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Are Brand Extensions Good Or Bad

A brand extension might be defined as using an established brand to introduce a brand new product. The idea is that having an established brand will ease entry into the market for brand new products and will reduce the costs related to advertising do to brand recognition and the equity ensuing from that brand. This strategy can decrease the danger of failure of those ‘new’ products, because consumers will more readily accept new products launched under known symbols.

But there are plenty of dangers associated with brand extension. Several areas have been examined where introducing a brand extension can actually hurt the brand. Introducing a new product can cannibalize the prevailing products under the brand or, the reputation/image, of the brand might be harmed. Four specific areas directly relate to negative impacts of introducing a brand extension are important to contemplate:

The extension will are likely to dilute the brand image
The less fit there’s between the brand and the extension the more likely there is to be brand deterioration

If the extension is of a lesser quality it is more likely to harm the brand image
If the perceived manufacturing effort involved in producing the brand new product is more easy perfect hair collection reviews the original product the extension will harm the brand
These dangers all point to a really real potential for harm, to the existing brand, that may occur when introducing new products. But does that mean companies should not do it

There can also be much to be gained from extending, and taking advantage, of the equity developed from an existing brand. Brand managers should bear in mind that building a brand extension strategy, when supported by prime quality products, that are similarly perceived, can enhance both the prevailing brand’s image as well as that of the brand new product, and consequently, enhance brand equity. When the market environment becomes more competitive, especially in a hostile market, it may be necessary for the company to call upon existing brand recognition and favorable customer loyalties to outlive. A successful new product introduction, associated with an existing well perceived brand, can further cement that brand’s status as a leader.

There are numerous things to be wary of when introducing a new product. But, if a company has an existing, positively accepted, brand, and this product fits within its scope of influence, there must be no reason to not associate the brand new product with the existing brand.

Author Box James Stephenson has 1 articles online
James Stephenson is an IT and Business Consultant with over 25 years of experience.

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