What Is Brand Extension?
A style extension is when a company uses one in all its established style names on a brand spanking new product or new product magnificence. It’s every now and then known as style stretching. The process behind a style extension is to use the company’s already established style equity to have the same opinion it free up its newest product. The company relies on the brand loyalty of its provide shoppers, which it hopes will make them further receptive to new alternatives from the equivalent style. If successful, a style extension can have the same opinion a company reach new demographics, building up its purchaser base, building up product sales, and boost general receive advantages margins.
Key Takeaways
- Brand extension is the introduction of a brand spanking new product that relies on the determine and popularity of an established product.
- Brand extension works when the original and new products share a no longer bizarre prime quality or serve as that the consumer can in an instant decide.
- Brand extension fails when the new product is unrelated to the original, is spotted as a mismatch, or even creates a adverse association.
How Brand Extension Works
A style extension leverages the popularity, popularity, and style loyalty associated with a widely known product to free up a brand spanking new product. To succeed in luck, there should be a logical association between the original product and the new products. A prone or nonexistent association may end up in the opposite have an effect on, style dilution. This may occasionally even harm the mother or dad style.
Successful style extensions allow firms to diversify their alternatives and building up market share. They may be able to give the company a competitive receive advantages over its competition that don’t offer an identical products. The existing style serves as an effective and relatively priced advertising and marketing instrument for the new product.
Apple (AAPL) is an example of a company that has a history of effectively using a style extension option to propel growth. Starting with its standard Mac pc techniques, the company has leveraged its style to advertise products in new categories, as can also be spotted with the iPod, the iPad, and the iPhone.
Firms which may also be able to successfully extend their style are ceaselessly mentioned to get pleasure from the halo have an effect on, which allows them to capitalize on the positive trust customers have of their products to free up new products.
Exact World Examples of Brand Extension
Brand extension can also be as glaring as offering the original product in a brand spanking new form. As an example, the Boston Market consuming position chain presented a line of frozen dinners beneath its private determine, offering an identical fare.
Each different form of style extension combines two widely known products. Breyers ice cream with Oreo cookie chunks is a matchup that relies on customers’ loyalty to each or each and every unique producers.
Brand extension moreover may be performed to some other product magnificence. Google’s core business is a search engine, but it has an selection of choice non-advertising related services and products along with the Play Store, Chromebooks, Google Apps, and the Google Cloud Platform.
In the most productive examples, the brand extension is natural and arises from a recognized positive prime quality of the original product. Arm & Hammer produces a deodorizing cat litter beneath its style determine. Black & Decker makes a line of toy equipment for youngsters. Ghirardelli Chocolate Company sells a brownie mix. The creation of complementary products is a kind of style extension. The more than a few sorts and flavors of Coca-Cola are an example.
Grievance of Brand Extension
The cost of introducing a product by means of style extension isn’t as much as the cost of introducing a brand spanking new product that has no style id. The original style communicates the message.
Then again, style extensions fail when the product lines are a certain mismatch. The brand determine will also cast a unsightly delicate on the new product. Forward of launching a brand spanking new product, style managers wish to keep their audience in ideas and consider which products fit smartly beneath their company’s style.
An example of an unsuccessful style extension took place throughout the early Eighties when standard jeans manufacturer Levi Strauss & Co. decided to free up a line of men’s three-piece suits beneath the sub-brand Levi’s Tailored Classics. After years of poor product sales, the company discontinued the street. The company may no longer overcome customers’ trust of the brand as one associated with rugged casual placed on and now not business attire. Then again, Levi’s learned from its mistake and in 1986 introduced Levi’s Dockers, a line of casual khaki pants and other men’s apparel that has since been a relentless absolute best supplier for the company.
