Brand extensions at a glance

I recently came to know that Nirma has entered into a new category and as such, has introduced Nirma salt. I was flabbergasted to see Nirma entering in to this entirely new category.

When a company wants to extend its products or categories, it may go for line extension, multibrands, brand extension and new brands. In the respective context, Nirma must have followed a strategy of introducing an entirely new brand rather than having the same brand name for an entirely unrelated category like salt.

Nirma has a huge brand equity in the detergents category and as such, product extension or multibrands would have been a good strategy, had it maneuvered in the detergents category only. Nirma has followed the brand extension strategy wherein it has extended its category as well as brand. Well, I am really not sure how well is this gonna work. I think that Nirma should have introduced an entirely new brand to enter a new category like salt or condiments.

Brand extension generally works when consumers tend to generalize the stimuli, that is, people relate the quality of a brand to all the brands from the same stable. On contrary, consumers tend to differentiate the stimuli when the categories are entirely unrelated as in case of Nirma.

I think P&G has been really smart in have multibrands and new brands for brand development. It is into a lot of categories like personal care, home care, grooming and many more. As such, multibrands is feasible for product extensions and new brands for category extensions. Nirma is known for its presence in the detergents category and not in the category of edible products. As such, consumers would not generalize the brand equity of Nirma in these two unrelated categories.

Let us wait and watch how Nirma fares in the highly commoditized category of salt.