Brand Extension - Coca-Cola - Essay Example

The new product will be a soft drink and it will have to share a name with Coke, for example, giving it a brand name meal coke. The product will be sharing the same similarities with Coke because it will be in the same category of soft drinks. I will have to use this strategy due to the brand loyalty Coke enjoys among the consumers, Coke is also far much better in terms of its awareness. This new product will appeal more to consumers because it has a brand name that has been tried and tested by consumers.

There are also a few risks associated with Coke, it enjoys consumers’ confidence and this will help reduce the risks perceptions of the new product by the customers (Chien & Moutinho, 2007). In modern days, there are new products that are introduced into the market only to be declared unsafe for consumption a few days later and this has created a negative perception of new products by consumers. The new strategy therefore for branding the new soft drink “meal coke” will sort out the negative perception by consumers because they attach no risk to Coke.

This implies that the market is already taken care of because the consumers will be receiving products they have already tested and Coca-Cola is catered for as they can increase their product portfolio and they have more control over the market they are going to perform in. Because in fact, consumers will associate the new product with the parent product, they will also associate the quality of the new one with the core product.

Choosing Coke which already enjoys loyalty in the market, will help reduce the cost of having to market the new product through advertisement, I can be able to share the distribution channels that Coke currently use and this will help reach more customers within a very short time rather than going for unknown names, like "meal soon", "soft meal" and "meal" as they are likely to fail as an entrepreneur. I have to transition to using extensions of familiar names.

If a customer already knows and enjoys the Absolute taste and goodness of Coke, then he/she will more likely try out Absolute new meal coke in their quest for new soft drinks. Good, well-targeted extensions can only help widen the reach of any particular brand rather than dilute it. Since Coke has been dominant in the field with a high preference rate from consumers, by introducing a new product with the same brand, consumers will now be seeking a variety of Coke (Kapferer, 2008). Packaging and labeling will also become much easier as precedence has already been set by the parent company. The cost of introducing a new product will be highly reduced and one will save the demand of having to come up with programs to follow up the new product in the market.

Conclusion
In the past, firms used to introduce new products into the market using the brand extension tactic so that their products can pick up in the markets very quickly, they aim to increase their sales within the first few days of introduction to the market (Kapferer, 2008). Introducing a new product in the market consumes a lot of time and it needs a huge budget to help sell to the people and talk to them about the benefit of a new product. Brand extension is one of the latest product development tactics which can scale down on the risks because the name will facilitate consumers' perception because of the parent brand equity.

Despite all benefits associated with brand extension, it also has some risks associated with it resulting in a severely damaged parent product image. Unwell calculated move in product extension may damage and deteriorate the parent brand and in extension affecting negatively the brand capital. A number of the writings and theories as well as documentation focus on the positive aspects of brand extensions. In reality, the pitfalls associated with brand extension are far much more than their best. Brand extension can damage the parent product immensely. Brand extension sometimes brings good with it but sometimes it also brings damages to the parent product. Read More