Brand Extensions: Is it Time to Broaden Your Horizon?
By definition, a brand extension (product or service) should offer a different benefit and/or attract another market or market segment than its parent brand. Brand extensions seek to capitalize on the positive perceptions and associations of one brand, translating them to the new brand. For example, if customers associate safety with a certain company, they may infer that any product from that company is safe. Loyal customers of a parent brand may be more willing to try brand extensions. This, in turn, may decrease the cost of marketing the new product. The extension may strengthen the parent brand as well. Notice I keep using the word "may." Here's why: many brand extensions end up disasters, draining the marketing budget and diluting their parent brand in the process. In their rush to grow, even large corporations overlook the simple fact that brands should only be extended when the new product or service addresses genuine consumer needs and is based on accurate knowled...