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
1 INTRODUCTION – OBJECTIVES AND STRUCTURE OF THE PAPER
2 HIPP`S CORPORATE IMAGE - PROVIDING THE BASIS FOR CUSTOMER-BASED BRAND EQUITY
3 FEEDBACK EFFECTS OF AN EXTENSION – AN ANALYTIC APPROACH
3.1 The Change in Perception of a Parent Brand Caused by Brand Extension
3.2 Advertising a Brand Extension and its Feedback Effects on the Parent Brand
4 MANAGERIAL IMPLICATIONS FOR HIPP GMBH & CO VERTRIEBS KG
5 EXECUTIVE SUMMARY: “RECIPROCAL SPILLOVER EFFECTS: A STRATEGIC BENEFIT OF BRAND EXTENSIONS” BY SUBRAMANIAN BALACHANDER & SANJOY GHOSE
Objectives and Core Topics
This paper explores the feedback effects of brand extensions on the parent brand, specifically analyzing how strategic product expansions impact core brand perception and promotional effectiveness using Hipp GmbH & Co. Vertriebs KG as a primary case study.
- Analysis of feedback effects from brand extensions on parent brand equity.
- Evaluation of branding strategies in mature market environments.
- The role of congruency and brand familiarity in consumer perception.
- Optimizing promotional budget allocation between parent brands and new extensions.
- Strategic implications for leveraging brand reputation through successful product launches.
Excerpt from the Book
1 Introduction – Objectives and Structure of the Paper
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.
Chapter Summaries
1 INTRODUCTION – OBJECTIVES AND STRUCTURE OF THE PAPER: This chapter introduces the research context, highlighting the challenges of the German baby food market and the motivation for the study.
2 HIPP`S CORPORATE IMAGE - PROVIDING THE BASIS FOR CUSTOMER-BASED BRAND EQUITY: This section details Hipp's historical branding success and the foundational role of its strong corporate image in building brand equity.
3 FEEDBACK EFFECTS OF AN EXTENSION – AN ANALYTIC APPROACH: This core analytical chapter reviews academic literature on how extensions influence parent brand perception through congruency, familiarity, and advertising.
3.1 The Change in Perception of a Parent Brand Caused by Brand Extension: This chapter investigates theoretical models of schema change and the impact of brand familiarity on consumer attitudes following an extension.
3.2 Advertising a Brand Extension and its Feedback Effects on the Parent Brand: This chapter focuses on how promotional campaigns for new extensions can generate positive reciprocal spillover effects for the parent brand.
4 MANAGERIAL IMPLICATIONS FOR HIPP GMBH & CO VERTRIEBS KG: This chapter synthesizes the theoretical findings to provide concrete strategic recommendations for Hipp's brand extension activities.
5 EXECUTIVE SUMMARY: “RECIPROCAL SPILLOVER EFFECTS: A STRATEGIC BENEFIT OF BRAND EXTENSIONS” BY SUBRAMANIAN BALACHANDER & SANJOY GHOSE: This summary highlights key insights regarding how extensions can be effectively leveraged to boost the overall brand portfolio.
Keywords
Brand Extension, Parent Brand, Feedback Effects, Customer-Based Brand Equity, Mature Market, Brand Congruency, Brand Familiarity, Promotional Strategy, Reciprocal Spillover, Associative Network Theory, Schema Change, Marketing Management, Baby Food Industry, Brand Image, Advertising Allocation
Frequently Asked Questions
What is the core focus of this research paper?
The paper examines the feedback effects that brand extensions have on the parent brand, specifically evaluating how these extensions can either enhance or dilute the established brand image.
Which key topics are covered in the analysis?
The central themes include brand concept congruency, the influence of brand familiarity on consumer perception, the role of promotional advertising in spillover effects, and managerial strategies for budget allocation.
What is the primary objective of this work?
The primary objective is to analyze whether Hipp GmbH & Co. Vertriebs KG benefited from its expansion into the baby body care market and how this move affected the perception of its core baby food brand.
Which scientific methodology is employed?
The paper utilizes a critical literature review of five key scientific articles to establish a theoretical framework, which is then applied to the practical case study of the Hipp brand.
What is addressed in the main body of the paper?
The main body investigates academic models of consumer perception change and explores how advertisement of a brand extension can generate positive spillover effects for the parent brand.
Which keywords best characterize this research?
Key terms include brand extension, parent brand, reciprocal spillover effects, brand equity, and strategic brand management.
How does brand familiarity influence the feedback effect according to the study?
The study suggests that while familiar brands are often more resilient, they are also subject to different consumer cognitive processes, such as the book-keeping model, when reacting to new product associations.
What managerial advice is provided for Hipp GmbH & Co. Vertriebs KG?
The author recommends that Hipp should potentially reallocate its promotional budget to focus more on the new body care line to leverage reciprocal spillover effects, potentially attracting new demographics to the parent brand.
- Quote paper
- Tanja Winterberg (Author), 2007, Feedback Effects of Brand Extensions, Munich, GRIN Verlag, https://www.grin.com/document/90135
