INDEX
Introduction …………………………………………………………………………………………………………..4
Licensing …………………………………………………………………………………………………………………
4
Negative Effects of Licensing……………………………………………………………………………………5
Brand Extensions and
Diversifications…………………………………………………………………………..6
Insights relating to Brand
Extensions ……………………………………………………………………………6
Spillover Effects of Brand
Extensions: ……………………………………………………………………….7
Diversification: Successful
Examples …………………………………………………………………………7
Negative effects of Brand Extension………………………………………………………………………….8
Successful Expansions into new
Geographies…………………………………………………………………9
Avons Turn-around: A Case Study ……………………………………………………………………………9
Literature Review ………………………………………………………………………………………………….10
Disney *€“ A Case
Study………………………………………………………………………………………………10
Brand Culture: ………………………………………………………………………………………………………
10
Brand Symbols ………………………………………………………………………………………………………
12
Benefits from Brand
Symbols…………………………………………………………………………………….12
Scope of the Project ……………………………………………………………………………………………….
18
Project
Objective: ……………………………………………………………………………………………………18
Research
Objectives: ……………………………………………………………………………………………….18
Research
Methodology:……………………………………………………………………………………………19
Research
Tools: ………………………………………………………………………………………………………19
Content
Analysis ……………………………………………………………………………………………………..19
Semiotic
Analysis …………………………………………………………………………………………………….19
Expected
Outcome: …………………………………………………………………………………………………20
Time
line:………………………………………………………………………………………………………………21
The Disney Brand …………………………………………………………………………………………………..
22
Brand Extension at Disney……………………………………………………………………………………….
23
Expansion across Geographies………………………………………………………………………………….
29
Introduction: ………………………………………………………………………………………………………….2
9
Disney: Geographic Expansion *€“
History ……………………………………………………………………. 29
Euro Disney Land:
Learnings …………………………………………………………………………………….29
Targeting Global Growth:………………………………………………………………………………………30
Case in Point: Expansion into China: ………………………………………………………………………….
31
Background: …………………………………………………………………………………………………………..3
1
The Chinese
Market:………………………………………………………………………………………………..31
The Locally tailored Retail
Strategy: ……………………………………………………………………………32
Choosing
Partners: ………………………………………………………………………………………………….33
Concentration in the retail
segment: ………………………………………………………………………….33
Distribution: …………………………………………………………………………………………………………..3
4
Pricing
Strategy: ……………………………………………………………………………………………………..34
Fighting
Piracy: ……………………………………………………………………………………………………….35
Marketing and
Promotions: ………………………………………………………………………………………36
Future in
China: ………………………………………………………………………………………………………36
Disney: Future Expansion Plans: ……………………………………………………………………………….
37
Honk
Kong: …………………………………………………………………………………………………………….37
Entry
Strategy:………………………………………………………………………………………………………..37
Russia: …………………………………………………………………………………………………………………..3
7
Partnerships/JVs: ………………………………………………………………………………………………..37
Disneys Brand Culture ……………………………………………………………………………………………
39
Brand Symbols………………………………………………………………………………………………………
45
Disney: A SWOT Analysis …………………………………………………………………………………………
59 References:…………………………………………………………………………………………………………..
60
Introduction
The background study of the project has been facilitated and supported by available
literature in the form of journal/ research articles and essays and other publications. The
focus of the literature review has been on: Licensing Brand Extensions and
Diversifications Expansion into new geographies Brand Culture Brand Symbols
The aim was to study how a brand can incorporate each of these into its branding strategy.
This thus formed a basis for furthering our project of developing a case-study of the
strategies that helped build the iconic brand that is Disney.
Licensing
Licensing, or Franchising, allows the brand name and trade mark to be used by someone
else, often in categories and industries far removed from that of the brand. This, when used
successfully, translates to increased brand equity in previously uncaptured markets and
brand benefits at several levels, in addition to generating more volumes in terms of sales
and revenues. In 1928, a cash-strapped Disney licensed Mickey for the cover of a Pencil
Tablet after the release of Steamboat Willie. This was the first of several such licensing
agreements. Later the company took care to license its name only to the best companies,
lest its brand equity
be diluted. Today, Disney Studios licenses its name, image and catalog of characters and
titles to hundreds of companies world-wide for reproduction on shirts, shoes, sleepwear,
bedding, toys, tapes, records, CDs, books, jewelry, furniture, school supplies and much
more. For instance, Disney as issuing 140 licenses to sell approximately 10,000 items
bearing the 101 Dalmatians “endorsement.”This is in accordance to the comment, The
movie itself could have been a dog at the box office, but it 4
was sure to generate millions of dollars in licensing fees from T-shirts, plush animals, juice
mugs, toy vet kits and more. Benefits to Disney from licensing of its brand-name, iconic
characters and trademark can be summed up as follows:
Revenue generation without any capital investment Disneys smart licensing policy allows
it to earn revenues for use of its brandname and characters on products or ventures in
which Disney itself has little or no manufacturing role of capital investment. The revenue
earned from licensing today surpasses Disneys revenues from its primary business
(movies, TV programs, theme parks/ hotels).
