What are the disadvantages of brand extensions?

What are the disadvantages of brand extensions?

Disadvantages of brand extension:

• The brand may rely too much on the parent brand’s image and may not market the new product properly.
• Diving headfirst in a category or a market that is far from the core product of the brand increases the chances of failure for the new product.

What is the purpose of brand extension?

Brand extension is the introduction of a new product that relies on the name and reputation of an established product. Brand extension works when the original and new products share a common quality or characteristic that the consumer can immediately identify.

What is an example of brand extension?

A brand extension (some times called a category extension) is when a brand is known for one type of product starts selling a different type of product. Some example of brand extension are: Apple: from personal computers into MP3 players. Callaway: from golf clubs into footwear, apparel and golf accessories.

What is brand extension and its advantages?

They can help the product be easily accepted. They can also improve the overall brand image. Consumers’ perceived risk can go down with brand extensions. Since the company has established the brand name as trustworthy and popular, they can also increase the interest of consumers and make them consider a new product.

Why do brand extensions fail?

1 reason why some brand extensions fail is simple: they don’t bring enough meaningful value to the consumer. Its McPizza product flopped because consumers thought its value proposition was too similar to established competitors such as Domino’s and Pizza Hut.

Is brand extension success or failure or both substantiate?

In many cases, the brand extensions and stretching exercises have failed too. There is definitely a case for brand extensions in the market for various reasons. There is nothing wrong in a firm exploiting the brand image or brand value when they have strived to build the parent brand over a period of time.

When would you use a brand extension?

Companies may implement a brand-extension strategy when they have new products to launch but don’t want to set up a new brand. Brand extensions also have real potential for businesses who have a solid following and loyal customer base, but also want to diversify products and reach a wider audience.

What is a successful brand extension?

Brand extension is a marketing strategy that involves a company using its well-established brand name or image to introduce a new product or product categories to its customer base. This strategy works best when the new product category is related to its parent category and is something consumers and customers want.

Is a variation of brand extension?

Brand leverage is the slight variation of brand extension. The original brand is launched into segments of the existing market and then into new markets.

How do you evaluate brand extension?

Identify possible extension candidates Consumer factors when identifying potential brand extensions, marketers should consider parent brand association, especially as they related to the brand positioning and core benefits and product categories that might seem to fit with the brand image in the minds of consumers.

What are the advantages and disadvantages of brand extensions?

Consumers’ perceived risk can go down with brand extensions. Since the company has established the brand name as trustworthy and popular, they can also increase the interest of consumers and make them consider a new product. That also leads to better distribution.

What do you mean by horizontal brand extension?

product in the same product class or to a product category altogether new to the company, it is called horizontal brand extension. According to Aaker and Keller (1990), based on their focus, there are two varieties of horizontal brand extensions viz.; line extensions and franchise extensions.

What are the advantages of extending the Nike brand?

In essence, since Nike has a strong brand image and name, consumers will more easily accept the extension, as it has the same values and aspirations as the core brand Nike. By extending a brand, businesses can evaluate product category opportunities.