The Toughest Brand Challenge: Extending Into a Value Arena
Author: David Aaker
David Aaker, vice chairman of Prophet, has published more than 100 articles and 15 books and is the creator of the Aaker Model™. He has been awarded best article awards by the Journal of Marketing and the California Management Review and serves as professor emeritus at the Haas School of Business, University of California, Berkeley. He has received four career awards, including the 1996 Paul D. Converse Award for outstanding contributions to the development of marketing, holds a Ph.D. and a master’s degree from Stanford University and a bachelor’s degree from the Massachusetts Institute of Technology.
Moving a brand into a value arena has exceptional risks not found in other brand extension contexts. But the decision is often based on business logic driven by attractiveness of the value market and the ability of the firm to compete. As part of that business decision and its implementation, brand strategists should be able to identify the specific business rationale and the risks of the available brand options.
Moving an established premium brand into a value market risks tarnishing the brand. Brand perceptions can degrade the value entry or be perceived to lack the quality expected from the brand. A companion risk is that the brand’s ability to deliver self-expressive benefits may be reduced. Value entries can create cannibalization problems, and they can also be viewed as high-priced; a big problem when value is the driver.
However, marketers can take advantage of four brand options to successfully navigate their value entries from these risks.
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