³Brand extension is using the leverage of a well known brand name in onecategory to launch a new product in a different category.´
is the use of an established brand name in new product categories. This newcategory to which the brand is extended can be related or unrelated to the existing productcategories. A renowned/successful brand helps an organization to launch products in newcategories more easily. For instance, Nike¶s brand core product is shoes. But it is now extendedto sunglasses, soccer balls, basketballs, and golf equipments. An existing brand that gives rise toa brand extension is referred to as
. If the customers of the new business havevalues and aspirations synchronizing/matching those of the core business, and if these values andaspirations are embodied in the brand, it is likely to be accepted by customers in the new business.Extending a brand outside its core product category can be beneficial in a sense thatit helps evaluating product category opportunities, identifies resource requirements, and lowersrisk, and measures brand¶s relevance and appeal.
There are several aspects of considering brand extensions:
1 Product line extension without a sub-brand as (Rasna) has various variants.2. Extending the brand with sub-brands (junior horlicks)3. Extending the brand to related categories (Liril to Liril talcum powder)4. Extending the brand to more related categories (Wipro in computers, finance, edible oil,medical equipments, soaps and baby powder)
Advantages of brand extension strategy are:-
acceptance of new product easy.
It increases brand image. b.
The risk perceived by the customers reduces.c.
The efficiency of promotional expenditure increases. Advertising, selling and promotional costs are reduced. There are economies of scale as advertising for core brand and its extension reinforces each other.d.
Cost of developing new brand is saved.e.
Consumers can now seek for a variety.f.
The expense of introductory and follow up marketing programs is reduced.
The remaining strong brand used to ³promote a new product´ makes
it less critical to create ³awareness and imagery´.