Report on Apple's Brand Extension Strategy: MG412 Marketing Principles

This report evaluates the significant factors affecting Apple's brand extension process, focusing on its entry into the sports clothing market. Utilizing qualitative research, the report examines Apple's existing brand values, conducts a PESTLE analysis, and applies Ansoff's Grid to assess market penetration, product development, market development, and diversification. The target market is identified as the upper class, with segmentation based on age, gender, and occupation. The report also explores the competitive landscape, highlighting Adidas as a major competitor. The analysis concludes that Apple is pursuing a product development strategy by launching clothing for its existing target market, emphasizing quality and brand image. The report uses secondary research and qualitative methods to provide insights into Apple's strategic approach to brand extension.

MG412 Principles of
Marketing

EXECUTIVE SUMMARY
Brand extension is using existing brand image to sell new products and services. The current
report has aimed at evaluating significant factor affecting brand extension process. It has been
used qualitative research. It has comprised Existing brand and its values, Pestle and Ansoff's
Grid analysis. It has involved an explanation of new product which indicates that clothing of
sports category for upper class group. It has been analyzed that Adidas is one of the biggest
competitor.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
CW2 ...............................................................................................................................................2
Methodology...............................................................................................................................2
Findings......................................................................................................................................2
CONCLUSION ..............................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
Principle of marketing is concerned with formulating appropriate structure for difefrnt
elements like product, price, place and promotion. In the current era, brand extension si highly
important for carrying forward operational practices on larger scale in turn higher stability can
be derived. The current report is based on Apple which is one of the multinational technology
company that is specializes consumer electronic which is extending its product line in clothing
segment. It is offering sports cloth for young women and men which has covered higher market
share. The trend of selling is in inclining trend which is resulting into higher ability to cover
larger segment. The present study will include existing brand & value, description of targeted
market, analysis of new market including PESTLE and Ans off grid. It will comprise
explanation of new product and competition.
CW2
Methodology
The current research regarding brand extension of Apple organization can be properly done by
applying qualitative research. It is secondary research which will involve information from
articles, journals, etc in turn higher insights about the topic can be derived.
Findings
Existing brand and its values
brand refers to name, term, design, symbol and other kinds of characteristics which has
possessed by product. Branding is related with differentiating company by using particular
symbol (Brand Extension, 2021). Brand extension is related with the process which is used by
existing company for launching any new product category. The main aspect of brand extension
is to use company's h already established brand equity for launching the newest product. There
are several models which can be used for brand extension in turn proper conducting can be done.
(Ahn, Park and Hyun, 2018). Kapferer’s Brand Identity Prism is one of the model which is
helpful for the organization to build strong brand enduring identities that reflects their core
values. It has main purpose of using several resources of organization such as physique,
personality, relationship, culture, reflection, self-image, etc. This contributes in achieving
objectives of organization to extent brand successfully.
Description of targeted market
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The brand extension can be properly done by establishing STP process into procedure of bard
extension. The current market audience which is targeted by Apple which involves upper class
group. Segmentation is done on the basis of age, gender, occupation, other preferences, etc. It is
measurable, accessible, actionable. For the new product behavioral and demographic basis will
be selected to attract upper class segment for buying sports clothing. Targeting is done on the
basis of those customers who are ready to obtain quality products by paying higher cost. It is
done on the basis of those who are ready to pay more for quality. Positioning is selection of
products for appealing the targeted segment. The company will position on the basis of standard
quality and good brand image. It can focus on having those people who have higher preference
of quality than price factor.
Analysis of new market including trends
Pestle analysis
Political factor It is one of the international organization that get affected from
trade policies, political stability, country disputes, etc. Apple
brand extension can highly get affected from these factors in
adverse manner (Zheng, Baskin and Dhar, 2019).
Economical factor GDP, inflation, interest, employment, exchange rate, etc might not
affect highly to the Apple. The reason behind its limited negative
impact due to targeting upper class segment.
Social factor Changing trend, attitude, occupation level, cultural factor can
highly affect the functioning of Apple. The main reason behind
this is related with frequent changing habit of upper class group
which can negatively affect processing (What is PESTLE
Analysis? An Important Business Analysis Tool, 2021).
Technological factor Technological development is one of the competitive advantages
which can influence favorably to company. Selling sports wear to
both women & men can be successfully done by particular
organization.
Legal factor It involves legislation, law regarding industry, standard quality,
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etc which need to be complied by Apple.
Environment factor It needs to ensure that firm has good functioning which has less
carbon footprint, etc.
Ansoff's Grid
Market penetration focuses on inclining sales of existing products to current market.
Product development give emphasis on introducing new products to an existing customer
audience (DENG and MESSINGER, 2021). Market development is concentrating on entering on
a new market using existing products. Diversification focusing on both new market with
introducing new commodity. From the evaluation it can be specified that Apple is conducting
product development by launching clothing for already targeted upper class group.
An explanation of new product
There are different types of brand extension which involves product form, companion product,
company expertise, brand distinction, prestige, transfer of components, leveraging lifestyle, etc.
these are the seven strategies which are give by identifying extension cases so that parent brand
benefits can be derived (Ke and Wagner, 2020). On the basis of Tauber's barns extension it can
be identified that company is forming effective product form. Product packing will be done by
suing strong box which is waterproof and have focus on gaining ability avoid spoilage of any
quality, color, etc. Apple's clothing product will be positioned on the basis of its quality and
brand image.
Competition
Apple can face competition from several brands like Reebok, Nike, Adidas, Vans, Puma,
Timberland, etc which can highly influence its objective of achieving higher market share
(Knoerzer and Millemann, 2021).
Apple Adidas
 It has good brand image which
focuses on upper class to sell its
products
 It is successful organization which
focuses on all the age group for
selling its sport clothes
 It has skimming pricing strategies.  The specified organization has
competitive pricing strategy which
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can provide high level of competition
to apple.
CONCLUSION
From the above report it can be concluded that brand extension is related with using existing
brand name for launching new product. It has conducted secondary research by using qualitative
type. The targeted market of Apple is higher income group that has quality preferences than
price. It has applied PESTLE and Ansoff's which has identified that company can get success
by conducting product development.
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REFERENCES
Books and Journals
Ahn, J., Park, J.K. and Hyun, H., 2018. Luxury product to service brand extension and brand
equity transfer. Journal of Retailing and Consumer Services, 42, pp.22-28.
DENG, Q.C. and MESSINGER, P.R., 2021. Dimensions of brand-extension fit. International
Journal of Research in Marketing.
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.
Knoerzer, K. and Millemann, J.A., 2021. Investigating determinants of brand extension success
in a fit and a non-fit scenario. International Journal of Technology Marketing, 15(4),
pp.379-398.
Zheng, X., Baskin, E. and Dhar, R., 2019. By-brand or by-category? The effect of display format
on brand extension evaluation. Journal of Retailing, 95(3), pp.76-85.
Online
Brand Extension. 2021. [Online]. Available through:
<https://www.managementstudyguide.com/brand-extension.htm>.
What is PESTLE Analysis? An Important Business Analysis Tool. 2021. [Online]. Available
through: <https://pestleanalysis.com/what-is-pestle-analysis/>
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