BRAND EXTENSION PLAN

Brand Extension Plan



Brand Extension Plan

4.1 Break Even Analysis

Break Even Scenario

Revenue

80000000

sales price

100

variable expense

75

Variable cost

60000000

contribution margin

25

units

800000

fixed costs

20000000

Break Even

0

XXX achieving the par sales of YYY

Revenue

48000000

96000000

144000000

192000000

sales price

100

100

100

100

variable expense

75

75

75

75

Variable cost

25

25

25

25

contribution margin

25

25

25

25

units

480000

960000

140000

1920000

fixed costs

20000000

20000000

20000000

20000000

estimated losses in the first year

-8000000

4000000

16000000

28000000

4.2 Sales Forecast

Sales Forecast of Year - 1 on Monthly Basis

Year 1

Sales

Jan

4000000

Feb

4000000

Mar

4000000

Apr

4000000

May

4000000

Jun

4000000

Jul

4000000

Aug

4000000

Sep

4000000

Oct

4000000

Nov

4000000

Dec

4000000

Sales Forecast on Quarterly Basis

Year 1

1st

2nd Q

3rd

4th

Q

Q

Q

12000000

12000000

12000000

12000000

Year 2

1st

2nd Q

3rd

4th

Q

Q

Q

24000000

24000000

24000000

24000000

Year 3

1st

2nd Q

3rd

4th

Q

Q

Q

36000000

36000000

36000000

36000000

Year 4

1st

2nd Q

3rd

4th

Q

Q

Q

48000000

48000000

48000000

48000000

5.0 Controls

The purpose marketing plan is to serve as a guide for the organization. The following areas will be monitored to gauge performance:

Revenue: monthly and annual

Expenses: monthly and annual

Customer satisfaction

New product development

Financial Measures

There is also a widely accepted method that measures brand equity featured in the Financial World magazine. It is the yearly evaluation of brand equity, which is calculated from profit and brand strength. Brand strength is determined by several factors such as leadership, stability, trading environment, internationally, ongoing direction, communication supports and legal protection. (Laudon and Kenneth, 2009)

Several indicators determine the success of brand extensions in the consumer evaluation of brand extension which consist of several components such as Brand Attribute Association, Attitude toward the Original Brand, Fit between the Original and Extension Product Class comprising with Complement Fit, Substitute Fit and Transfer from the parent brand including Perceived Difficulty of Making the Extension. Consequently, customers may evaluate between the existing parent brand and the brand extension that affects their buying decision (Ackoff, 1970). Brand Extension, as defined earlier, refers to any product line that takes advantage of a successful brand name to launch a new or modified product in a new market. The new product is called extending brand, while the existing brand is called the parent brand.

5.2 Marketing Organization

Dropping the Price for Differentiation

Everything for the management's attention is now chosen by Steve Jobs to drop the price of its Apple "iPad" after few months after its release. Many experts say that these lower prices can only be negative for the Apple "iPad" that is the high-end positioning is not new and it will not help to increase sales of the "iPad". A theoretical approach would allow us to understand whether or not the decline in the price of the "iPad" which is likely to be negative for Apple. There are two cases in which a high price has a competitive advantage which are mentioning below;

On certain niche markets, for example, luxury goods and

In some highly competitive sectors (for example, consumer service industry). In these very different sectors, the competitive advantage gained through a high-price responds to different mechanisms which are based primarily on the value of the brand (intangible assets of the company).

Market Niche

Selling a product at a high price is only possible when the consumer has reduced visibility on the cost of the product for the company. (Allison, 1971)

The consumer buys a brand that is highly differentiating.

Role of the mark, it returns an image of the consumer who values it.

Perceived Value

For customers who are using the products of Apple, it is ...