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Advantages and Cautions of Brand Extensions
Genevieve Northup, Editor, Germany, Premium Member
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:
The main disadvantage of brand extensions:
- INCREASE THE LIKELIHOOD OF NEW PRODUCT SUCCESS. Target markets and retailers are likely already familiar with the company and its benefits.
- 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
- 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 greatest concern when using a brand extension is that the umbrella brand is tarnished through “brand dissolution”, which occurs when the public no longer ident...