and sold to target audiences. Organizational branding promotes the mission, goals, and\/or work of the group being branded. The music and entertainment industries provide many examples of personal and organizational branding. From Justin Bieber to George Clooney to Kim Kardashian, virtually any celebrity today is a personal brand. Likewise, bands, orchestras, and other artistic groups typically\u00a0cultivate an organizational (or group) brand. Faith branding is a variant of this brand strategy, which treats religious figures and organizations as brands seeking to increase their following. Mission-driven organizations such\u00a0the Girl Scouts of America, the Sierra Club, the National Rifle Association (among millions of others) pursue organizational branding to expand their membership, resources, and impact.<\/p>\n<h3>Place Branding<\/h3>\n<p>The developing fields of place branding and nation branding work on the assumption that places compete with other places to win over people, investment, tourism, economic development, and other resources. With this in mind, public administrators, civic leaders, and business groups may team up to &#8220;brand&#8221; and promote their city, region, or nation among target audiences. Depending on the goals they are trying to achieve,\u00a0targets for these marketing initiatives may be real-estate developers, employers and business investors, tourists and tour\/travel operators, and so forth. While place branding may focus on any given geographic area or destination,\u00a0nation branding aims to measure, build, and manage the reputation of countries.<\/p>\n<p>The\u00a0city-state Singapore is an early, successful example of nation branding.\u00a0The edgy\u00a0Las Vegas &#8220;What Happens Here, Stays Here&#8221; campaign, shown in the following video, is a well-known example of place branding.<\/p>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"What Happens Here, Stays Here - Sketchbook - Las Vegas - Unravel Travel TV\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/BMTfNXfa0UA?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>You can view the\u00a0<a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Intro+to+Business\/Transcriptions\/WhatHappensHereStaysHereSketchbookCommercial_transcript.txt\" target=\"_blank\" rel=\"noopener\">transcript for &#8220;What Happens Here, Stays Here&#8221; (opens in new window)<\/a>\u00a0or the <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Intro+to+Business\/Transcriptions\/WhatHappensHereStaysHereSketchbookCommercial_alternative.txt\" target=\"_blank\" rel=\"noopener\">text alternative for &#8220;What Happens Here, Stays Here&#8221; (opens in new window)<\/a>.<\/p>\n<h2>Co-Branding<\/h2>\n<p>Co-branding is an arrangement in which two established brands collaborate\u00a0to offer a single product or service that carries both brand names. In these relationships, generally both parties contribute something of value to the new offering that neither would have been able to achieve independently. Effective co-branding builds on the complementary strengths of the existing brands. It can also allow each brand an entry point into markets in which\u00a0they would not otherwise be credible players.<\/p>\n<p>The following are some examples of co-branded offerings:<\/p>\n<ul>\n<li>Delta Airlines and American Express offer an entire family of co-branded credit cards; other airlines offer similar co-branded cards that offer customer rewards in terms of frequent flyer points and special offers.\n<div id=\"attachment_5111\" style=\"width: 210px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-5111\" class=\"wp-image-5111\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215105\/1200px-Fiat_Barbie_500-1024x768.jpg\" alt=\"Fiat car\" width=\"200\" height=\"150\" \/><\/p>\n<p id=\"caption-attachment-5111\" class=\"wp-caption-text\">Fiat 500 &#8220;Barbie&#8221;<\/p>\n<\/div>\n<\/li>\n<li>Home furnishings company Pottery Barn and the paint manufacturer Benjamin Moore co-brand seasonal color palettes for home interior paints<\/li>\n<li>Fashion designer Liz Lange designs a ready-to-wear clothing line co-branded with and sold exclusively at Target stores<\/li>\n<li>Auto maker Fiat and toy maker Mattel teamed up to celebrate Barbie&#8217;s fiftieth anniversary with the nail-polish-pink Fiat 500 Barbie car.<\/li>\n<\/ul>\n<p>Co-branding is a common brand-building strategy, but it can present\u00a0difficulties. There is always risk around\u00a0how well the market will receive new offerings, and sometimes, despite the best-laid plans, co-branded offerings fall flat. Also, these arrangements often involve complex legal agreements that are difficult to implement. Co-branding relationships may be unevenly matched, with the partners having different visions for their collaboration, placing different priority on the importance of the co-branded venture, or one partner holding significantly more power than the other in determining how they work together. Because co-branding impacts the existing brands, the partners may struggle with how to protect their current brands while introducing something new and possibly\u00a0risky.