written by | September 28, 2022

Brand Extension - Definition, Strategy, Types, and Examples

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Table of Content


In how many ways can you use your brand? If you feel your brand has travelled beyond what it is capable of going, it could be time to think about a considered extension. In some circumstances, a brand extension may be the precise source of energy you require to expand outside your current market.

Some businesses choose to stay close to home. They focus all of their efforts on one thing that they do exceptionally well. Nike and its distinctive footwear is an instance of such a  brand. There may be numerous products by these brands. There may be many products from these firms' names and logos, but it's also true that the apples don't fall too far from the tree. But then, some businesses have embraced the idea of brand expansion to take advantage of new opportunities, markets, and consumers. Beyond the original products that initially helped to establish their name, they have increased the range of products they sell.

Did you Know? Even while brand extension seems promising, there are also drawbacks. In the early 1980s, popular jeans maker Levi Strauss & Co. decided to introduce a line of men's three-piece suits underneath the sub-brand Levi's Tailored Classics. This was an example of a failed brand extension.

What is Brand Extension?

A company cannot stay ahead in today's fiercely competitive markets if it doesn't offer its target customers anything unique. Entrepreneurs think about brand extension tactics to grow their market share, show off their creativity, and establish a new product category. It's an important step that supports their business growth and attracts new leads. 

Brands must research and evaluate emerging trends in order to properly apply this strategy. Companies use research to identify potential client's needs and want to develop products that will meet these demands. After that, they work to develop a product that will be marketed under the name of a well-known brand and continue to be in high demand.

The procedure offers firms a number of advantages. Companies boost their brand image, save money on creating a new brand, effectively employ their marketing budget, and increase their revenue. Companies can present goods that their customers like by using brand extension techniques. The strategy is well-liked today since it allows firms to evaluate their potential in new product categories, ascertain how relevant and alluring their brands are and specify the resource needs.

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Brand Extension Strategy 

As with marketing methods, brand extension strategies differ from one another. However, they all adhere to the same principle: they maximise profit by relying on their current reputation to support the introduction of a novel and untested product.

There are several brand expansion tactics, so it's crucial to understand which project will benefit the clientele. It necessitates in-depth research on the market and the new product. Customers must perceive a brand extension as being natural; otherwise, it risks alienating them and diluting the brand. With a brand extension, a well-known product's brand image, appeal, and brand loyalty are used to launch a new one. A logical connection between the original and fresh items is necessary for success. Brand dilution can happen as a result of a weak or nonexistent link. Even the parent brand may suffer from this.

Successful brand extensions help businesses expand their product lines and gain market share, and they may give the business a competitive edge over rivals who don't provide comparable goods. The established brand acts as an efficient and affordable marketing tool for the new product.

Brand Extension Types

Utilising an existing brand to introduce and market additional products is known as brand extension. It can be divided into eight categories:

Product Form Extension

Introducing the same product in a fresh format allows it to compete in a different product category. This is referred to as product form extension.

Snickers introduced their ice cream bars using this form of brand extent, and the item still belonged to a separate product category even if it had just undergone a minor form change.

Companion Product Extension 

Typically, companion products enhance the original products. They generally are directly connected to the original products and fall under the same market segment. Examples include the launch of a toothbrush by the toothpaste company Colgate. This brand extension technique is the most sought-after because it aids in boosting sales and marketing the original product.

Also Read: What Is Blogging for Business? Types, Importances and Benefits of Blogging

Company Expertise Extension

When a firm expands its knowledge and brand identity to a new product, a company expertise extension plan is put into action. The manufacturer of high-quality speakers may also use this expertise to create high-quality televisions. One such business, Sony, employed brand extension to expand the business's competence into different product categories.

Customer Franchise Extension

Customer franchise extension refers to a business expanding its brand into additional product categories targeted at a certain market segment. For instance, Johnson and Johnson create various products with the same name that are geared toward the same target market, infants.

Brand Distinction Extension

Because of the remarkable benefits or experiences they offer, businesses are frequently seen as being distinctive. These benefits are typically connected to a particular brand name. As a result, marketers exploit the names of these companies to enter new markets and increase their brand equity. Take Parachute, a term given to a number of hair products made with coconut oil. These items are made by Marico, a well-known Indian manufacturer of consumer goods that also makes other hair products.

