What is brand extension?
A brand gives a product a name and distinguishes it by giving identifiable features to it. However, as the brand gets momentum and discovers its niche, a new door opens for enterprises. It frequently takes advantage of this opportunity to introduce new items under the same brand, which adopts the exact positioning as the current item, even though they belong to various categories.
A corporation's brand extension strategy is when it makes a new product category under the umbrella of its well-known brand. This will make it so much easier to develop new commodities, fulfill the requirements and demands of consumers, decrease the cost of starting a new company and earn a better profit.
This new product or category is significantly different from the well-known original good while remaining logically tied. This makes it easier to gain initial traction by using the firm's existing well-known brand's brand positioning and brand equity.
Here are some key points to remember:
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Frequently Asked Questions (FAQs)
What are the various types of brand extension?
There are occasions when corporations want to incorporate profitable components from previous goods into new ones. They hope to capitalise on this factor and obtain comparable results. For example, the well-known brand Fanta ingredients include color, flavour, fragrance, and substance. This firm makes fruit-flavoured carbonated soft drinks in over 100 different flavours all over the world.
When a firm intends to change the form of current products to compete in a separate category, this is known as product form.
Many times, corporations are regarded to be one-of-a-kind due to the experience or extraordinary benefits they offer. A brand name frequently accompanies these benefits.
As a result, marketing experts employ the corporation’s name to compete in new markets and build brand equity.
These items complement the primary products, belonging to the same niche, and linked to the original goods. Colgate, for example, is well-known for its toothpaste and has opted to broaden its product line to include toothbrushes.
The prestige of the brand
This occurs when one firm develops a product that is unrelated to the primary firm's competence. BMW is an excellent example of this. The brand, BMW, is best known for making luxury automobiles. However, it also started in the clothing industry and makes watches.
The expertise of the company
That's when the business extends its manufacturing capabilities and develops a new item under a well-known brand name. Take, for instance, Fender, a firm known for its high-quality guitars that have expanded its expertise to include the development of earphones.
Leveraging a lifestyle
Certain businesses promote a certain type of lifestyle, which could be expressed through a way of life, hobbies, culture, or values. They have distinct characteristics that consumers can identify with. Firms could have a variety of brand personas, like sophistication, competence, and sincerity. Take Jeep, for instance. The firm promotes an outdoor lifestyle and leverages that image to market other items like bicycles, tents, and knives.
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What are the benefits of brand extension?
The benefits of brand extension are listed below:
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What are some of the drawbacks of brand extension?