Product extensions, on the other hand, are versions of the same parent product that serve a segment of the target market and increase the variety of an offering. An example of a product extension is Coke vs. Diet Coke

A successful brand helps a company enter new product categories more easily.

Brand extension benefits:

• Brand extensions let a marketer take a brand with well-known quality perceptions and associations and put it on a brand in a new category. Not only can marketers capitalize on brand awareness, they can also leverage off of the associations consumers know about the parent brand.
• Second, consumers who favorably evaluate a parent brand are more willing to try and adopt the brand extension than an unfamiliar brand in the same category. They trust a known brand name.
• Brand extensions can also help a firm’s stock prices. Some academic research has found that Wall Street attend to brand extension announcements and that whether they like them or not depends on how much they like the parent band.
• Brand extensions can also help consumers understand the core meaning of the brand name.

One of the principal dangers of brand extension is that the parent brand equity may be diluted. If there is a misunderstanding of consumers’ perception of the brand, it could be moved into a sector that consumers view as “inappropriate.” Quite often the parent brand will have been available for some time, enabling it to build a level of equity and trust with consumers. It will have strong credentials. Over time, its marketing has sought to build and secure these credentials within its target market. An irrelevant positioning has the ability to undermine the parent’s credentials.

TippingSprung’s second annual survey of brand extensions, produced in collaboration with marketing newsweekly Brandweek, revealed which extensions are most effective, which have potential to dilute the brand, and what makes some brands more extendible than others. Major trends in brand extensions were also uncovered.

The Top Brand Extensions.

• best overall brand extension – Iams pet insurance
• best liquor brand extension – Starbucks coffee liqueur
• best co-branding/ingredient branding – The Motorola ROKR phone with iTunes
• best extension of a magazine onto new platform – hardcover books from O, the Oprah magazine
• most overdue brand extendion – The Tide to Go stain removal pen
• best furniture brand extension – Antiques Roadshow
• best extension of a not-for-profit – National Geographic

Related posts:

1. Fast Magazine’s Best and Worst Brand Extensions of 2008 Brand extension is “the application of a brand beyond its...
2. Brand Extension – 10 principles Mentioned here before, [tag]brand extension[/tag], is the application of a...
3. 6 Types of Brand Extension I had some posts on brand extensions here before, and...

[..] unlike the Gen-Xers that preceded them, this new generation believes there are causes worth supporting, with 70% agreeing with the statement, “I would fight for a cause I believe in.”

So what does this means for brands? In a statement, Walker said, “The days of a Nike-style mega brand that dominates an entire generation may be over, but so is the enclave-ization of the teen world into stereotypical Skaters, Goths, Geeks and Cool Kids. Welcome to a world with as many different definitions of cool as there are individuals.”

The PDF copy of the report can be seen HERE (PDF, 2.6 MB)

Related posts:

1. Most Popular Brands With Teens Worldwide Teens are mostly influenced by the culture of brands. Once...
2. Top 20 Coolest Brands in UK – 2011 Aston Martin made it to the coolest brand in UK...