Brand Extension – Definition, Advantages, Success and Failures.

Brand Extension

Brand extension is marketing strategy in which a marketer launches a new product with well-developed brand using the same brand name. Brand use this strategy to increase visibility and leverage equity.

An existing brand that develops brand extension is known as parent brand. For example, Nike dealt only with shoes but now it has variety of products like watches, caps, jackets and so on.

While there can be significant benefits in brand extension with significant failures in brand extension. With every advantage there is disadvantage.

The advantages of brand extension:

1.    It increases brand image.

2.    Cost of developing new brand is reduced.

3.    Consumers can now seek for variety

4.    There are packaging and labeling efficiencies.

5.    The expense of introductory and follow up marketing programs is reduced

The disadvantages of brand extension:

1.    Brand extension may get loss of reliability, if it is extended too far.

2.    There can be chances of damaging the image of the brand by the new product.

3.    If the brand extension has no advantage over competing brands then it may lead to failure.

Read more »