Even though it may sound strange, the baby food market in Germany has recently been announced to be a mature market. Referring to the Federal Statistical Office the state’s birth rate is decreasing steadily, as in 2006 only 1.331 children per woman in average were born (Statistisches Bundesamt 2007). Hipp GmbH & Co Vertriebs KG has been the market leader in the product category of baby food for over half a century now, representing a strong unique image that combines quality and trust with organic farming (Hipp 2007). Although maintaining market shares and keeping up high brand equity the company has been coping with declining turnover due to reduced market potential in the last years. To solve this problem Hipp expanded to another product category in 2006, using its strong image to break into the baby body care market – with success. But how did this strategic move impact the core brand perception? As little research has been done on extension’s feedback-effects towards the parent brand this paper presents an analytic approach towards this branding issue.
After introducing Hipp’s branding strategy and highlighting two issues the company faces in concern to brand extension the paper critically analyzes five scientific articles dealing with feedback effects. In an overall conclusion the findings of these articles are related to Hipp’s branding issues.
Table of Contents
- Introduction - Objectives and Structure of the Paper
- Hipp's Corporate Image - Providing the basis for Customer-based Brand Equity
- Feedback Effects of an Extension - An Analytic Approach
- The Change in Perception of a Parent Brand Caused by Brand Extension
- Advertising a Brand Extension and its Feedback Effects on the Parent Brand
- Managerial Implications for Hipp GmbH & Co Vertriebs KG
- Executive Summary: “Reciprocal Spillover Effects: A Strategic Benefit of Brand Extensions” by Subramanian Balachander & Sanjoy Ghose
Objectives and Key Themes
This paper analyzes the feedback effects of brand extensions on the parent brand, using Hipp GmbH & Co Vertriebs KG as a case study. The company, a leader in the mature German baby food market, expanded into baby body care. The paper aims to determine the impact of this strategic move on Hipp's core brand perception and to explore the effectiveness of their approach.
- Impact of brand extensions on parent brand perception
- The role of brand congruency and familiarity in shaping consumer perception
- The influence of advertising on feedback effects
- Strategic implications of brand extension in a mature market
- Evaluation of Hipp's brand extension strategy
Chapter Summaries
1 Introduction - Objectives and Structure of the Paper: This introductory chapter sets the stage by establishing the context of a mature baby food market in Germany and Hipp's market-leading position. It highlights Hipp's successful brand extension into baby body care products and poses the central research question: How did this strategic move impact the core brand perception? The chapter outlines the paper's structure, which includes an analysis of Hipp's branding strategy, a critical review of scientific articles on feedback effects, and finally, a conclusion linking the findings to Hipp's branding issues. The declining birth rate and consequent shrinking market are identified as key challenges for Hipp, necessitating a strategy for maintaining revenue and market share.
2 Hipp's Corporate Image - Providing the basis for Customer-based Brand Equity: This chapter delves into the established brand equity of Hipp GmbH & Co Vertriebs KG, emphasizing its long history, strong market share, and commitment to organic farming. It analyzes how Hipp has successfully cultivated a brand image that appeals to both rational (high-quality, ecological food) and emotional (trust, family values) aspects of consumer preferences. The chapter discusses the company's advertising strategy, which leverages the CEO's personal endorsement to reinforce brand credibility. However, despite its strong brand resonance, Hipp faces challenges due to the mature market, leading them to explore various strategies, including unsuccessful attempts to expand beyond their core demographic. The chapter sets the context for the later analysis of their brand extension into baby care.
3 Feedback Effects of an Extension - An Analytic Approach: This chapter undertakes an in-depth analysis of the feedback effects of brand extensions, focusing on how these extensions influence, either positively or negatively, the parent brand's perception. It critically reviews several scholarly articles examining different approaches to analyzing these effects, distinguishing between the impact of the extension itself and the influence of associated advertising campaigns. The chapter lays the groundwork for understanding the complex interplay between brand extension strategies and their impact on consumer perceptions and brand equity, providing a theoretical foundation for evaluating Hipp's strategy.
Keywords
Brand extension, brand equity, feedback effects, parent brand, customer-based brand equity, mature market, Hipp GmbH & Co Vertriebs KG, advertising, brand congruency, brand familiarity, market development strategy.
FAQ: Analysis of Hipp GmbH & Co Vertriebs KG's Brand Extension Strategy
What is the main topic of this paper?
This paper analyzes the impact of a brand extension on the parent brand, using the German baby food company Hipp GmbH & Co Vertriebs KG as a case study. Specifically, it examines the feedback effects of Hipp's expansion into baby body care products on its core brand image and market position.
What are the key objectives of the research?
The research aims to determine how Hipp's brand extension into baby body care influenced its core brand perception. It explores the role of brand congruency and familiarity, the impact of advertising on feedback effects, and the strategic implications of brand extension in a mature market. Ultimately, it evaluates the success of Hipp's brand extension strategy.
What are the key themes explored in the paper?
The paper explores the impact of brand extensions on parent brand perception, the influence of brand congruency and familiarity on consumer perception, the role of advertising in shaping feedback effects, and the strategic challenges of brand extension in a mature market like the German baby food market. The declining birth rate and its implications for Hipp's market share are also considered.
How does the paper analyze Hipp's brand extension?
The analysis includes a detailed examination of Hipp's pre-existing brand equity, including its established corporate image, market share, and commitment to organic farming. It reviews scholarly articles on feedback effects to provide a theoretical framework for understanding the complex relationship between brand extensions and consumer perceptions. The paper then applies this framework to evaluate Hipp's strategic move into baby body care.
What is the structure of the paper?
The paper is structured into several sections: an introduction outlining the research question and objectives; an analysis of Hipp's corporate image and brand equity; a detailed discussion of feedback effects from brand extensions, informed by existing academic literature; an evaluation of the managerial implications for Hipp; and a concluding executive summary referencing Subramanian Balachander & Sanjoy Ghose's work on reciprocal spillover effects.
What are the key findings or conclusions (as previewed)?
The full conclusions are not detailed in this preview, but the paper aims to provide an evaluation of Hipp's brand extension strategy, considering the impact on its core brand perception and market position within the context of a mature and shrinking market. The preview suggests the analysis considers both the positive and negative feedback effects resulting from the extension and associated marketing efforts.
What keywords are associated with this research?
Brand extension, brand equity, feedback effects, parent brand, customer-based brand equity, mature market, Hipp GmbH & Co Vertriebs KG, advertising, brand congruency, brand familiarity, market development strategy.
- Quote paper
- Tanja Winterberg (Author), 2007, Feedback Effects of Brand Extensions, Munich, GRIN Verlag, https://www.grin.com/document/90135
