Answer – Four Branding Alternatives

• Lesson
• Exercise
• Answer

This is the suggested answer to the Four Branding Alternatives exercise on Colorado Ricardo Mountain Bikes.

New Frame Size and Colour: Line Extension

An existing brand name (Colorado Ricardo) applied to an existing product category (off-road bikes) is a line extension – the lowest-risk move, since it asks existing customers to consider only a minor variation of a bike they already trust.

The E-Mountain Bike: Franchise Extension

An existing brand name applied to a new product category (electric-assisted bikes) is a franchise extension. It borrows the trust Colorado Ricardo has already earned for ruggedness and durability, and carries that reputation into a category the brand has never competed in before.

The Cheaper Range Under a New Name: Flanker Brand

A new brand name applied to an existing product category (off-road bikes) is a flanker brand. Selling a budget off-road bike under a separate name lets Colorado Ricardo compete on price in a lower tier of the market without risking the premium reputation the main brand depends on.

Whichever option Ricardo chooses, it connects directly back to the strategic direction set out in the Ansoff’s Matrix exercise – a franchise extension into e-bikes, for example, is one concrete way to execute a Product Development strategy.