Think of brand image in terms of three components: maker image, product image, and user image. Mercedes could have chosen a safer route by introducing a new brand positioned as “by Mercedes.” Although a costly strategy, it would have leveraged the maker image while insulating it from any possible degradation associated with a less prestigious car. However, this strategy would have limited the attractive user image that the Mercedes 190 quickly developed and donated to the parent brand.
Similarly, introducing an upscale line can be a useful strategy for a marketer with a downscale image. When Gallo introduced its premium varietals, the company decided to use the Gallo brand name. Gallo’s prior association with lower price points clearly reduced the appeal of the new varietal line. But the upmarket product image, in addition to the user image of the varietals, was an important positive association for the parent. In other words, the varietals serve a useful purpose beyond their own volume contribution.