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Competitive differentiation through brand extensions in the era of hyper competition

Author

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  • Claudiu-Catalin Munteanu

Abstract

In the era of hyper competition, competitive differentiation has become increasingly important. Brand extensions are used by companies across various industries for competitive differentiation. But in the era of hyper competition, a successful differentiation strategy requires that a brand emphasizes on uniqueness rather than commoditization. In this article, we make a case for creating a meaningful differentiation strategy. We emphasize the role of brand extensions for competitive differentiation and highlight the main perils of using brand extensions as a primary differentiation strategy. By using qualitative research, we identify primary objectives for brand extensions in practice. This investigation uses in-depth interviews with 14 senior brand managers across various industries to highlight brand portfolio strategies in relation to the brand differentiation strategy. Findings reveal that for business at the base of the pyramid, in markets such as Romania, brand managers are using brand extensions to increase sales or to boost short-term revenue rather than to implement a coherent differentiation strategy. We conclude with multiple recommendations for improving brand extension usage as a strategic instrument for creating meaningful differentiation in the era of hyper competition.

Suggested Citation

  • Claudiu-Catalin Munteanu, 2015. "Competitive differentiation through brand extensions in the era of hyper competition," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(55), pages 57-70, March.
    • Handle: RePEc:rej:journl:v:18:y:2015:i:55:p:57-70
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    References listed on IDEAS

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    2. Albert, Noël & Merunka, Dwight & Valette-Florence, Pierre, 2008. "When consumers love their brands: Exploring the concept and its dimensions," Journal of Business Research, Elsevier, vol. 61(10), pages 1062-1075, October.
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    Cited by:

    1. Luke Butcher & Billy Sung & Kate Raynes-Goldie, 2019. "Gotta catch ‘em all: invigorating Pokémon through an innovative brand extension," Journal of Brand Management, Palgrave Macmillan, vol. 26(3), pages 227-239, May.
    2. Vibhuti Tripathi & Pooja Rastogi & Suresh Kumar, 2018. "Direct and Moderating Influence of Perceived Fit, Risk and Parent Brand Trust on Brand Extension Success of a Personal Care Brand in India," Global Business Review, International Management Institute, vol. 19(6), pages 1681-1692, December.

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    More about this item

    Keywords

    brand extension; competitive differentiation; differentiation strategy; hyper competition.;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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