Quick Answer: What Are The Advantages Of Brand Extension?

What is the difference between line extension and brand extension?

Line extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes.

This is as opposed to brand extension which is a new product in a totally different product category..

How does Apple use brand extension?

Apple (AAPL) is an example of a company that has a history of effectively using a brand extension strategy to propel growth. Starting with its popular Mac computers, the company has leveraged its brand to sell products in new categories, as can be seen with the iPod, the iPad, and the iPhone.

Why is brand extension important?

Brand extensions can also benefit the parent brand by creating a greater sense of loyalty, reaffirming the brand promise and consumer perceptions of the brand, and sustaining the parent brand’s relevance in its existing category. Extensions can also help to establish a brand’s position in new categories.

What are the advantages and disadvantages of brand stretching?

It makes acceptance of new product easy.It increases brand image.The risk perceived by the customers reduces.The likelihood of gaining distribution and trial increases. … The efficiency of promotional expenditure increases. … Cost of developing new brand is saved.Consumers can now seek for a variety.More items…

What is brand extension example?

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 are the benefits of a good brand?

Here are five of the major benefits you can expect to see when you have a strong brand:Customer recognition. Having a strong brand works to build customer recognition. … Competitive edge in the market. … Easy introduction of new products. … Customer loyalty and shared values. … Enhanced credibility and ease of purchase.

What are the types of brand extension?

8 Types Of Brand ExtensionSimilar Product In A Different Form From The Original Parent Product. … Distinctive Flavor/Ingredient/Component In The New Item. … Benefit/Attribute/Feature Owned. … Expertise. … Companion Products. … Vertical Extensions. … Same Customer Base. … Designer Image/Status.

product line depth. … it is costly to maintain many product lines, and might weaken the firm’s reputation. Brand extension is a popular marketing strategy because. it separates out the cost of brand extension from brand intention.

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.

What is a category extension?

A category extensions is when an existing brand name is applied to a product category that is new to the firm. The study is conducted based on exclusively written data whereas a presentation of textual. analysis will appear.

Are brand extensions good or bad?

A brand name can fail to help an extension or, worse, can create subtle (or sometimes not so subtle) associations that hurt the extension. Worse still, the extension can succeed, or at least survive, and damage the original brand by weakening existing associations or adding new, undesirable ones.

What are the advantages and disadvantages of branding?

A company’s identity in the marketplace can easily make or break its profitability as a whole.Advantage: Awareness. … Advantage: Consistency in the Marketplace. … Advantage: Customer Loyalty. … Disadvantage: Can Become Commonplace. … Disadvantage: Negative Attributes. … Disadvantage: Pigeonholes.