Brand Extension
Brand Extensions
Brand extension is a marketing strategy according to which a company marketing a product or a service launches a new offering (product or service) that is related to the one of the existing brands of the company, but offers different benefits and/or targets a different segment. Organizations use this strategy to increase and leverage upon their brand equity.
When a firm is introducing a new product, it has the following 3 choices on branding: 1. Developing a new brand for the new product 2. Using the existing brand for the new product 3. Combining the new brand and the existing brand
The use of 2nd and 3rd strategy is referred to as brand extension. Brands may be classified as one of the following:
Parent Brand: If an existing brand gives birth to a brand extension, it is referred to as parent brand.
Sub Brand: When a new brand is combined with an existing brand, it is called as sub brand.
Family Brand: If a parent brand has links with multiple brands through brand extensions then it is called as family brand.
Brand Extension Dimensions
There are a large number of ways in which brand extension can be accomplished. One of the vital differences is if the extension is in the same or different category of the product. Thus they can be classified as: vertical or horizontal extensions.
Vertical extensions
Vertical extensions refer to the introduction of a related brand in the same product category but having a different price and quality balance. Vertical extensions offer the firm a quickest way to leverage upon the core product’s equity. As an extension strategy, vertical extension is widely practiced in many industries. For example, within automobile industry, the various brand models attempt to offer different price-quality bundles to attract various market segments. Often a product is extended in an attempt to just gain more of the market share.
Vertical extension direction
New product introductions using vertical extensions
Brand extension is a marketing strategy according to which a company marketing a product or a service launches a new offering (product or service) that is related to the one of the existing brands of the company, but offers different benefits and/or targets a different segment. Organizations use this strategy to increase and leverage upon their brand equity.
When a firm is introducing a new product, it has the following 3 choices on branding: 1. Developing a new brand for the new product 2. Using the existing brand for the new product 3. Combining the new brand and the existing brand
The use of 2nd and 3rd strategy is referred to as brand extension. Brands may be classified as one of the following:
Parent Brand: If an existing brand gives birth to a brand extension, it is referred to as parent brand.
Sub Brand: When a new brand is combined with an existing brand, it is called as sub brand.
Family Brand: If a parent brand has links with multiple brands through brand extensions then it is called as family brand.
Brand Extension Dimensions
There are a large number of ways in which brand extension can be accomplished. One of the vital differences is if the extension is in the same or different category of the product. Thus they can be classified as: vertical or horizontal extensions.
Vertical extensions
Vertical extensions refer to the introduction of a related brand in the same product category but having a different price and quality balance. Vertical extensions offer the firm a quickest way to leverage upon the core product’s equity. As an extension strategy, vertical extension is widely practiced in many industries. For example, within automobile industry, the various brand models attempt to offer different price-quality bundles to attract various market segments. Often a product is extended in an attempt to just gain more of the market share.
Vertical extension direction
New product introductions using vertical extensions