Impact of Brand Extensions

Impact of Brand Extensions Launching brand extensions are a bit like having kids just because you can doesnt mean you should. But if the conditions are right, and everything is thoroughly prepared and though through, then it can be terrifically rewarding Rory Sutherland, Creative Director, Ogilvy One, as cited in (Miller Muir, 2004). Initially, brand extensions begun in the luxury goods industry, when the French haute couture fashion houses started diversifying to jewelry, watches, cosmetics and accessories. In 1921, French luxury fashion house Chanel launched its first perfume, Chanel nÂÂ °5 and it remains until now one of the best-selling perfume in the world, enhancing the luxury reputation of the brand. In the last few years, many luxury fashion houses have launched new ventures in order to expand their recognizability outside their usual area of activities; i.e., clothing, cosmetics and accessories. This process initiated by evolving to new spaces such as hotels, bars, or restaurants where people can experience a special mood; often in strict relationship with the philosophy of the brand. With the success of many luxury brands entering the hospitality industry such as Bulgari, Versace, this research paper seeks to analyze Guccis brand extension and advise the head of directors on the impacts of extending to the hospitality business. Founded in the 1920s, Gucci has become one of the worlds leading luxury fashion brands. With a renowned reputation for design, quality and Italian traditional expertise, the brand offers a wide range of products (clothing, handbags, shoes, timepieces, jewelry and skis). Gucci covers all aspects of product launching, from designing, through manufacturing , and distribution. (Kering, 2013) In the study of the arguments for and against, the researcher will examine brands that have intended this diversification earlier to get an indication of the impacts of undertaking such a project. The key strategy used to examine the outcomes of progressing the Gucci group into the hospitality industry is the Brand extension strategy (Aaker Keller, 1990, pp. 27-41); that the researcher will enhance by applying the Categorization theory (Smith Medin, 1981). Furthermore, previous examples of failure or success of brand diversification will be discussed as in essential to avoid pitfalls and has an influence on the decision. Among these examples, the Golden Arch Hotel, case of McDonalds extends to the hospitality industry. In order to better conduct the research, the major first step is to clearly define the research aims and objectives. The Aim is what the paper wants to achieve depending on the business question, while the Objectives distinguish how the aim is going to be achieved (Manchester Metropolitan University, 2008). The next section will focus on both parts so as to build the structure and serve as a guiding line for the rest of this essay. Aim Objectives Aim This research project aims to analyze whether a luxury brand such as the Gucci group, should extend their products and services into the hotel industry in order to follow the path previously experienced by the Armani group in Dubai. Objectives To determine if the brand extension strategy successively fits the group; if it is compatible with the core brand and company goals, as diversification can enable a business to access new revenue streams. What is Brand extension theory? The conceptual model Does it apply to the Gucci Group? What are the costs of such a process? What are the benefits and limitations? What are the competitors? (SWOT Analysis) To critically review if the Italian lifestyle and the prestige of Italian fashion industry constitute important elements of cultural heritage that can be productively employed in the fields of leisure and hospitality marketing. Does the brand equity apply to the Hospitality Industry? What variables influence consumers perceptions about the acceptability of brand extensions? How similarity and consumer innovativeness may affect the brand? To analyze whether brand extension strategy is a proper tool to keep the brand up to date whilst the organization adapt to market changes. Does extending to the hospitality industry risk making it lose its relevance and appeal? Is the brand strong enough to guarantee successful brand extension? (Case study of McDonalds adventure in the hotel industry) Will it improve overall brand image or damage brand identity? Literature review Brand Extension Strategy The original definition of a brand, as cited by Aaker, is a distinguishing name and/or symbol (such as a logo, motto, package design or trademark) intended to identify the goods or services of one seller, and to differentiate those goods or services from those of the competition (Aaker Keller, 1990). A brand extension is defined when a company uses an existing brand name to introduce a new product (Vukasovic, 2012), as well as, when an existing brand is combined with a new brand when introducing a new product (Keller, 2008). Consumer Behavior Seminar, regrouping a number of contributors, first introduced brand extension in 1987. They were trying to understand how consumers extend prior associations about a companys brands to new products offered by the same firm (Boush, et al., 1987). Nowadays, brand extensions might be one of the most researched and impacting areas of marketing (Elliott Percy, 2007). Brand extension is considered to be the most attractive marketing strategy; indeed, it enables to reduce the launching cost of introducing new products by compensating with the consumers perception and awareness of the parent brand (Lassar, Mittal, Sharma, 1995). Therefore, a successful brand extension will allow