Brand Extension

Topics: Brand, Brand management, Branding Pages: 3 (1831 words) Published: April 30, 2015
Brand extension & brand stretching
The two options for doing this are usually called “brand extension” and “brand stretching”. Brand extension
Brand extension is a strategy in which a firm launches a new or modified product with a well-developed image by using the established brand name in a same broad market. Organizations use this strategy to increase and leverage brand equity (definition: the net worth and long-term sustainability just from the renowned name). An example of a brand extension is Jello-gelatin creating Jello pudding pops. It increases awareness of the brand name and increases profitability from offerings in more than one product category. Unilever expanded its Dove soap brand into shower gel, liquid soap and bodywash. Brand stretching

Brand stretching refers to the use of an established brand name for products in unrelated markets. For example the move by Yamaha (originally a Japanese manufacturer of motorbikes) into branded hi-fi equipment, pianos and sports equipment. When done successfully, brand extension can have several advantages: • Distributors may perceive there is less risk with a new product if it carries a familiar brand name. If a new food product carries the Heinz brand, it is likely that customers will buy it • Customers will associate the quality of the established brand name with the new product. They will be more likely to trust the new product. • The new product will attract quicker customer awareness and willingness to trial or sample the product • Promotional launch costs (particularly advertising) are likely to be substantially lower A brand's "extendibility" depends on how strong consumer's associations are to the brand's values and goals. Ralph Lauren's Polo brand successfully extended from clothing to home furnishings such as bedding and towels. Both clothing and bedding are made of linen and fulfill a similar consumer function of comfort and hominess. Arm & Hammer leveraged its brand equity from basic baking...
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