Brand Prestige extension 

In this technique, a brand develops a product unrelated to the primary company's area of competence. BMW is a good illustration. The company began to engage in the fashion sector and make watches after being well-known as a manufacturer of high-end cars and motorcycles.

Extension by Transfer Of Components 

Brands occasionally attempt to incorporate the effective components of their past products into new ones. They work to take advantage of this component and achieve the same success. Flavour, substance, aroma, and colour are among these elements. For instance, there are almost 100 types of Fanta, a company that makes fruit-flavoured carbonated soft beverages, throughout the entire world.

Extension by Leveraging a Lifestyle 

Some companies have effectively positioned themselves as being a part of a certain lifestyle; they support a specific culture, manner of life, or set of beliefs. We refer to them as lifestyle brands. These lifestyle brands are renowned for their distinctive visual styles that buyers may emotionally connect with, such as luxury, a hardworking attitude, or an active lifestyle, rather than for any particular feature or value. To increase the scope of their offerings, they employ this positioning technique.

Consider Jeep, a well-known car manufacturer associated with an active outdoor lifestyle. The business expanded its product line to include a variety of goods, such as apparel, knives, camping equipment, bicycles, baby strollers, etc., using this "outdoor lifestyle' image as the base.

Brand Extension Examples

Colgate 

An organisation well known for its toothpaste created a new practical item, a toothbrush that is an addition to the primary product. It ended up being a fantastic combo. Colgate was able to enter the toothbrush industry because of this action.

Apple 

Apple, a well-known manufacturer of smartphones and laptops, also employed brand extension. Smart Watches, MP3 Players, Ipads and now even Apple-designed polishing cloths are available.

Starbucks 

A reputable business that is well-known for its coffee drinks and distinctive approach to each of its customers has joined the energy drinks market. The company has entered another lucrative industry by introducing a new line of low-calorie energy beverages centred on fruit juice and green coffee extract.

LifeBuoy

Unilever promotes the soap brand LifeBuoy. With time, the business expanded into new markets, such as the provision of always-available sanitisers and sanitary towels. The sanitisers from LifeBuoy are already on supermarket shelves and ready to ensure your everyday hygiene.

Ferrari 

This maker of high-end sports cars is well-known. The company didn't, however, stick to making solely pricey and opulent cars. The business made a choice to create an unrelated product line. Guests to Ferrari theme parks can experience an authentic Ferrari, get an adrenaline rush, and have fun.

Sunkist

Typically, the brand is connected to vitality, health, and oranges. The business made a choice to maximise its potential. The industry for vitamins and supplements was launched by Sunkist's development of vitamin C pills.

Dyson 

The business first produced vacuum cleaners and other home appliances before expanding to include desk lamps in its product line. Due to the popularity of the brand's old products,  new products like hair dryers, bladeless fans, and stylers are famous among young people nowadays.

Google 

Google is a well-known and popular web search engine. Nevertheless, it's not Google's only offering; the brand also covers hosted email services. In addition to offering information protection, Google Workspace enables businesses to access fantastic digital goods (like Google Drive, Cloud Search, Google Meets, and more) whenever and wherever they choose.

Also Read: Business without Investment: Effective Ways to Start a Business with Zero Investment

Conclusion:

It is crucial for businesses to stand out from the crowd with innovative products in the fiercely competitive brand landscape where companies frequently compete for the same customers and brand loyalty. What are the ingredients for a fruitful brand extension? Simply defined, businesses must develop goods that use logic and leverage to increase their market share, prove their worth, and grow their businesses.

Simply said, when you have a well-known brand that customers respect and you want to introduce a new product category, just go for it. It can help your company in numerous ways, including increasing profits, giving you the chance to serve your customers better, and enhancing your brand's reputation. 

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FAQs

Q: Why do brand extensions fail so frequently?

Ans:

When brand expansions fail, it's typically because businesses try to milk their brands or borrow them, or they simply don't focus properly on developing sufficient new consumer benefits.

Q: Why has brand extension become so popular?

Ans:

Many businesses utilise brand extensions because they may take advantage of their parent brand's power and recognition to target new markets and open up fresh sales channels.

Q: What is an example of Brand Extension?

Ans:

Companies like Colgate, Dyson, Amazon, Starbucks, Apple, and others are a few examples of well-known brand extensions.

Q: What does "brand extension" refer to?

Ans:

Brand extension refers to the launch of a new product that builds on the name and standing of an existing one. A brand extension can be successful when the original and new items have a recognisable trait or feature.

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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.