Brand Extension

According to AllAboutBranding.com, brand extension is

“the application of a brand beyond its initial range of products, or outside of its category. This becomes possible when the brand image and attributes have contributed to a perception with the consumer/user where the brand and not the product is the decision driver”.

Brands exist for the long-term. They establish trust in consumers’ minds. They are a company’s most valuable assets and they should be treated very carefully. Every change to the brand should be viewed in terms of its long-term impact on consumers.

Brand extension is certainly a way in which the brand can be made much stronger but it also has the potential to dilute the brand equity or cannibalise sales of the parent brand. Too much brand extension that we see nowadays could be viewed as indicative of poor brand practice. Clearly brand extension is an area that has to be approached with a degree of caution. The maintenance of long-term brand health is of paramount importance and should never be sacrificed for short-term advantage when there is pressure to deliver.

www.brandextension.org is presenting eight major types of brands extensions:

  • Similar product in a different form from the original parent product. This is where a company changes the form of the product from the original parent product.
  • Distinctive flavor/ingredient/component in the new item. When a brand “owns” a flavor, ingredient or component, there may be other categories where consumers want that property
  • Benefit/attribute/feature owned. Many brands “own” a benefit, attribute or feature that can be extended.
  • Expertise. Over time, certain brands may gain a reputation for having an expertise in a given area. Leverage can be achieved when extending into areas where this special expertise is deemed important.
  • Companion products. Some brand extensions are a “natural” companion to the products the company already makes.
  • Vertical extensions. Some brand extensions are vertical extensions of what they currently offer. A brand can use their “ingredient/component” heritage to launch products in a more (or sometimes less) finished form.
  • Same customer base. Many brand extensions represent a marketer’s effort to sell something else to its customer base.
  • Designer image/status. Certain brands convey status and hence create an image for the user.
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