Brand Extension: Strategies, Examples, and Outcomes

October 3, 2023 3 min read Marketing Business Strategy Branding Brand Extension Marketing Strategy Brand Management Product Development Business Growth

Uncover what brand extension is, how it works, including real-world examples and the pitfalls to avoid in leveraging existing brands for new products.

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Overview

Brand extension is not just about sticking your well-loved brand name on new merchandise and crossing your fingers. It’s about strategic expansion and leveraging established reputations to conquer new kingdoms—or market segments, if we’re being less dramatic.

How Brand Extension Functions

Imagine you are a popular celebrity chef; your cookbooks sell like hotcakes, and your restaurant reservations are booked months ahead. Capitalizing on this, you launch a line of kitchenware. This is brand extension in action, utilizing the sparkle of your established brand to illuminate new products.

Successful Brand Extensions

These are the star pupils of brand extension. Apple, for instance, is a brand extension whiz, deriving from the family tree of the Mac to gift the world with siblings like iPod, iPad, and iPhone each taking their share of the market spotlight.

The Missteps in Brand Extension

Not all attempts fly, though. They flop when the brand stretches too thin, like jeans trying to become formal suits. Levi’s learned this the hard way in the 1980s with the ill-fated foray into men’s tailored suits. The disconnect was too broad; customers simply couldn’t bridge Levi’s as both their casual weekend choice and their Monday boardroom attire.

Real World Examples of Brand Extension

From Boston Market’s frozen dinners, bringing their restaurant flavors into homes, to Breyers marrying Oreo into their ice cream, these examples reveal the push towards maintaining relevancy and resonance with consumer bases through thoughtful brand extension.

Criticism and Caution in Brand Extension

Opportunity comes with its risks. While lower in cost compared to launching a brand new line, extensions can dilute the original brand’s essence or worse, tarnish it. Brand guardians must tread carefully, ensuring alignment in brand ethos and consumer expectations.

Brand Equity: The value that a brand adds to a product, often reflected in how recognizable and reliable consumers find the brand.
Market Share: A measure of the portion of sales within an industry or sector that a company or product controls.
Halo Effect: The tendency for an impression created in one area to influence opinion in another area.
Product Diversification: Expanding a company’s range of products to achieve higher sales and a stronger market presence.