06 December 2016

Brand extension is a marketing strategy to introduce a new product with a well-developed brand using the same brand name in different product categories.

Brand use this strategy to capitalize visibility and leverage equity. A new product introduced as a brand extension may take some advantages, one of them is to increase acceptance. For example, Snickers Ice Cream Bars are a brand extension of the Snickers Candy Bars. When consumers accept the presence of a new product, they can form similar inferences and expectations about the likely composition and performance of a brand extension based on what they already know about the brand itself. The inferences may improve the strength, favorability, and uniqueness of the extension’s brand associations.

From a marketing communications perspective, the advantage of introducing a new product as a brand extension is that the company does not have to create awareness of both the brand and the new product but instead can focus on the new product itself. Besides that, a company can avoid the cost of developing a new brand. To conduct the necessary consumer research and employ skilled personnel to design high-quality brand names, logos, symbols, packages, characters, and slogans can be quite expensive, and there is no assuran ce of success.

Besides facilitating acceptance of new products, brand extensions can also provide positive feedback to the parent brand in some ways. The outcome of a successful brand extension is that it may enhance the parent brand image by strengthening and improving the favorability of an existing brand association. A successful brand extension also can increase consumer perceptions of the company’s credibility, such as perceptions of the expertise, trustworthiness, and likability of the enterprise. Another feedback that brand extensions can provide is bringing new customers into the brand franchise and increase market coverage, such as by offering a product benefit whose absence may have prevented consumers from trying the brand.

As a result, well-known existing brand names can be the way for a company to enter a new category that otherwise would be impossible. When done correctly, they also reinforce the properties of the existing parent product through synergy and bring news to the brand. It is uncommon to find sales of the parent product rising after the launch of a successful brand extension.