9. Brand Extension

A brand that has acquired goodwill from consumers, that has been being around for many years and is innovative with their product development and service quality may decide to extend their brand. The brand can build on their existing name or come up with a new brand name to make different or related products and enter a new market. This extension is a strategic decision that should not be taken lightly, as there are financial and human resources implications. The new product line will have to be developed, branded and marketed. In this chapter we look at how brands can use the leverage of a well-known brand name in one category to launch a new product in the same or different category. Identifying the potential for leveraging is also essential for brand managers. It is essential to know when to take the leap and commit to a financial decision. In addition, we will explore different types of extension, and the advantages and disadvantages of extensions. While brand extension may be a worthwhile business decision, we will examine some critical considerations for brand managers.