Greater brand visibility without any direct or marketing costs Disneys name and characters
appear on a host of unrelated merchandise, indirectly advertising the brand name,
sometimes creating greater awareness about the brand itself in less media-open markets or
markets where Disney has yet to make a mark through television or theme-parks or even,
movies. This allows Disney to utilize the marketing bucks of others to extend or enhance
the value of its own brand.
Negative Effects of Licensing
Licensing
can have certain negative impact also. Disney had licensed its brand to several
confectionaries and fast food outlets in US. With the obesity epidemic among children
creating panic among the parents, the Disney brand was also beginning to be associated
with the unhealthy eating habits of children. This was later resolved by its entry into the
health food market and by revamping the eating options available at the theme parks.
Brand Extensions and Diversifications
Line Extension or Brand Extension in the form of new offshoot products of the original
brand, was also an area explored for preliminary research work as part of this project. As
per Brand Extension literature (A. Manila & C. Caswell, ESOMAR, 2008) there are eight
broad types of Brand extensions as identified below: 1) Similar product but in a different
form from the original parent product: Ex: Snickers – bar * ice cr*me bars 2) Trademark
flavor/ingredient/component in the new item: Ex: Hersheys – Chocolates * Hersheys
Chocolate Milk 3) Benefit/attribute/feature owned: Ex: Arm & Hammer – refrigerator
deodorizer * deodorant, cat litter deodorizer. 4) Expertise: Ex.: Hondas engines – bikes/
cars * lawn mowers, generators etc. 5) Companion products: Ex: HP *€“ Printers and
Special Photo-paper 6) Vertical extensions: A brand can use their ingredient/component
heritage to launch products in a more (or sometimes less) finished form. Eg. Reliance 7)
Same customer base especially when it is large and to some extent captive Ex: VISA
launched travelers checks directed to its credit card customers 8) Designer image/status:
Ex: Harley Davidson *€“ iconic bikes *
licensed lifestyle items
Insights relating to Brand Extensions
Insight #1*€”A brand extension strategy for launching a new product only works if your
existing brand has high enough parent brand penetration. Insight #2*€”Brand extensions
that are not connected with the meaning of the base brand are destructive even though they
might hit sales targets.
Insight #3*€”Emphasize brand-building (e.g. advertising, social media) to build the master
brand, and utilize shopper marketing and couponing to sell the brand extension. The key
point is that line extensions are bought out of preference for the brand and acceptability for
the line extension, not preference for the line extension.
Spillover Effects of Brand Extensions:
Researchers (Deborah Roedder John, Barbara Loken, & Christopher Joiner) have
investigated the extent that consumer perceptions and reactions to brand extensions spill
over to the parent company. And, if there is a spillover effect, they asked what are the
potential risks or benefits to the parent company? ( Loken & John, 1993) has focused on
whether spillover exists for perceptions of the brand name vis-*-vis consumer perceptions
or beliefs or financial effect toward the brand name. In contrast, the paper by Roedder et al
examined whether spillover exists for perceptions of individual products marketed under
the brand name. The findings indicate that positive spillover effects are negligible, but that
negative spillover effects are evident for some types of established products.
Diversification: Successful Examples
Near one end of the spectrum, Dell has maintained a focused link between its brand and its
core
product line: personal computers. At the other end is Disney. In the 1950s, that company
too had a focused brand, which signified world-class animation, mainly for children.
Today, Disneys businesses include films, television, publishing, software, theme parks,
hotels, cruises, and even an entire town -Celebration, Florida (Court, Leiter, & Loch 1999).
The companys name now represents the broader concept of “wholesome entertainment and
living at any age.” Dell has decided to remain focused for now, while Disney elected – and
managed – to diversify. The crucial question for CEOs is which camp they want to be in.
As these examples show, a strong company can do well in either. But when we broke down
the figures showing that strong brands earn total returns to shareholders 1.9 percent above
7
the industry average, we found that focused brands (such as Dell, Levis, Sprint, and
Gillette) earn 0.9 percent more than the average, while diversified brands (such as Disney,
GE, and American Express) earn no less than 5 percent more!
Negative effects of Brand Extension:
Damaging effects from extensions/ diversification come from the following factors: failure
of the extension product lack of fit between the original and extension product categories
(Keller and Aaker 1992;Loken and John 1993; Park, et al. 1992; Romeo 1991) failure to
capture new market opportunities, when the brand, in an attempt to cover both the new
opportunities as well as its core business, ends up being generic and therefore right for
neither When a brands offerings or customer targets have become so diverse that the only
thing tying them together is
a set of broad, undifferentiated elements like quality and superior value, the brand is at
significant risk of losing what made it distinctive. By keeping the brand proposition
constant across markets, companies can limit the customized-for-the-market risks that
might dilute or damage the core brand. Failure to capture potential market value is an
important brand risk as well as a business risk, as brands can become stale and irrelevant if
their promise remains unchanged in the new market. In addition, brand-loyalty driven
inflexibility leaves a company vulnerable to competitor brands that customize their value
proposition for individual markets. The most successful brand extensions are characterized
by a strong fit between a brands equity *€” specifically, those intangible emotional
elements that endear customers *€” and the unmet or underserved needs of customers in a
particular market. To that end, it is critical to know how the brand is currently perceived in