<\/p>\n<h2>Brand Licensing<\/h2>\n<div id=\"attachment_5110\" style=\"width: 210px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-5110\" class=\"wp-image-5110\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215108\/Campbell_s%C2%AE___Star_Wars.jpg\" alt=\"A can of Campbells soup featuring a Star Wars stormtrooper\" width=\"200\" height=\"294\" \/><\/p>\n<p id=\"caption-attachment-5110\" class=\"wp-caption-text\">Campbell&#8217;s &#8220;Star Wars&#8221; Soup. Source: http:\/\/www.campbells.com\/star-wars\/<\/p>\n<\/div>\n<p>Brand licensing is the process of leasing or renting the right to use a brand in association with a product or set of products for a defined period and within a defined market, geography, or territory. Through a\u00a0licensing agreement, a firm (licensor) provides some tangible or intangible asset to another firm (licensee) and grants that firm the right to use the licensor&#8217;s brand name and related brand assets in return for some payment. The licensee obtains a competitive advantage in this arrangement, while the licensor obtains inexpensive access to the market in question.<\/p>\n<p>Licensing can be extremely lucrative for the owner of the brand, as other organizations pay for permission to produce products carrying a licensed name. The Walt Disney Company was an early pioneer in brand licensing, and it remains a leader in this area with its wildly popular entertainment and toy brands: Star Wars, Disney Princesses, Toy Story, Mickey Mouse, and so on. Toy manufacturers, for example, pay millions of dollars and vie for the rights to produce and sell products affiliated with these &#8220;super-brands.&#8221;<\/p>\n<h2>Line Extensions and Brand Extensions<\/h2>\n<p>Organizations use\u00a0line extensions and brand extensions\u00a0to leverage\u00a0and increase brand equity.<\/p>\n<div id=\"attachment_7269\" style=\"width: 138px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-7269\" class=\"wp-image-7269 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/09\/23215110\/dietcokecan.jpg\" alt=\"a can of Diet Coke\" width=\"128\" height=\"230\" \/><\/p>\n<p id=\"caption-attachment-7269\" class=\"wp-caption-text\">Diet Coke is a line extension of the Coke brand.<\/p>\n<\/div>\n<p>A company creates a <strong><em>line extension<\/em><\/strong> when it introduces a new variety of offering within the same product category. To illustrate with the food\u00a0industry, a company might add\u00a0new flavors, package sizes, nutritional content, or products containing special additives in line extensions. Line extensions aim to provide more variety and hopefully capture more of the market within\u00a0a given category. More than half of all new products introduced each year are line extensions. For example, M&amp;M candy varieties such as\u00a0peanut, pretzel, peanut butter, and dark chocolate are all line extensions of the M&amp;M brand. Diet Coke\u2122 is a line\u00a0extension of the parent brand Coke \u2122. While the products have distinct differences, they are in the same product category.<\/p>\n<p>A <em><strong>brand extension<\/strong>\u00a0<\/em>moves an existing\u00a0brand name into a new product category, with a new or somehow modified product. In this scenario, a company uses the strength of an established product to launch a product in a different category, hoping the popularity of the original brand will increase receptivity of the new product.\u00a0An example of a brand extension is the offering of Jell-O pudding pops in addition to the original product, Jell-O gelatin. This strategy increases awareness of the brand name and increases profitability from offerings in more than one product category.<\/p>\n<p>Line extensions and brand extensions are important tools for companies because they reduce financial risk associated with new-product development by leveraging the equity in the parent brand name to enhance consumers&#8217; perceptions and receptivity towards new products. Due to the established success of the parent brand, consumers will have instant recognition of the product name and be more likely to try the new line extension.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"assessment_practice_96c57939-5138-4e81-8a75-0250d7ff8d02\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/96c57939-5138-4e81-8a75-0250d7ff8d02?iframe_resize_id=assessment_practice_id_96c57939-5138-4e81-8a75-0250d7ff8d02\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-7301\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Revision and adaptation. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>Practice Question. <strong>Authored by<\/strong>: Robert Danielson. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Branding. <strong>Authored by<\/strong>: Linda Williams and Lumen Learning. