Advantages and Cautions of Brand Extensions

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A brand extension is a branding technique that relies on an established umbrella brand to bring a new product to market (Kotler & Keller, 2009, p. 139). These are the main advantages of brand extensions:

1. INCREASE THE LIKELIHOOD OF NEW PRODUCT SUCCESS. Target markets and retailers are likely already familiar with the company and its benefits.
2. REDUCE COSTS OF PRODUCT INTRODUCTION. Less time and money is needed to bring a product to market because slogans, artwork, packaging and other branding elements have already been established
3. CAN INCREASE MARKET SHARE. Brand extensions may clarify benefits of brands to consumers, reach previously untapped target markets, and “renew interest” in the brand’s offerings

The main disadvantage of brand extensions: The greatest concern when using a brand extension is that the umbrella brand is tarnished through “brand dissolution”, which occurs when the public no longer identifies a brand with key products ( (...) Read more? Sign up for free

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