Establishing a new product requires time, invention, capital and R&D to generate brand identity. In such a situation, companies tend to adopt the option called brand extension. Brand extension refers to the brand management segment modifying and resisting the existing brand by creating new product classification by product development.
Most of the brand extensions were made into fulfilment due to organizations tapping into prominent aspects of their brand positioning. Similar to many other elements of branding and brand strategy, fortunate extensions primarily need a shift in consumers’ mindsets.
As a major decision of a brand, brand extension requires a lot of planning and execution. The designs and other branding elements need to be changed, and a new concept needs to be carried out. Therefore, the best method to implement your brand or product addition is approaching a professional branding agency to get the best result.
Now let’s discuss the term brand extension, different strategies, and brand extension examples of different companies who successfully manage their brands with a supplement.
What is Brand Extension?
In simple terms, brand extension is when an organization utilizes one of their entrenched brand name on a new product category. The central ideology behind a brand extension is to launch a new product under an established brand identity.
Here, the company depends on the brand allegiance of its existing customers that will create more deference to a new benefaction from the same brand.
One of the most examples of a successful brand extension is the ITC’s brand Aashirvaad Atta – the top brand in the Atta market. Aashirvaad has enormous brand equity because of its household name. With this grip in the market, the organization has extended the brand into categories such as salt, organic foods, spices, etc.
Types of Brand Extension
The different types of brand extension are:
1. Line Extension
An organization initiates a line extension on account of a well-established products brand name to pitch a new, vaguely different item in the same category. These line extensions diminish the risk related to the development of a new product.
The main advantage of line extension is that consumers will immediately realize the product name as the parent brand has an established success. That identity will help in the development of the new product.
An example of line extension is Diet Coke, a product of the parent brand Coke. Though the product has slight differences, they are in the same product category; moreover, users will recognize the product on behalf of Coke.
2. Product Extension
Product extension is the process of utilizing an established brand name for a new product in the same category resembling the product line. Organizations majorly do these to increase the sales of their famous product by offering variations.
Extending a product line under the present brand can catch the customers who have different preferences also helps in reaching the users who are already known to the brand.
For example, Colgate initially introduced paste and later developed products related to oral care, personal products etc. Hence, users who are using Colgate paste will try to use the new products as they are trusted with the quality of the product.
3. Expertise Extension
The extension can grab a deviant product category since the expertise remains consistent; consumers are confident that the new product category is also equally acquainted with quality.
The proficiency of a company extended to a new product category is called an extension of company expertise. Most of the prominent organizations follow this method and tremendously get the result from the initial stages itself.
Samsung, the most prominent electronic company, was initially established in the market with a black-and-white television. Now, it has many electrical products like washing machines, mobiles, refrigerators, etc. Another example is Sony which started as a player in Walkman is currently serving mobile phones, speakers, headphones and other extended product categories. These brands products succeed in brand extension because of the goodwill generated by the parent brand.
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4. Market Extension
Market Extension refers to the production of different varieties of products for a specific brand. These are usually mobilized in the development of consumer needs.
Another term related to the market extension is the ‘market extension merger’. It is a type of merger where two or more companies in the same trade sector combine to expand their market reach.
An example of Market Extension is that suppose an organization of garment industry that produces white t-shirts. As the business is achieved in attracting customers’ emotions, they started asking for other colors and designs of t-shirts. Thus, the organization started producing it with new structures or designs according to their needs and wants.
5. Geographic Extension
One of the prominent methods used by organizations to increase their growth objectives is with the help of geographic expansion. The firm extends its business from its original location to one or multiple geographic sites in this approach.
When a location doesn’t suit a company and realizes that they cannot expand in their current location, the demand in another market would switch their business to that location. However, it might be demanding as you need to develop from scratch, but it’s a good option for its future.
For a more significant organization, it’s another step for their growth in the market. As it contains a considerable investment, many of them create particular policies and processes before executing them in that location. (source)
Brand Extension Strategies
A good brand extension is majorly about finding the appropriate strategy for brand development. If utilized precisely, brand extensions make you spout to more significant revenue and powerful market opportunities.
1. Understand Your Brand Equity
The primary step in an efficient brand extension is to express what you’ll be building on your new offering. Brand equity is the value of a company generated from its name recognition while compared to a generic identity.
When it comes to brand extension, the main idea is that it provides you with a chance to leverage the value you have so far in your brand to initiate new products, services or strategies.
For example, if your consumers have an attachment to your strong CSR strategy, it would be an excellent option to use it while establishing your new product. Therefore, it’s essential to fetch your current value while converting it to a new extension.
2. Maintain the Core Characteristics of your Brand
Consistent is one of the most dominant constituents of a brand’s extension strategy. A lack of consistency will make your customers confused and create a negative impression in their mindset. They wondered why you introduced such a product or service that doesn’t fit with your brand.
Having consistency makes sure that your consumers can recognize your peculiar personality and values in a new contribution.
Therefore, before establishing a new product or service, enumerate your core brand characteristics. For example, you’ll tend to use the same colors, brand logo and metaphors across your portfolio. You can also prolong the same personality and modulation in your marketing.
