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David Krenkel: Explaining How Brand Extensions Set Uniquely Created Brands Apart from Competitors


Knowing what strategies might fit your goals and will bring massive success by increasing profits is essential. Therefore, we will focus on brand extension and how it can be applied to maximize results.

Brand extension is one of the most popular brand marketing strategies nowadays. Let’s start with the pros. With an established reputation and well-known product lines in a specific industry, people will feel more comfortable purchasing your product by knowing the firm’s emphasis on good quality and remarkable purchasing experience. By reusing labels and marketing campaigns, they can save on costs and have a better timeline when building awareness around a new brand. If you are thinking of extending your brand, this option can help you achieve your goals faster and provide you with different avenues to achieve your short- and long-term goals.

On the other hand, if your brand is struggling, an excellent way to think outside the box might be to create a new product and focus on a vertical extension to revive your brand. It must be clear that it is meeting customers’ expectations and needs.

Brand extension brings many benefits by already having an established brand awareness or bringing valuable associations. For instance, brands can have positive associations, such as being perceived as safe and reliable. Once you are ready to launch a new product or extension, if brand loyalty is established among customers, the success rate tends to increase since it is easier to introduce it to existing customers, which are more likely to buy them. Lastly, when considering this strategy, growing your portfolio can help solidify your message further as a brand and make your mission statement and values clear for current or new customers.

An excellent example of a successful brand extension is Apple. They branched into the headphones market with their “Airpods,” and today, they are one of the market leaders in this industry. Even though this was a new product, it wasn’t too far from previous launches since it stayed in the technology sector and could penetrate the market quicker since they have established loyal customers. “Disney” has executed multiple successful brand extensions in the past and is currently working on expanding to numerous sectors. Some examples are extending the Disney brand into amusement parks or the newest extension into the streaming industry with Disney+, which has proven successful.

However, we also need to discuss risks related to this strategy. By utilizing this method, a company can damage its value. If the brand extension is unsuccessful, it can hurt its reputation and market positioning. The most important aspect is that the company must be relevant, fit the new category, and bring some extra value because, remember, not every brand belongs in every portfolio. For instance, healthy lifestyle goods wouldn’t be the most excellent fit in the alcohol industry. Yes, brand extensions can reduce costs; however, if it does not bring any value to the new category, it is better to launch a new brand in this market, such as a new liquor brand in the alcohol industry. Another risk might be cannibalization within a brand. This risk is mainly in terms of vertical brand extension. For example, if Coca-Cola comes up with a new flavor but is not bringing any new customers and results in a loss in sales due to the fact the firm introduced a new product and took away sales from the original ones. Then the brand extension is not successful as it doesn’t bring any additional profit or market share even though sales increased for the new product.

From the unsuccessful extensions, we can mention “Clorox,” known for bleaches, which tried to extend into the laundry detergent category. The association with bleaches concerned customers that their clothes might be bleached and damaged. In 1982 brand “Colgate” famous for its toothpaste, tried to extend into the frozen food category. This brand was irrelevant in this new category and became one of the biggest failures in brand extensions.

There are two main types of brand extension: Horizontal and vertical. Not every brand extension necessarily means expanding to a new product line. With the vertical extension, the brand remains in the same category; however, it can be extended to different price segments or quality within this category. On the other hand, with the horizontal extension, the brand is expanding to an entirely new category, which is what probably most people imagine behind the term brand extension.

To sum it up, brand extension is a strategy that has become increasingly popular recently, especially within corporations. Now a days, if you look in the supermarket, you will see brand extensions almost everywhere. This strategy is used by not only the most prominent businesses like Mars Incorporated, Apple, and Nestle but also by medium and small businesses. The goal would be having access to better visibility, increased connections, and more profit opportunities, which we recommend companies conduct their research beforehand.

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Company Name: American PERMALIGHT®, Inc
Contact Person: David Krenkel
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Country: United States