The success of a brand extension depends on the resources and capabilities of the business. These resources include the company’s financials, team capabilities, and key stakeholders. If resources are limited, the business can partner with another company to develop the brand extension. This decision may be influenced by preexisting connections between the two companies. However, the main goal of brand extension is to generate additional sales and generate positive buzz. Brand extensions may also help increase the overall brand equity of the business.
For instance, Snoop Dogg’s Rolling Words was not a successful brand extension. While the book did not directly promote the brand, it still drew its target audience. For a brand extension to work, it should be well thought out and align with the company’s core identity. For example, a company might expand into the grocery category and sell packaged food items. Changing the delivery method would enable the company to leverage the shifting consumer demand while avoiding losing its core audience.
The advantages of brand extension include lower introduction investment costs and increased success likelihood. Unlike new product launches, brand extensions benefit from an existing audience, and most of the existing customers will use the new complementary product. This reduces costs because the brand doesn’t need to be launched from scratch. Moreover, brand extension also allows the business to gain experience from the launch process of a new company. That’s why it’s an excellent option for a brand that has established a strong name and has an existing audience.
A brand extension can be successful if the new product is substantially different from the original product. For example, Coca-Cola’s original coke taste can be transferred to new products under the same brand. The company can also extend the brand into new markets by introducing new types of products. A great example of a brand extension in this regard is the introduction of a new line of coke products, such as Coke Zero and Cherry Coke.
The benefits of brand extension can be immense. By expanding your company’s product line, you can target new markets and demographics. This can lead to increased sales, new markets, and boosted profits and equity. Moreover, it can save the company a lot of money in marketing costs and attract consumers to purchase additional products. Additionally, brand extension helps clarify the meaning and significance of the brand name. So, make sure to choose the right brand extension strategy for your business!
Another example of a brand extension is a product line in the same category. For example, a soft drink manufacturer might introduce a juice or bottled water line under its brand name. This can encourage customers to try a new product, as their familiar brand name will lead them to the new product. Brand extension is also referred to as brand stretching. It requires careful consideration of the risks and flexibility of the brand in order to ensure the success of the new venture.