3. Do Your Research
The final and most crucial part of brand extension is to have accurate information to ensure a victorious product extension. Ask yourself why you’re striking in this direction, and make sure you can impress people with your clarity.
Research your current customers, also new users whom you may desire to attract. Remember to evaluate your competitors also to have an idea if you are lagging in anything. Attentive planning will make sure you expand in a method that would benefit your business. It will also help you to think in a different form.
Advantages of Brand Extension
1. It creates the undertaking of new products easy:
- It enlarges the brand image.
- The risk discerned by the consumers reduces.
- The probability of gaining distribution and try-out increases. A well-known brand name increases the user’s interest and readiness to attempt a new product having an established brand name.
- The effectiveness of promotional expenditure increases. The costs of advertising and promotional activities are reduced. There are various discounts and price reductions as advertising for core brand and its expansion fortify each other.
2. There are reactive benefits to the parent brand and company:
- The image of the parent brand is intensified
- It enables to grow the market coverage as it fetches new consumers into the brand franchise.
- Customers’ relate the original brand with the new products. Therefore, they also have quality associations.
Disadvantages of Brand Extension
1. Expanding the brand name too distant may lose trustworthiness, primarily if the brand extension is implemented in an unrelated market. Therefore, organizations have to research and understand which product categories will be suitable and where they can utilize the brand name.
2. There is a risk factor while extending that the new product may lead to generate insinuation that may damage the goodwill of the parent brand.
3. When the leading brand will bestow its brand awareness to the new product, it doesn’t mean that organizations don’t have to invest at all. If they don’t work on their extension, they’ll have a negative effect that may affect the company.
4. If the competitiveness in the new classification is just fair as the brand extension, then it’s really doubtful that the extension will be a success.
Successful Brand Extension Examples
1. Snickers Ice Cream Bars
Snickers candy bars have significantly remained consistent throughout the years, both in the method, size and shape. Although there were slight variations, on the whole, it is a steady, unchanging product.
After a certain period, a significant transformation implements in the product by an extension to ice cream bars. Made with smooth, creamy peanut butter ice cream, caramel, and other ingredients shield in a chocolate shell, Snickers Ice Cream Bars was a grand entry to a new, frozen level.
Thus, they achieved in their brand extension, and now, Snickers Ice Cream bars is one of the highly demanded products in the market.
2. Gillette’s Razors & Shaving Supplies
Gillette’s extension into creating shaving products besides its razor blades was an intelligent move.
Gillette’s profound realization of men and shaving merged with a result in Gillette Fusion ProSeries, a modern line of skincare product that steer superb comfort both before and after the shave.
The combination made a new skincare line to the mass market of men’s thermal facial scrub, skincare lotion and aftershave to give comfort throughout the shaving process.
As it was almost essential for Gillette to create this harmonious good for its lead products, the brand becomes the favourite in the consumers’ mindset, and they consistently use this product for their needs.
Titan has been successfully extending its brand from watches to various other industries such as jewellery brand to eyewear and lately fragrance. Does it work for Titan as they do such brand extension?
With the Internationalization engagement, the organization helps conducts positive energy for invention and quality. Thus, it helps the companies endeavour for the best.
Titan’s brand extensions focus on consistent improvement. With the brand’s reputation and trust in the industry, people trust the brand also tend to purchase products from their new extended categories.
4. Colgate’s Toothbrush
Similar to Gillette’s razors and shaving products, Colgate’s toothpaste and brush are interrelated goods. As you need a toothbrush to use toothpaste, it was a significant step by the brand to complement toothpaste and their products.
Colgate’s brilliant move to get into the toothbrush market was essential, and it helps secure the third most prominent piece of the oral care market.
They have also succeeded in extending their category with products such as Colgate Peroxyl and Colgate Orabase. By expanding the brand experience, Colgate also enlarges the consumer experience by increasing their overall brand awareness through extra additional shelf space in the retail passage.
5. Tide Stain Remover Pen
The Tide Stain Remover Pen was a brilliant brand extension that grabs the significant benefit of Tide products and places their potency to utilize in a new item, providing consumers with an easy or convenient way to clean their clothes even without laundry.
The main success of this extension is that the brand had become popular as an efficient laundry detergent, certifying them to re-project their authority in this segment to a different item, the pen.
The product becomes very helpful especially for people travelling as it is easy to carry and use. It has also become an effective product for household usage too.
Brand extension straightens the line or classification of the product. A great pitch and experience with the core brand can form the brand extension a triumph.
For the past decades, most major brands have produced extended products with parent brands because customers humiliate brands they love and trust.
If you have any queries with brand extension or need proper guidance to move ahead, you can contact us. Our professionals will guide you and help your products to stand out from competitors. With 18 years of experience in this industry, we DesignerPeople are privileged to serve and execute the best result for your brand extension.
Author: Megha Malik
As a passionate entrepreneur and creative brand consultant with experience of 14 years in digital, branding and packaging industry, it is my honest effort to put my experiences and knowledge of industry towards readers. A chartered accountant by degree but a marketing personality in blood has motivated her to take in designing industry as a career. With her fun-loving personality and sharp branding skills, she is a great motivational speaker on her YouTube channel, an active member in various business channels offline as well as online. Do connect me personally via my LinkedIn and I love to share my expertise with you.