Brand Extension - Explained
What is Brand Extension?
Written by Jason Gordon
Updated at July 23rd, 2021
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Table of Contents
What is Brand Extension?How does Brand Extension Work? Examples of Brand ExtensionAcademic Research on Brand ExtensionWhat is Brand Extension?
Brand extension is a strategy in which a new product is launched or market using an established brand or platform. When a new category of product is launched on an existing and reputable brand, it is brand extension. Brand extension is also called brand stretching, companies use this strategy when they need to increase their brand equity. For instance, if a section of an existing manufactures a new product related to the initial bran, rather than launch or market the new product using another brand name, the company uses the established brand name.
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How does Brand Extension Work?
It is important to know that for a brand extension to be successful, a relationship must exist between the new product and the existing product or brand. Marketing an unrelated or arbitrary product using the existing brand name can lead to failure of brand extension. Brand extension is used across different companies, industries, and businesses. The reputation of the existing or established brand name is another factor that determines the success of a brand extension. But primarily, a brand extension fails when there is no correlation between the new product and the original product or both products negate each other, for instance, a perfume and a lighter.
Examples of Brand Extension
Primarily, brand extension entails offering an existing or an original product in a new form. Brand extension can be done in any form of business. Popular examples of brand extension is a brand that produces cigarette, launching its new lighter or matches using the existing brand name. Also, an eatery marketing or launching its new bar using the existing brand name is an example of brand extension. A successful brand extension often relied on a connection between the new product and the existing brand. When two popular products are combined, it is also an instance of brand extension, for example, a store selling cookies opening another store selling ice cream. Another one is coffee and cream.
Academic Research on Brand Extension
- When David met Victoria: Forging a strong familybrand, Parmentier, M. A. (2011). When David met Victoria: Forging a strong family brand.Family Business Review,24(3), 217-232. This article seeks to understand how distinctive family brands are created. Recent studies in family business have focused on the benefits for a firm to be known as family owned or family controlled. Few studies have paid attention to the distinct meanings stakeholders associate with a given family or to how that family comes to have those associations in the eyes of external stakeholders. Based on a case study of one of the entertainment industrys most successful family brandsThe Beckhamsfour practices conducive to building brand distinctiveness and brand visibility are identified.
- The undervaluation of corporate reputation as a supplier selection factor: An analysis of ingredientbrandingof complex products in the manufacturing industry, Lienland, B., Baumgartner, A., & Knubben, E. (2013). The undervaluation of corporate reputation as a supplier selection factor: An analysis of ingredient branding of complex products in the manufacturing industry.Journal of purchasing and supply management,19(2), 84-97. Prior research studies on supplier selection factors assess vendor reputation as a low ranked criterion. Reputation in these articles, however, only refers to the position in the industry, without considering the role of the final customer. Our results from a survey with 565 individuals suggest that the end user as a stakeholder should be also considered when analyzing a vendors prestige. We demonstrate that a suppliers standing has negative as well as positive reputational effects on the buyer. Depending on the relevance of the purchased good as well as the reputation of the supplier and the buyer, low/high-ranked ingredients significantly decrease/increase the final customers perception of the buyer.