Feedback Effects of Brand Extensions

Seminar paper from the year 2007 in the subject Business economics - Offline Marketing and Online Marketing, grade: 1,0, Copenhagen Business School (Copenhagen Business School: Department for Marketing Communication), course: Strategic Brand Management, language: English, abstract: 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.