The new brand category can be related or unrelated to the initial product categories. If the company is already set and established, it will be in a better position to start new product lines and successfully establish brand extensions.
Brand extension can be beneficial to a business in the sense that it will maximize all the opportunities in the market. It also helps evaluate product category opportunities, lowering the risk associated with having one product line and, most importantly, measuring a brand’s appeal and relevance in the market.
What Is A Brand Extension?
We have all experienced and witnessed examples of a Brand extension, but very few people know the brand extension meaning. Brand extension refers to the use of Brand name for a whole new product or a product that is different from the parent product. You will hear some people referring to brand extension as Brand stretching.
How Brand Extension Works
From the brand extension definition, its easy to realize that a marketer wants to use the name, reputation, and popularity of a parent product to launch and market a new product with the same brand name.
For the new product to get a market share, there must be a logical association between the two products. The parent product, in this case, serves as the driver for the new product to enter the market successfully.
There’s a very high chance that brand extension may fail, especially if the new product and the parent product are not related. If the brand extension is successful, then the company has a chance to get an increased market share, an opportunity to diversify offering, and, most importantly, boost profits.
Types Of Brand Extension
After a long market search and study, it has been determined and accepted that the below are the main types of Brand extension. Lets now discuss all the eight types of the Brand extension before we head to the examples and vital steps for Brand extension success.
A similar product in a Different form from the Parent product-This is a very common type of brand extension. The company changes the form of the product from the parent product to a whole new product. Remember Barclays Bank? Now its ABSA group, an example of brand extension.
Adding different flavors, ingredients, or components in a new product-The product may be the same, but the parent product lacks some ingredients, components, or features that come with a new product. This is very popular in the electronic industry where electronics are added new features now and then.
Benefit/feature/attribute owned – There are many brands out there that own a benefit, feature or attribute that can be extended to a whole new product.
Expertise – Over time, companies gain new experiences and expertise, and so they may end up extending their brand to a whole new product after that.
Companion Products – There are some cases where the new product is a natural companion of the parent product.
Vertical extensions – some companies out there vertically extend the products they already own. Some companies can use the ingredients they have to launch new products in more or fewer forms. Take a good example with Coca Cola no sugar drinks? This is a vertical extension of what Coca-Cola already offers.
Same customer base – there are some brand extensions that represent a marketer’s effort to sell another product to the already set customer base.
Designer Image/status – some brands just convey the status and create an image for the user.
Examples Of Brand Extension
Brand extension is sometimes known as a category extension. It’s a very common practice in the market. Verily, many companies have practiced this strategy successfully, while others tried and failed. The rise of Covid-19 has also seen many companies extend their brands to cover the high demand in masks, ventilators, sanitizers, and PPE.
Try to search the market, and you will find that many detergents and skincare companies have started producing sanitizers and wet wipes for the public. Here are some examples of Brand Extension that you can check and confirm in the market today.
Coca-Cola– If you thought Coca-Cola only sold carbonated drinks, then you are wrong. The company got into a new Business of selling co*ke water Branded Dasani, Smart Water, Vitamin Water, and Dasani Flavors.
Apple– Apple is a company well known for making highly dependable personal computers and phones. Though, now you can get Smart Watches and Mp3 Players from them. This is a faultless example of a Brand extension that you can look out for today.
LifeBuoy– we have, for a long time, known LifeBuoy as a soaps company. Over time, the company has ventured into other markets, including the supply of sanitary towels and Sanitizers. Unilever owns the company, and they have just realized the opportunities in making and selling sanitizers.
Colgate– we all know Colgate for their Toothpaste Brand, but they considered Toothbrush as a new hyper helpful product line to venture in. Verily, you cannot brush your teeth without the two products. That was a fine combination.
Ferarri– How do you know Ferrari? As an automobile company with a major concentrate on a sports car? You’re right. But what if I told you its easy to locate Ferrari Theme parks? Don’t be surprised that is a form of brand extension in an unrelated product line.
Starbucks– It is known for its coffee-based beverages, but now it’s easy to get Starbucks energy drinks at the supermarket. That is a Brand extension example in a related product line.
Google– You definitely know Google as a search engine. Google recently extended the brand to hosted email services.
Sendiio– I personally knew Sendiio as an email marketing software developed to help small businesses. Now Sendiio extended to Facebook Ads, Facebook Messenger marketing, and Text Marketing.
Line Extension Vs. Brand Extension
Most people usually confuse these two terms. Brand extension is the use of the same brand name to launch a new product in a different product line. On the other hand, Line extension is the use of the same brand to launch and market a new product in the same product line. Line extension only represents an increase in a product’s line’s depth. It’s easy to realize that Line extension and brand extension are all forms of product extension, but what makes the difference is the line of product.
Vital Steps In Brand Extension
From the information shared above, it’s very easy to realize that Brand extension has a couple of benefits. Though, there are some Brand extension approaches and strategies that you should factor in to make it successful. Here are vital steps that you can take in Brand extension.
Brand Equity Measurements
All marketers know that a major risk of brand extension is causing brand dilution. This shows chances that the new product may fail and pose a negative externality to the parent product. Its wise to measure brand equity to predict and track future brand extension effects.
Risks Associated
Besides brand dilution, there are many other risks involved in brand extension. Prior to starting a brand extension, it’s important to run a scenario analysis to factor in all the positive and negative effects of the brand extension to the business and brand equity.
What Is The Business’s Core Competency?
For the new product to be a success, it should leverage all the skills and knowledge from the current businesses and management. What this means is that you’re supposed to start by identifying the business’s competitive advantage and key competencies.
Marketing research is important
Like starting a new product, its important to conduct market research to understand the strategies that this product will use to get a market share. Market research is also important in making sure that the new category has numerous opportunities and potential.
Make it a logical fit
I already stated that a brand extension could only be successful if it’s a logical fit for the brand, compatible with the existing customer base and follow the current brand story.
Brand Extension Strategy Is Equally Important
After all the above five steps, you are now at the stage to determine the strategy that you are going to use to get this new product to the market. You have to develop abrand managementplan and a go-to-market strategythat is successful. This is where brand extension guidelines must be followed to the letter.
Don’t expect the process of brand extension to be smooth. There will always be risks and uncertainty with the new product. Though, it can be easier and attract few risks if everything is done right and technical and analytical knowledge invested. Brand extension, just like starting a new product, takes time and money. Just ensure you understand your existing customers well, the current market situations, and potential risks of brand extension to your parent product.
Also Checkout:All About Brand Positioning
