Growing your brand is essential to staying ahead of the competition in today's cutthroat business environment and meeting shifting customer demands. Using an established brand name to launch new goods or services is known as brand extension, and it can be a powerful strategy for growing your company and breaking into untapped markets.
However, there are some risks associated with brand extension. If done incorrectly, it can weaken your brand and damage the reputation you've worked so hard to build. This blog post will provide some brand extension advice to help you get the most out of the process and increase your chances of success.
What Is The Brand Extension?
What is the brand extension? Using an existing name for a new product line or type is known as brand extension or "brand stretching" in some circles. While expansion allows a brand to take on new challenges, it also leverages its current brand equity to win over new customers and deepen existing brand loyalty. When done correctly, it can be a terrific way to expand your consumer base, reach new audiences, and boost sales.
But it goes beyond simply tagging an existing brand name onto a fresh product. Various forms of brand extension exist in architecture, and the mere act of utilizing the primary brand name does not guarantee the triumph of a novel offering.
Continue reading to discover how to develop compelling brand extensions, which tactics to use, and examples of successful brand extensions.
What Is Required For A Brand Extension To Be Successful?
A few key components transform a brand extension strategy from a high-risk endeavor to one that is more likely to succeed.
A Strong Brand Image
Your brand image must convince customers to purchase the new good or service you're promoting. Because they are already accustomed to the look and feel of your brand, your audience will be more receptive to new products if they are easily recognisable. They know your brand style, so they'll be more inclined to select your new product over unbranded alternatives. Make sure your marketing plan emphasizes the aspects of your brand that consumers already find appealing and trustworthy.
A Great Brand Reputation
What motivation does a consumer have to trust a new, possibly drastically different product from the same brand if they still need to get a well-known brand name? A technology company that has established a reputation for dependability and technological know-how, like Google or Samsung, can enter new markets. A successful brand extension depends on the current brand equity.
A poor product has the potential to dilute or harm your brand's reputation, so make sure that, however you decide to introduce new content, you're enhancing your reputation.
Data To Drive Your Strategy
A successful brand extension takes time to develop. To organize a project of this size, you'll need the appropriate insights. Of course, you can make corrections before launching any new brand messaging by compiling all the necessary information in advance about how your target segments will respond and what perceptions they might have.
After launching the brand extension, you should track any changes in how people perceive your brand. Receiving regular feedback at regular intervals will enable you to monitor changes as you adjust the resources allocated to the new brand initiatives.
Proven Brand Extension Tactics: Recommendations For Achievement
Select The Best Brand Extension Approach For Your Requirements
The appropriate brand extension approach will strengthen a solid brand identity and prevent brand dilution. Examining your desired outcome will help you decide which kind of brand extension to pursue.
One relatively easy way to sell to the same audience is through a vertical brand extension, like a brand line extension. If your fan base is active, current buyers will think it's okay to purchase comparable goods under the same brand. Better sales may be attained more quickly by doing this rather than creating a brand-new flagship product.
A horizontal brand extension, like an extension of company authority, can be more work. Still, it can be an excellent way for a brand to reach new markets if its current customer base has run out.
Do Extensive Market Research
There are many instances of failed brand extensions. Most of the time, brands need help with issues when they overreach their customers' trust or go beyond what is reasonable in terms of the associations that consumers have with their brands.
Colgate's attempt to enter the food industry by launching a hot meal product line called Colgate Kitchen Entrees, for instance, took a lot of work. This was probably due to the inability of a segment of the consumer base that was used to Colgate's minty cleaning products in their bathrooms to mentally switch to eating food produced under the same brand.
It might have prevented the company from launching an expensive, poorly thought-out brand extension if it had conducted preliminary market research to learn why consumers selected Colgate, what kinds of products they would be willing to try, and what types of brand experiences they valued.
Possible questions to respond to are as follows:
- What makes your brand distinct?
- What does the brand assure its clients it will deliver?
- What are consumers' opinions of your brand?
- What does the brand not offer at the moment? Which new goods would be desirable?
- How does the general public view your brand?
Refrain From Trying To Salvage A Failing Brand With It
A brand extension is a risky tactic to use when trying to revive a failing brand. When your initial traction wanes, it might seem sensible to launch something new, but it can be a costly endeavor with a high failure rate. ROI is more likely to occur if you concentrate on and optimize your current line of goods and services.
Understanding Horizontal And Vertical Brand Extensions
Businesses can use both vertical and horizontal brand extensions to broaden their product offerings and attract new clientele. Although they are both types of brand extensions, they are not the same in terms of the product or service that is provided or how much it resembles the brand's current offerings.
Horizontal Brand Extensions
Horizontal brand extension is the introduction of new products or services that are similar to the brand's current offerings but are intended to appeal to a different market segment. Compared to vertical brand extension, this kind of brand extension carries less risk. It increases the brand's presence within the same product category.
A beverage manufacturer of carbonated soft drinks, for instance, might introduce a range of flavored waters or energy drinks. In this instance, the business is using its knowledge of beverage production to target a new market segment and increase the range of products it offers.
Vertical Brand Extensions
The process of launching new goods or services that are different from the company's current offerings but connected to them through the supply chain is known as vertical brand extension. This kind of brand extension is typically riskier than horizontal brand extension since it expands the brand's reach into a new product category.
A clothing company that produces shirts and trousers, for instance, might introduce a line of accessories or shoes. In this instance, the business is using its knowledge of the fashion industry to target a new market segment and increase the range of products it offers.
Businesses aiming to broaden their product offerings and attract new clientele can find success with both horizontal and vertical brand extensions. Companies can reduce risks and improve their chances of success by knowing the differences between these two kinds of brand extensions and choosing the best one for their brand and product category.
Want More Information About Our Services? Talk to Our Consultants!
Conclusion
Brand extension can be a successful tactic for companies looking to grow their clientele and boost sales. Profiting from an established brand name allows companies to lower their advertising costs while enticing devoted clients to try new goods or services. Nonetheless, brand extension needs to be handled carefully, keeping in mind both the advantages and disadvantages.
