INTRODUCTION In theconditions of severe competition, even quite well-known enterprises face arather difficult task: how to retain their positions in the market and maintaintheir efficiency. Usually the management of organizations carries out a numberof activities to increase market share, reduce costs in order to implementprice competition, and many others. But often this is not enough to survive (Clifton,R. and Ahmad, 2009). Manyexperts are increasingly inclined to the conclusion that the main factor in thesuccess of most enterprises is the loyalty of consumers (Kotler, 2009). Thisnotion appeared not so long ago in our country, but has already won theinterest of many.
The highest degree of loyalty of consumers is an almostfanatical veneration of the brand. Anyproduct when it appears on the market creates an impression of itself -positive or negative, it appears inevitable, as soon as the consumer learnsabout the product. These associations, the perception of the goods by theconsumer, are called the brand (Pizam, Oh, 2012). Abrand is an impression of a product in the minds of consumers, a label that ismentally pasted onto a product (Davis, 2009). The process of creating a brandand managing it is called branding.
It can include the creation, strengthening,repositioning, updating and changing the stage of development of the brand, itsexpansion and deepening. Brandingare methods of creating a special impression, which contribute to the overallimage and the relation of the target market segment to the brand. At any givenmoment, any brand has a certain image – a unique set of associations that arecurrently in the minds of consumers (Wheeler, 2003). These associations expresswhat the brand means right now, and are a momentary promise to consumers from theauthors of the brand. Inthis research will be discussed the potential risks and issues that can occurduring the process of the brand extension. As an example will be taken animaginary company – brand extension of Universal Studios Moscow – Movie Suites hotel complex. POTENTIAL RISKS FOR THE BRAND EXTENSIONDeveloping a brand for a product or product line canbe associated with a number of problems:· Brandmanagers sometimes limit their area of ??responsibility to financial andmarketing goals, and miss the strategic vision of the brand, leaving it in thecompetence of exclusively senior management.· Acertain danger lies in concentrating on short-term tactical goals, while theymust be just milestones towards a strategic goal.
· Bothmentioned problems can occur due to the fact that management is not providedwith the necessary information on the strategic development of the firm.· Sometimesit is difficult to express the corporate values ??in a single brand. It is easyto track changes in the value of shares, it is more difficult to understandwhich product or categories the shares owe their dynamics.· Ina large company with many brands, it may happen that the goals of some brandswill go against the goals of others or, even harder, with the objectives of thewhole company.
· Brandmanagers sometimes set goals that will only maximize the effectiveness of theirdepartment, not the entire firm.· Brandsare sometimes criticized in social networks and other “popular” media- the brand manager must monitor, record and respond to these processes. Whenworking with sub-brands, the question arises whether individual characteristicsof a particular product will be perceived by consumers as belonging to allproduct lines. In other words, is there a danger that the consumer will formhis opinion, relying on the latest low-cost model that has entered the market (Kotler, Bowen and Makens, 2013). As practice shows, this depends first of all on what the main ideabears in itself a brand. For Universal Studios the main association are: funfor the whole family, memorable experience and special event destination (Sengupta,2007).
The hotel complex shares the same attributes, however, it has some ofits own: lavishness, comfort, unique hospitality experience, relaxation. Thatis why in promotion these qualities of the hotel must be mentioned as well sothe guests don’t create the wrong image about the hotel complex. The otherpitfall when working with brands is the brand image. Image, some momentaryimpression of the brand, can turn into its essence, individuality (Ries andRies, 2014). The problem is that the image is oriented to a specific situationon the market that has developed precisely today. Creatinga unique brand is more than just recognizing what the users want (Anholt, 2003).
Uniqueness must also reflect the “soul”and vision of the brand, anticipate what consumers will then like. This set ofbasic characteristics should remain unchanged for a long time, only then thecompany has the opportunity to create a really strong brand. Thehotel complex Movie Suites shares thesame target market as a Universal Studios, however, the expectations from bothbrands are different (Dev, 2012). Some peoplewant their vacation to be the great fun, but still the most unforgettableexperience they will receive after a long day in the park laying in a big bedand enjoying comfort and hospitality at its finest. The hotel complex doesn’tonly conclude the day spent at the Studios, it gives a customer a differentpoint of view on what a good vacation is – relaxing, calm, lavish.
That’s whyit is assumed that the hotel complex will be a “cherry on top” in theUniversal Studios experience and will give customers even more pleasantmemories. Theindividuality of the brand is not only and not so much the characteristics ofthe product as the associations and symbols associated with the brand (Ramesh Kumar, 2009). So, an expensive car is not only safety, comfort andspeed, but also prestige, belonging to a certain social stratum. Methods forpromoting the brand – how to sponsor an event, how to use advertising media -should be chosen precisely on the basis of the individuality of the brand (thatis, ownership of this car is prestigious and means belonging to a particularsocial stratum). Oneof the conditions for the existence of an effective brand is its constantadjustment, clarification within the company itself (Hasanali, Leavitt, andWilliams, 2005). However, it is difficult to expect employees of any vision ofthe brand, if they do not understand it.
This happens when the company is nolonger aware of the role that the individuality of the brand can play in the formationof the company’s core values ??and goals. Companies wishing to have a strongand sustainable brand should constantly maintain a sense of brand value in theminds of their employees. Asuccessful, strong brand is the real treasure the company owns. Like anytreasure, it can be assessed, although the evaluation process is hampered bythe “immateriality” of the brand. Approaches to the evaluation of thebrand have been developed quite a lot, but they are still not completelysettled(De Chernatony, McDonald, 2011).
Theremight be another risk considering brand extension – the brand laziness. The Universal Studious is a successful brand itself, that’s why themarketing team might not pay enough attention to the promotion of its extension(Hansen, Christensen, 2005). It can cause the loss of control over the newbrand and damage the reputation and image of already existing brand.
Marketingspecialists must work on both promotion campaigns with the same quality andgood attitude, so that a positive result is achieved. CONCLUSION Theextension usually works great for the whole company. An example of successfulbrand extension from the industry can beDisney. It was founded in 1920 as a cartoon studio. In the 1950s, the companybuilt the first Disneyland and launched a television show with the same name.After the opening of new Disneyland in Florida, Paris and Japan, a network ofbranded shops, resorts and the purchase of a cruise ship, the Disney brandproduces, in D. Aaker’s opinion, an impression much stronger than that arisingfrom the simple viewing of cartoons. Thanks to such a powerful brand, DisneyChannel can be considered one of the best TV channels among all existing inAmerica (along with CNN, MTV and some others) (Anholt, 2000).
Reasonsfor the success of the expansion – the company knew from the very beginningwhat it is: “Magic entertainment for all family members.” Everythingthat the company does strengthens this idea. But when the company started, forexample, the production of adult films, it did not take advantage of theexisting brand, but created new ones – Touchstone and Miramax. So, following the similar strategyUniversal Studios can create even more valuable brand extensions.