conditions of severe competition, even quite well-known enterprises face a
rather difficult task: how to retain their positions in the market and maintain
their efficiency. Usually the management of organizations carries out a number
of activities to increase market share, reduce costs in order to implement
price competition, and many others. But often this is not enough to survive (Clifton,
R. and Ahmad, 2009).
experts are increasingly inclined to the conclusion that the main factor in the
success of most enterprises is the loyalty of consumers (Kotler, 2009). This
notion appeared not so long ago in our country, but has already won the
interest of many. The highest degree of loyalty of consumers is an almost
fanatical veneration of the brand.
product when it appears on the market creates an impression of itself –
positive or negative, it appears inevitable, as soon as the consumer learns
about the product. These associations, the perception of the goods by the
consumer, are called the brand (Pizam, Oh, 2012).
brand is an impression of a product in the minds of consumers, a label that is
mentally pasted onto a product (Davis, 2009). The process of creating a brand
and managing it is called branding. It can include the creation, strengthening,
repositioning, updating and changing the stage of development of the brand, its
expansion and deepening.
are methods of creating a special impression, which contribute to the overall
image and the relation of the target market segment to the brand. At any given
moment, any brand has a certain image – a unique set of associations that are
currently in the minds of consumers (Wheeler, 2003). These associations express
what the brand means right now, and are a momentary promise to consumers from the
authors of the brand.
this research will be discussed the potential risks and issues that can occur
during the process of the brand extension. As an example will be taken an
imaginary company – brand extension of Universal Studios Moscow – Movie Suites hotel complex.
POTENTIAL RISKS FOR THE BRAND EXTENSION
Developing a brand for a product or product line can
be associated with a number of problems:
managers sometimes limit their area of ??responsibility to financial and
marketing goals, and miss the strategic vision of the brand, leaving it in the
competence of exclusively senior management.
certain danger lies in concentrating on short-term tactical goals, while they
must be just milestones towards a strategic goal.
mentioned problems can occur due to the fact that management is not provided
with the necessary information on the strategic development of the firm.
it is difficult to express the corporate values ??in a single brand. It is easy
to track changes in the value of shares, it is more difficult to understand
which product or categories the shares owe their dynamics.
a large company with many brands, it may happen that the goals of some brands
will go against the goals of others or, even harder, with the objectives of the
managers sometimes set goals that will only maximize the effectiveness of their
department, not the entire firm.
are sometimes criticized in social networks and other “popular” media
– the brand manager must monitor, record and respond to these processes.
working with sub-brands, the question arises whether individual characteristics
of a particular product will be perceived by consumers as belonging to all
product lines. In other words, is there a danger that the consumer will form
his opinion, relying on the latest low-cost model that has entered the market (Kotler, Bowen and Makens, 2013). As practice shows, this depends first of all on what the main idea
bears in itself a brand. For Universal Studios the main association are: fun
for the whole family, memorable experience and special event destination (Sengupta,
2007). The hotel complex shares the same attributes, however, it has some of
its own: lavishness, comfort, unique hospitality experience, relaxation. That
is why in promotion these qualities of the hotel must be mentioned as well so
the guests don’t create the wrong image about the hotel complex.
pitfall when working with brands is the brand image. Image, some momentary
impression of the brand, can turn into its essence, individuality (Ries and
Ries, 2014). The problem is that the image is oriented to a specific situation
on the market that has developed precisely today.
a unique brand is more than just recognizing what the users want (Anholt, 2003). Uniqueness must also reflect the “soul”
and vision of the brand, anticipate what consumers will then like. This set of
basic characteristics should remain unchanged for a long time, only then the
company has the opportunity to create a really strong brand.
hotel complex Movie Suites shares the
same target market as a Universal Studios, however, the expectations from both
brands are different (Dev, 2012). Some people
want their vacation to be the great fun, but still the most unforgettable
experience they will receive after a long day in the park laying in a big bed
and enjoying comfort and hospitality at its finest. The hotel complex doesn’t
only conclude the day spent at the Studios, it gives a customer a different
point of view on what a good vacation is – relaxing, calm, lavish. That’s why
it is assumed that the hotel complex will be a “cherry on top” in the
Universal Studios experience and will give customers even more pleasant
individuality of the brand is not only and not so much the characteristics of
the product as the associations and symbols associated with the brand (Ramesh Kumar, 2009). So, an expensive car is not only safety, comfort and
speed, but also prestige, belonging to a certain social stratum. Methods for
promoting the brand – how to sponsor an event, how to use advertising media –
should be chosen precisely on the basis of the individuality of the brand (that
is, ownership of this car is prestigious and means belonging to a particular
of the conditions for the existence of an effective brand is its constant
adjustment, clarification within the company itself (Hasanali, Leavitt, and
Williams, 2005). However, it is difficult to expect employees of any vision of
the brand, if they do not understand it. This happens when the company is no
longer aware of the role that the individuality of the brand can play in the formation
of the company’s core values ??and goals. Companies wishing to have a strong
and sustainable brand should constantly maintain a sense of brand value in the
minds of their employees.
successful, strong brand is the real treasure the company owns. Like any
treasure, it can be assessed, although the evaluation process is hampered by
the “immateriality” of the brand. Approaches to the evaluation of the
brand have been developed quite a lot, but they are still not completely
settled(De Chernatony, McDonald, 2011).
might be another risk considering brand extension – the brand laziness. The Universal Studious is a successful brand itself, that’s why the
marketing team might not pay enough attention to the promotion of its extension
(Hansen, Christensen, 2005). It can cause the loss of control over the new
brand and damage the reputation and image of already existing brand. Marketing
specialists must work on both promotion campaigns with the same quality and
good attitude, so that a positive result is achieved.
extension usually works great for the whole company. An example of successful
brand extension from the industry can be
Disney. It was founded in 1920 as a cartoon studio. In the 1950s, the company
built the first Disneyland and launched a television show with the same name.
After the opening of new Disneyland in Florida, Paris and Japan, a network of
branded shops, resorts and the purchase of a cruise ship, the Disney brand
produces, in D. Aaker’s opinion, an impression much stronger than that arising
from the simple viewing of cartoons. Thanks to such a powerful brand, Disney
Channel can be considered one of the best TV channels among all existing in
America (along with CNN, MTV and some others) (Anholt, 2000).
for the success of the expansion – the company knew from the very beginning
what it is: “Magic entertainment for all family members.” Everything
that the company does strengthens this idea. But when the company started, for
example, the production of adult films, it did not take advantage of the
existing brand, but created new ones – Touchstone and Miramax.
So, following the similar strategy
Universal Studios can create even more valuable brand extensions.