edf40wrjww2CF_PaperMaster:Desc
McDonald’s is one of the world’s strongest and most recognizable brands for its “world’s best quick service restaurant service experience” (Vandenbosch and Mark). This case study states that McDonalds plans to extend its brand into the hotel industry by opening a hotel in Illinois. The authors look at the hotel venture’s positioning options and the McDonald’s brand extension into a different product class. In order for McDonalds to successfully extend their brand into the hotel industry, they must manage their growth wisely, rely on the strength of their corporate brand, and consider what their customers really think their brand is. In the end, they must make sure that the extension of their brand brings meaningful perceived value to the consumers they target.
Over the last decade, brand extension has become one of the hottest subjects in brand management. Extending a brand into a new category to capitalize on brand recognition and consumers’ trust can be a good choice for a few reasons. It can help lower costs, and add profits relatively fast while limiting financial risks because several products will promote each other under the same brand name. In many industries, launching a new brand is costly and so it seems logical that any company with such a huge brand name in the marketplace would decide to extend their brand in an economical way to quickly gain credibility in the new chosen marketplace. For the same reasons, it takes less time to educate the market with the extended services of an existing brand than to launch a new name from scratch. From a managerial perspective, brand extension is a relatively fast way to add more to the bottom line in a relatively short period of tim ...