Marketing Concept | Brand Extension

Brand Extension

Once a brand is recognised in the market and in consumer minds then there is always a scope of a new product launch for the company. This gives an opportunity to the brand to leverage its brand awareness and brand equity for positioning new products even if it belongs to a different category. This concept is known as brand extension.

Types of Brand Extension

• Product Form Extension – A new brand launch of the same product in a different form but in the same product category is known as product form extension i.e. line extension. Line extension happens when companies try to add length in the product line beyond their existing range.  For example, Honda Civic Si and Hellmann’s mayonnaise with olive oil, Starbucks Frappuccino, Snickers Ice cream bars etc.

• Companion product extension – Recently we have observed as one product comes with another product. It has been quite popular these days buying these products together. These products usually complement the original products and belong to the same niche. For example, Gillette razors to Gillette aftershave, Google cloud drive to Gmail, Harley Davidson Apparel, Steinway furniture polish etc. Here the Harley Davidson apparels are related to the company’s main product bike and consumer buying them usually use them together.

• Customer franchise extension – In this type of extension company usually focuses on a certain set of consumers need and extend their new product targeting that set of consumers only. For example, Johnson& Johnson products- Johnson baby oil, baby talc, baby shampoo, baby diapers and Barbie – Barbie doll, makeup, toys, scooter   

• Brand image – This strategy consists of using established brands to launch their new products. Here, the popular brand caters to every segment and their extension has no limits, they innovate and launch new products in different categories. Such brands have had their names on the wall for 100 years and gained their own consumer base in almost every category. For example, the Tata group from software to daily needs salt.  

Advantages of brand extension

• It improves brand image
• Reduce the risk perceived by customers
• Increase the probability of gaining distribution
• Brand extension easily get starting consumer base
• Increases efficiency in marketing and promotion
• Reduce the cost of completing a whole new brand

Disadvantages of brand extension

• It can hamper your existing brand image
• It can lead to brand dilution.
• It has no advantage over competitive brands in the new category if it fails in the market to gain its place

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