manufacturers to take advantage from this by gaining a higher expectation in the consumers mind and hold more shelf space for their brands. It has also been determined that the least quality variation in product diversification is likely to gain more consumers than when the product lines are distinguishable (Lassar, Mittal, Sharma, 1995). The implementation of this strategy will result in lower advertising costs for the extended brand as well as higher sales because of the knowledge experience of the brand. Nonetheless, numerous researchers agreed that luxury brand extensions have been left behind. Even though the luxury brands were the first to initiate brand extensions by extending their haute couture brand to accessories, cosmetics, watches and jewelry, and though brand extensions are the essence of an organization model of the luxury haute couture brands (Uggla Lashgari, 2012), yet the main researchers that were conducted were either relating about a non luxury brand or a venture between a luxury and a non-luxury brand, which has some particular limitations (Stankeviciute Hoffmann, 2011). Previous findings on the impact of brand extensions on the luxury parent brand will be introduced, followed by a focus on the categorization theory and a self-created conceptual model. The Impact of Brand Extensions on the Luxury Parent Brand It has been proven that luxury brands may be compromising their reputation while diversifying and targeting a wider market share. We record well-known luxury brand Pierre Cardin who fall into every consumers reach goods by using his notoriety in marketing a commercial quality of hundreds of products. This can be understood by high quality non-personal needs when customers wish to buy products, not available to a broader public (Dubois Paternault, 1995). In order to strengthen the core luxury brand image of the parent brand, luxury brand extensions are often attempted, thus, the relationship between consumers and the luxury brand must be strengthened. In a study in 1995, Elyette Roux intended to measure the impact of luxury brand extensions on the parent brand image through brand prestige, brand confidence and desirability (Roux, Consumer Evaluation of Luxury Brand Extensions, 1995). In order to do so, Roux predicted that she could use conceptual fit, transferability, and perceived quality of original brand as variables. The results proved that brand confidence is only influenced by the conceptual fit approach. Thus, only luxury brand extensions that are in strict correlation to the build brand confidence and the parent luxury brands expertise will have a positive outcome on the parent brand. If extensions are uncertain, brand image dilution will happen due to brand confidence decrease. Brand prestige is mainly anticipated by brand quality and conceptual fit. On a lower extend, transferability contributes in a significant way to brand prestige. Only acknowledged luxury brand extensions will enrich brand prestige, assuming the luxury brand possesses the ability to substitute its credentials and has quality reputation. Luxury brand extensions are facing many challenges to extend target markets (Dubois Paternault, 1995). The aim is to increase consumers need for this specific brand. Brand perceived quality and conceptual fit are the main predictors for desirability. The decrease of brand desirability will harm the luxury brand image. People devoting to buy luxury brands for pretention motives, will remove their demand off these brands. Globally, the results proved that brand prestige; brand confidence and brand desirability are significantly linked with the nature of luxury brand extensions (Boush, et al., 1987). In 1996, Roux went a step further, expanding the study on the impact of brand extensions on a luxury fashion brands confidence, prestige and desirability balanced by the use of consumers knowledge level. The hypothesis was not supported, it involved that more knowledgeable people would give the parent brand elements more extreme evaluations. This hypothesis approves that consumers are attracted to buy luxury fashion brands because of their emotional benefit and image influence. Furthermore, the study states that brand prestige; desirability and confidence, when used as purchase intention variables, have no relationship among each other. (Roux Boush, The Role of Familiarity and Expertise in Luxury Brand Extension, 1996). The Categorization Theory Categorization enables a large variety of subordinate functions because classifying something as a category member grants people to bring their knowledge of the category to focus on the new entrant (Smith Medin, 1981). The step in which any cylindrical object is determined as a flashlight allows you to understand the Categorization theory. Therefore, people trend to predict its parts, trace its functions, and presume its behavior (Cheah Phau, 2008). Once people have categorized some new entity, for example, they may be using suitable knowledge for prediction and acceptation. For example, you can easily assume that the cylindrical object set as a flashlight will have one battery at least, will have some kind of interrupter, and will basically produce a beam of light when the switch is pressed. People do not only categorize to accept new market entrants, they also use the new entities to modify and update their concepts. In a nutshell, categorization supports learning (Medin Rips, 2 005). The Conceptual Model This conceptual model was proposed by the researcher in order to better understand the impact of brand extensions on the parent brand equity of luxury brands. As brand extension affects the four outcomes, these interact in a certain way. Figure : The impact of brand extension

