What Is Brand Extension ? A brand extension is when a company uses one of its established brand names on a new product or new product category. It’s sometimes known as brand stretching . The strategy behind a brand extension is to use the company’s already established brand equity to help it launch its newest product.
Brand extensions can also benefit the parent brand by creating a greater sense of loyalty, reaffirming the brand promise and consumer perceptions of the brand , and sustaining the parent brand’s relevance in its existing category. Extensions can also help to establish a brand’s position in new categories.
“ Brand extension uses the leverage of a well known brand name in one category to launch a new product in a different category.” There are four types of new products . The traditional new product uses a new brand name . The flanker, line extension and brand extension all use an existing brand name .
Which of the following brand strategies is being used when the local ice cream shop decides to add a new flavor to its menu ? brand extension.
The four brand strategies are line extension, brand extension , new brand strategy, and flanker/fight brand strategy.
Extension strategies include rebranding, price discounting and seeking new markets. Rebranding is the creation of a new look and feel for an established product in order to differentiate the product from its competitors.
Doing so can be enormously profitable, but it can be dangerous, too: In the worst case, an ill-conceived brand extension may seriously damage the original product and preclude the establishment of another brand with its unique associations and growth potential.
8 Types Of Brand Extension Similar Product In A Different Form From The Original Parent Product. Distinctive Flavor/Ingredient/Component In The New Item. Benefit/Attribute/Feature Owned. Expertise. Companion Products. Vertical Extensions . Same Customer Base. Designer Image/Status.
Line extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes. This is as opposed to brand extension which is a new product in a totally different product category.
A company has a multi – brand strategy when their portfolio of products has different brands or names. For example , Nestlé has a multi – brand strategy with over 2000 different brands including KitKat and Nespresso.
1 reason why some brand extensions fail is simple: they don’t bring enough meaningful value to the consumer. Its McPizza product flopped because consumers thought its value proposition was too similar to established competitors such as Domino’s and Pizza Hut.
TO LAUNCH A TRUE BRAND EXTENSION , A COMPANY MUST TAKE A WELL-KNOWN BRAND NAME AND USE IT TO LAUNCH A PRODUCT IN A DIFFERENT CATEGORY FROM THE PARENT BRAND . Change the form of an existing product by changing its method of delivery, method of preservation, or retail placement.
One noteworthy example of family branding is that by Apple where all the products are marketed under the Apple brand . The Apple brand and logo helps customers to easily identify Apple products and instills faith in them. Other examples include Tata Group of products & Johnson & Johnson.
When a product is successful in the introductory stage of the product life cycle,? it moves directly into the maturity stage . it may start to see profits toward the end of this stage . it is most likely to begin to launch spinoffs.
How do brands create value for the customer and the firm? They facilitate purchases by making a product easily recognized, they establish loyalty because consumers begin to trust certain brands , they protect the firm from competition, and reduce marketing costs.