Brand Extension: Introducing New Product in the Market

This report discusses extension strategy with the help of introducing new product in the market. Brand extension is the process of launching new product different from existing product category. It helps in leveraging parent brand with existing market share and brand image. In this report Loreal is launching new product in the market under its skin care brand. Its potential target market is teenagers, adults in both men and women. It has competitors which serves market leading to intense competitive rivalry. For this competitive analysis is done with Nivea which helps in product distinction and competitive advantage.

Brand Extension

Table of Contents
Executive Summary...................................................................................................................3
INTRODUCTION......................................................................................................................4
Methodology..............................................................................................................................4
Findings......................................................................................................................................5
CONCLUSION..........................................................................................................................7
REFERENCES...........................................................................................................................8
Books and Journals................................................................................................................8

Executive Summary
This report discusses extension strategy with the help of introducing new product in
the market.Brand extension is the process of launching new product different from existing
product category. It helps in levaraging parent brand with existing market share and brand
image. In this report Loreal is launching new product in the market under its skin care brand.
Its potential target market is teenagers, adults in both men and women. It has competitores
whi serves market leading to intense compititive rivalry. For this competitive analysis is done
with Nivea which helps in product distinction and competitive advantage.

INTRODUCTION
Brand extension is part of marketing growth strategy which helps in introducing new
product in the target market. It is formation of new brand under existing parent brand. This
leads to marketing of new brand with gained recognition from parent brand. This leads to
marketing of new product before it enters the market. It helps in targeting customers in
different product category with leveraging brand equity of the existing brand. It falls under
the same trademark with different product line or category. L’Oreal is a prominent and luxury
brand in personal care products. It is a French brand with registered office in Paris. It has a
good market share in skin care, hair care and cosmetics with increasing global market size. It
has been growing at average five per cent rate which can be observed from trends in sales or
turnover (Joshi and Yadav, 2017). This report aims for demonstrating current values of the
extended brand. It includes potential target market for the new brand with the help of
secondary and competitor research.
Methodology
It is the research method conducted for understanding and analysing the scope,
adaptability and performance in the market. In brand extension company goes through
various research methods such as academic, competitor and secondary research.

Findings
 Existing brand and Brand Values- A brand is an ascertaining name, symbol, logo or
design which differentiates company from its competitors. Brand extension is a
marketing strategy which launches new product category under the existing brand.
Brand identity prism model
This model helps in building strong brands with six key elements which
further helps in communicating clearly and for easily remembered. These are:
1. Physique- It includes physical characteristics of a brand such as visual
features. Loreal has depicted itself for women personal care dedicated to all
the women.
2. Personality- These are the traits brand represents to its customers. Company
demonstrate brand personality as very beautiful and attractive women.
3. Culture- It is the set of values which helps in foundation of brand values and
setting principles. Company uses excellence, beauty, innovation and expertise
as their core cultural values.
4. Relationship- It reflects nature of relationship brand and consumer shares
which helps in connecting brand with its audience. Loreal shares the
relationship of strong trust with women using products as their beauty partner.
5. Self- image- It relates to the manner in which customer represent themselves
with a particular brand. Loreal holds image among women as beautiful,
independent and powerful.
6. Reflection- It shows how brand portrays with beliefs and characteristics of its
target market. It is depicted in the ads and campaigns by the company. They
reflect benefits of worldwide leader of women personal care at an affordable
price (Ke and Wagner, 2020).
 Target Market- Target audience for the new brand extension is women concern for
their health of skin in bathing. It can be done with STP marketing planning model
which helps in approaching and positioning in target market. These are:
1. Market Segmentation- It is the grouping of homogenous traits between
people which helps in better serving needs. It is the narrowing process on the
basis of factors such as demographic, psychographics, behavioural and
cultural etc(Kim and Park, 2019).
2. Market Targeting- In this opportunities are identified after segmentation of
markets. It can be done with application of insights and consumer data
gathered. It helps in communicating messages with effective marketing
campaigns to target audience. The target audiences for new product is
teenegers and adults.

