What is Brand Extensions?

 
Brand extension is a strategy used in marketing. A company which is
already branded in the market with a pre-defined image will make use of
the same brand name to market a different product category. By using
the new product category linked with the existing brand name, the market
reach of the new product can be made easy. Since the market is already
aware of the existing products that are associated with the brand, the new
product will reach out faster to the customers.

When a new brand is combined with an existing brand, the brand extension
is called as sub-brand.

An existing brand which gives rise to a brand extension is called a parent

brand. In a scenario, when the parent brand is already linked with many
products through many brand extensions, then it is called as a family
brand.

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environment

When the customers of the existing product have greater values of the

product, it is likely that the customers will accept the new business.

Brand extension strategy

Let us discuss few of the methods of creating a brand extension:

 A similar product can be formed into a different form from the original
parent product. For example, snickers created into snickers ice cream
bars.
 Having a different flavor, component or ingredient to the existing
product to create a new product. For example Hershey’s chocolate
milk.
 Adding a new feature or benefit to the existing product. For example,
Febreeze is a brand that caters to household odor. It extended the
product to car air freshener which made the good impact on the
business.

Types of brand extension

Brand extension can be categorized into the following:
1) Line extension

When the same brand is used to launch a product in a different way it is

called line extension. Byline extension, the product will be a slight variation
to the existing ones. For example, Amul launched condensed milk which is
an extension of milk; head and shoulders launched many shampoos that
cater to different hairs. It can also indicate the resizing of the product. For
example, Tropicana juice that comes with long and small packs.

2) Product Extension

When the company launches an entirely new product it is called as the

product extension. For example, Colgate Company which first used to
make paste later started launching many products related to oral care,
personal care etc. Hence customers who were already using Colgate paste
will tend to use the new products as they are already aware of the quality of
a product.

3) Extension of customer franchise

Based on the customer group, the product range is extended. This type of
extension basically targets a specific group of customers. For
example, Johnson and Johnson’s company mainly focuses on products
that are specific to babies like baby shampoo, powder, soap etc.
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4) Extension of company expertise

Based on the expertise of the company, the company launches product

category that makes use of the same name. For
example, Samsung launches many products likes washing machine,
mobiles, refrigerator etc.

5) Extension of brand distinction

There exist many brands that are unique with respect to the benefits.
These brands are mainly highlighted with respect to the benefits that they
offer to the customers. For example, Dhatri oil has been imbibed in
customers for its herbal nature that reduces hair fall and improves hair
growth.

Brand extension need not always be a success. It can lead to some failure
brand extension. Let us consider some examples.

Example where brand extension is success

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1. Consider the brand Dove. It was mainly known for soaps. But now it
is extended to many products like shampoo, deodorant and body
 wash. The brand extension of the dove for the new products has been
a great success.
2. Consider Adidas.The company started its brand of shoes. Later they
launched many products related to footwear, clothing, accessories,
and sports.
3. Consider Titan. The company started its brand for watches, later
positioned itself into the Titan house of jewelry, watches, eyewear and
leather products.

Example where brands extensions is failure

1. Colgate Kitchen items – This brand extension was a failure as it was

not accepted to associate Colgate with meal as it was associated with
oral and personal care.
2. Consider new Coke. Coco-cola could not become successful in case
of Coke.
3. Rasna Ltd is one of the famous soft drinks. When it tried to change it
product to its fizzy drink Oranjolt, it could not succeed.

Advantages of Brands Extensions

Brand extension has the following advantages:

 Easy acceptance of the customers for new products

 The customers will already be aware of the existing products that are
linked to the particular brand. Hence the risk perceived by the
customers regarding the brand will reduce.
 It can increase the brand image. Brand image is the customer’s
current view about the brand.
 When the brand name is good, it can increase customer interest and
readiness to buy new products.
 The cost involved in advertising, selling and promotions will be less
as the brand is already well known in the market.
 Cost involved in developing the new brand is avoided.
 Enhancement of brand visibility
 When new products are launched to the parent brand, the parent
brand gets recognized more and its visibility in the market is
enhanced.
 It also gives more energy to the brand. There arises clarity in the
brand when many new products are launched under the parent brand.
 The market coverage is extended as new customers will enter to buy
new products.
 Provide a source of energy for the brand
 The new product can increase the frequency with which the brand is
linked with good quality.
 Moreover, the customer can also see the brand name quite often and
the perception of the brand can be strengthened.
 Defensive strategy
 The brand extension can help the brand fight against its competitors.