Brand extension is required for a company’s growth, profitability, and brand’s added reputation. It is an inevitable strategic move at some point of time in brand management.
While extending a brand, all assumptions related to that brand held for a long time are revised and the brand’s identity is redefined. The brand managers need to identify growth opportunities and increase parent brand’s value.
It is nothing but launching a product in a different category under an already established brand name. It is extending the existing brand promise with diverse products or services.
The following diagram shows the matrix of brand growth.
When a company introduces a new product, it has the following choices −
● New Brand, New Product (New Brand)
● New Brand, Existing Product (Multi-Brand)
● Existing Brand, New Product (Brand Extension)
● Existing Brand, Existing Product (Line Extension)
The last two in the above list are the types of brand extensions.