Letter to child about personal success Essay

I am writing this letter in a hope that we will meet one day in the future. At this state I am a seventeen year old high school student. I have been given an assignment to write to my future child about personal success. To let you know right here at the beginning of my letter, I really believe that being a good parent is a sign of personal success. At this point I am not sure if I want to have a boy or a girl but I am certain that I have every intention of being a pillar of strength and support for my child. I know some people in their thirties that do not want to have children and I must say that I admire them for recognizing that parenting is not what they desire in their life. Do not let this contradiction confuse you. Knowing yourself and accepting yourself is a great success! As a seventeen year old teenager it is not easy to write about success especially to a future child. My values and beliefs may change in the process of growing up – however I will try to honestly and truthfully describe my idea of being successful in life. I am convinced that first step to personal success takes place in your thought. It is important to believe in yourself and decide what important things that you desire are. My mom was determined to put a writing on the wall in my room that spells â€Å"go confidentially in the direction of your dreams†. She says that only limits to your dreams are those that you place in your mind. The more I think about it the more I agree. When I look at myself in the mirror I realise that the person staring back at me is the only person responsible for my personal success. I need to figure out my desires and learn to visualize them and work hard on developing plans how to achieve my desires. I have to fill my mind with positive thoughts and give my self-affirmation. This sounds very easy but let me tell you something my child, it is very complicated. Especially for a seventeen year old who changes his mind about everything quite frequently including his desires. All of us want to succeed in life, to accomplish something, to feel that we â€Å"won†. Some people see success in having a loving family, others in having a job that pays a six figure salary. Some people see success in stuff they own. At this point you are probably wondering what success means to me. A big bank balance might be nice to look at but I believe that it can never replace the love of family and friends or the sense of satisfaction gained by doing the work you enjoy doing. I believe that there is no single definition of personal success. Success is about living your best life and only you can say what that means. Defining personal success is up to you my child. I have intention of reading you this letter once you are my age. I honestly hope that my definition of success will not change since I am quite proud of my idea of success right now. So, my advice to you is to be open, honest, and true to yourself. Find what motivate you and go boldly after your desires. Your loving father, Name

Treatments Of Alcoholism Essay - 1826 Words

Treatments of Alcoholism Alcoholism can destroy the life of an alcoholic and devastate the alcoholics family. But it also has overwhelming consequences for society. Consider these statistics from the National Council on Alcoholism and Drug Dependence: *In 1988, alcoholism and problems related to it nbsp;nbsp;nbsp;nbsp;nbsp;cost the United States an estimated $85.8 billion in mortality and reduced productivity; *Fetal alcohol syndrome, caused by a womans drinking during pregnancy, afflicts five thousand infants a year; it costs about $1.4 billion annually to treat the infants, children and adults afflicted with FAS; *More than twenty thousand people die annually in alcohol related car accidents. (Institute of Medicine, 1989)†¦show more content†¦The Health Recovery Center (HRC) in Minneapolis claims a 74 percent success rate (patients still sober one year later) and differs from conventional programsin several significant ways. First, it focuses on uncovering and treating physiological imbalances that may be causing alcohol cravings and throwing the entire body out of whack. For example: hypoglycemia is a common imbalance found in up to three quarters of alcoholics. The centers philosophy is simple quot;Until the body begins getting the essential nutrients it needs, recovery cannot begin.quot; (Ewing, 1978) They believe that no amount of talk will stop the cravings, anxiety, depression, mental confusion and fatigue that result from alcohols biochemical and neurochemical damage. quot;There is not time to obsess over past traumas when youre dying of a major disease. Why do people persist in believing that the damage done by excess ingestion of alcohol can be undone wi th psychological methods alone?quot; (Ewing, 1978) The Health Recovery Center is devo ted to the restoration of bodies, minds and spirits that have been ravaged by alcohol. Such restoration begins the moment a new patient walks through the door. 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Diabetes A Risk For Eating Disorders - 1338 Words

Diabetes directly correlates to a properly balanced diet. If you do not have good eating habits you could in time develop either type 1 or type 2 diabetes. Diabetes plays a major impact in a person’s life as it can put them at risk for eating disorders. According to Tucunduva, Gonà §alves, Koritar, and Alvarenga, (2013) patients diagnosed with type 1 diabetes pose a greater risk for developing eating disorders as opposed to the normal population, such as anorexia, bulimia nervosa, and more. Through some research, evidence has shown that clients with diabetes have been presented with micronutrient inadequacies. This is bad for the adults themselves, but also in the development of their fetus, as evidence by Le Clair, Abbi, Sandhu, and Tappia,†¦show more content†¦Dieting does not mean that someone should not eat, rather monitor your food intake. Diabetes is a disease that demands interdisciplinary treatment, including a specialized and careful nutritional approach. Erroneous concepts about eating and nutritional, combined with weight gain due to insulin therapy and the resulting body dissatisfaction, can contribute to restrictive, compensatory, and binge behaviors, which place the individual at risk of an eating disorder. (Tucunduva et al., 2013) The most common eating disorders presented from diabetes that affect a person’s body image and eating habits are anorexia nervosa, bulimia nervosa, and binge eating disorder. As evidence by Tucunduva et al. (2013) 58.7% of his total diabetic patients were classified to be at risk for an eating disorder. The most frequent identified behavior was restriction or dieting, second was purgative behavior indicating problems controlling type 1 diabetes, and the third behavior was binge eating. Even though we instruct these patients to go on a diet, it does not necessarily mean to starve yourself. These diabetics are thinking they cannot eat anything because it will cause their glucose levels to rise, but in reality they just need to watch out for certain foods that are high in sugar, as well as monitor their food intake better. When people are forced to diet in some way, they tend to forget that they still need a certain amount of nutrients for their body to function