3. Positioning- It is positioning of product in target segments with serving of
unmet needs. It helps in impacting audience by presenting right message at
right time.
 Analysis of new market- It is important to scan environment of new market for
optimising growth opportunities. For this PESTLE analysis is undertaken:
1. Political factor- Company faces political challenge with obligating different
government leadership styles in various operating countries. It has to abide
changes in legislation and policies for chemicals used in dermatology
products. Also, it faces restrictions by complying with advertising standards in
different countries.
2. Economic factor- Due to presence of economic crisis in different countries
company has to face challenges with reducing dollar value in operating
countries.
3. Social factors- With the rise in standard of living, customers demand quality
and effective products in personal care. They have become conscious for their
appearances which lead to higher expectations from company products.
4. Technological factors- With the advancement of technology it brings new
trends in cosmetic industry. Due to continuous improvement in science and
technology it leads to opportunities and threats. Company has strong R&D
team which improves product with continuous investments(Prados-Peña and
Barriodel García, 2018).
Ansoff Grwoth strategy- Loreal is adopting new product development strategy in
which it is serving existing customers. This helps in growing market share with new product
in its portfolio. The product has emerging high demand which helps in tapping opportunity
for unfulfilled needs.
 New Product- The chosen product name is Loreal body wash packed in different size
bottles with variety such as aloe, mint, strawberry and lemon. It will position in the
target market for youngsters, adults for both men and women.
 Competition- It has competing brands such as Nivea shower gel, Fiama and The
Body Shop in the new market (Joshi and Yadav, 2017).
Basis Loreal Body wash Nivea shower gel
Features It has unique features for both men
and women. It includes smoothning
substances which helps in vibrant and
healthy skin. Body wash is more
healthy for skin than shower gel and
soap.
Nivea shower gels are
good in cleaning and
moisturising substances
which is better option than
a soap.
Packaging It isw packaged in attractive bottles
with conveninet usage while bathing.
It is pacaged in plastic
bottles with oval shape.

These bottles are available in
recycling plastic with stylish and
captivating design.
These are easy to carry and
store.
Benefits The body wash provides healthy skin
with removing dead cells and pimple
agents. It comes with different variety
which helps in fulfilling different
needs
It provides soft skin with
protection from skin
drying. It also provides
variety which helps in
restoring moisture in skin.
Thus, Loreal is distinct from its competitor in providing intoxicant remobval
substances. It is made with focus on smoothen skin with no harmful chemicals. It is
distinct with competitors in providing harmless body wash (Ke and Wagner, 2020).
CONCLUSION
From the above report it can be concluded that introduction of new product with the
help of vrand extension has various benefits. Brand extension strategy leads to formation of
new product with different category. Loreal has introduced body wash whichb is one of the
leading branf in skin care. This leads to successful launching of new brand with high brandf
recognition power. Thus, it can be said that new product will thrive in its target maerket
across the world(Kim and Park, 2019). It has demand due to emerging and dynamic market
with awareness for skin care.

REFERENCES
Books and Journals
Joshi, R. and Yadav, R., 2017. Evaluating the feedback effects of brand extension on parent
brand equity: A study on Indian FMCG industry. Vision. 21(3). pp.305-313.
Ke, X. and Wagner, C., 2020. Global pandemic compels sport to move to esports:
understanding from brand extension perspective. Managing Sport and Leisure, pp.1-
6.
Kim, K. and Park, J., 2019. Cultural influences on brand extension judgments: Opposing
effects of thinking style and regulatory focus. International Journal of Research in
Marketing. 36(1). pp.137-150.\
Prados-Peña, M.B. and del Barrio-García, S., 2018. The effect of fit and authenticity on
attitudes toward the brand extension: The case of the Monumental Complex of the
Alhambra and Generalife. Journal of Cultural Heritage. 31, pp.170-179.
(Joshi and Yadav, 2017) (Ke and Wagner, 2020)(Kim and Park, 2019)(Prados-Peña and
Barriodel García, 2018)