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/courses.candelalearning.com\/masterybusiness2xngcxmasterfall2015\/chapter\/reading-branding-labeling-and-packaging\/\">https:\/\/courses.candelalearning.com\/masterybusiness2xngcxmasterfall2015\/chapter\/reading-branding-labeling-and-packaging\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><li>Image: Steve Jobs. <strong>Authored by<\/strong>: Steve Jurvetson. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/en.wikipedia.org\/wiki\/Steve_Jobs#\/media\/File:Steve_Jobs_with_red_shawl_edit2.jpg\">https:\/\/en.wikipedia.org\/wiki\/Steve_Jobs#\/media\/File:Steve_Jobs_with_red_shawl_edit2.jpg<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Image: Outings Sierra Club GA. <strong>Provided by<\/strong>: Sierra Club GA. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.flickr.com\/photos\/gasierraclub\/23718280462\/\">https:\/\/www.flickr.com\/photos\/gasierraclub\/23718280462\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc\/4.0\/\">CC BY-NC: Attribution-NonCommercial<\/a><\/em><\/li><li>Image: Fiat 500 Barbie. <strong>Authored by<\/strong>: Xavigivax. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/es.wikipedia.org\/wiki\/Fiat_500_Barbie#\/media\/File:Fiat_Barbie_500.jpg\">https:\/\/es.wikipedia.org\/wiki\/Fiat_500_Barbie#\/media\/File:Fiat_Barbie_500.jpg<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/\">CC BY-SA: Attribution-ShareAlike<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">All rights reserved content<\/div><ul class=\"citation-list\"><li>Image: Kool-Aid Man. <strong>Provided by<\/strong>: Kraft Foods. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/en.wikipedia.org\/wiki\/File:Kool_Aid_Man.jpeg\">https:\/\/en.wikipedia.org\/wiki\/File:Kool_Aid_Man.jpeg<\/a>. <strong>License<\/strong>: <em>All Rights Reserved<\/em>. <strong>License Terms<\/strong>: Fair use under U.S. copyright law<\/li><li>Image: Campbell&#039;s Star Wars Soup. <strong>Provided by<\/strong>: Campbell&#039;s Soup Company. <strong>License<\/strong>: <em>All Rights Reserved<\/em>. <strong>License Terms<\/strong>: Fair use under U.S. copyright law<\/li><li>What Happens Here, Stays Here - Sketchbook Commercial. <strong>Authored by<\/strong>: Visit Las Vegas. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?v=BMTfNXfa0UA\">https:\/\/www.youtube.com\/watch?v=BMTfNXfa0UA<\/a>. <strong>License<\/strong>: <em>All Rights Reserved<\/em>. <strong>License Terms<\/strong>: Standard YouTube license<\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">Public domain content<\/div><ul class=\"citation-list\"><li>Image: Diet Coke. <strong>Provided by<\/strong>: Wikimedia. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/commons.wikimedia.org\/wiki\/File:Diet-Coke-Can.jpg\">https:\/\/commons.wikimedia.org\/wiki\/File:Diet-Coke-Can.jpg<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/pdm\">Public Domain: No Known Copyright<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-7301-1\">\"Our Brands.\" Safeway. Accessed June 25, 2019. <a href=\"http:\/\/www.safeway.com\/ShopStores\/Brands\/Our-Brands.page\" target=\"_blank\" rel=\"noopener\">http:\/\/www.safeway.com\/ShopStores\/Brands\/Our-Brands.page<\/a>. <a href=\"#return-footnote-7301-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":26,"menu_order":6,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Branding\",\"author\":\"Linda Williams and Lumen Learning\",\"organization\":\"\",\"url\":\"https:\/\/courses.candelalearning.com\/masterybusiness2xngcxmasterfall2015\/chapter\/reading-branding-labeling-and-packaging\/\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Revision and adaptation\",\"author\":\"\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Image: Steve Jobs\",\"author\":\"Steve Jurvetson\",\"organization\":\"\",\"url\":\"https:\/\/en.wikipedia.org\/wiki\/Steve_Jobs#\/media\/File:Steve_Jobs_with_red_shawl_edit2.jpg\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"copyrighted_video\",\"description\":\"Image: Kool-Aid Man\",\"author\":\"\",\"organization\":\"Kraft Foods\",\"url\":\"https:\/\/en.wikipedia.org\/wiki\/File:Kool_Aid_Man.jpeg\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Fair use under U.S. copyright law\"},{\"type\":\"cc\",\"description\":\"Image: Outings Sierra Club GA\",\"author\":\"\",\"organization\":\"Sierra Club GA\",\"url\":\"https:\/\/www.flickr.com\/photos\/gasierraclub\/23718280462\/\",\"project\":\"\",\"license\":\"cc-by-nc\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Image: Fiat 500 Barbie\",\"author\":\"Xavigivax\",\"organization\":\"\",\"url\":\"https:\/\/es.wikipedia.org\/wiki\/Fiat_500_Barbie#\/media\/File:Fiat_Barbie_500.jpg\",\"project\":\"\",\"license\":\"cc-by-sa\",\"license_terms\":\"\"},{\"type\":\"copyrighted_video\",\"description\":\"Image: Campbell\\'s Star Wars Soup\",\"author\":\"\",\"organization\":\"Campbell\\'s Soup Company\",\"url\":\"\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Fair use under U.S. copyright law\"},{\"type\":\"copyrighted_video\",\"description\":\"What Happens Here, Stays Here - 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