Top 5 Reasons to Extend Your Brand

What is a brand extension?  It’s simply a manner of leveraging the success and popularity of an existing brand name to support the launch of a new product.  For example, Nike started out selling shoes and later extended the brand into different types of shoes (i.e., line extensions) and different product categories like clothing (i.e., category extensions).   As a businessperson and marketer, it’s important to understand the reasons why extending your brand can help your company.

Kellogg on Branding includes a great chapter about brand extensions from which I extracted the following top 5 reasons to extend your brand:

1. Brand extensions can reduce the costs and risks associated with launching a new product.  Since the brand name is already known and (hopefully) popular, using that brand name on a new product (particularly when it’s in the same line as the original product) immediately communicates the same level of awareness and perception.
2. Brand extensions typically garner more shelf space than unknown new product brands.  Simply stated, retailers are more likely to stock a new product with a known brand name on it.  Again, it’s less risky, and a familiar brand comes with ready-made awareness and perceptions.
3. Brand extensions may require a lower advertising investment.  Consumers are already aware of the brand name, so advertising to create brand awareness and recognition is not necessary.  Instead, advertising dollars can be invested in more targeted messaging.
4. Brand extensions can boost the parent brand by creating increased interest in the brand as a whole and possibly growing the brand’s customer base across the board.
5. Brand extensions reduce a company’s dependency on one product which could become less popular in the future. 

Of course, the authors of this chapter in Kellogg on Branding, Bridgette Braig and Alice Tybout, point out that a brand extension doesn’t mean automatic success, but there certainly are advantages to extending your brand. 

Can you think of any other advantages to extending your brand?  Watch my post tomorrow on Brandcurve to learn about the risks of extending your brand.  [Edited to add: you can read the Top 5 Risks of Brand Extensions here.]