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Are Brand Extensions Good Or Bad

I Tip Peruvian Straight Human Virgin HairA brand extension can be defined as using an established brand to introduce a brand new product. The speculation is that having an established brand will ease entry into the market for brand spanking new products and will reduce the prices related to advertising do to brand recognition and the equity ensuing from that brand. This strategy can decrease the chance of failure of those ‘new’ products, because consumers will more readily accept new products launched under known symbols.

But there are quite a lot of dangers related to brand extension. Several areas have been examined where introducing a brand extension can actually hurt the brand. Introducing a brand new product can cannibalize the prevailing products under the brand or, the reputation/image, of the brand will be harmed. Four specific areas directly relate to negative impacts of introducing a brand extension are important to think about:

The extension will tend to dilute the brand image
The less fit there may be between the brand and the extension the more likely there may be to be brand deterioration

If the extension is of a lesser quality it’s more likely to harm the brand image
If the perceived manufacturing effort involved in producing the new product is less difficult the unique product the extension will harm the brand
These dangers all point to a very real potential for harm, to the present brand, that can occur when introducing new products. But does that mean companies mustn’t do it

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

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