Basically, a brand extension is leveraging an existing brand to promote a product in a different category. There are various types of brand extension such as product form, companion product, expertise, customer franchise and brand image type.
Types of Brand Extensions
1. Product form extension: When a brand is launched in a different form, it is line extension. If a different product form is within an entirely different product category, it will be a brand extension. For example, Amul milk extended to Amul condensed milk and Real juices extended to real juice concentrate.
2. Companion product extension: Nowadays, extensions in the form of companion products are very popular. The reason is to capitalize on product complimentary. As consumers view both products jointly, it offers scope for brand extension.
For example, Colgate dental cream to Colgate tooth brush, Gillette razors to Gillette after shave.
3. Extension of customer franchise: A product range is extended in order to meet the needs of a specific customer group. For example, a variety of products are launched for say nursery school children. Customer franchise focuses on customer base. The diverse needs of a specific customer group are satisfied.
For example, Johnson and Johnson company takes care of the diverse needs of customers by offering baby shampoo, baby talc, baby oil, baby diapers etc.
4. Extension of company expertise: Extensions take forms of different product category introductions under common name. Common expertise pool helps such introductions.
For example, Honda offers Honda cars, Honda gensets, Honda scooters, Honda lawn movers etc.
5. Extension of Brand Distinction: Many brands are unique in terms of attribute or benefit. Customers strongly associate such uniqueness with the brand. The company works backward to launch different products which are necessary to capitalize this distinction.
For example, Parachute has imbibed coconut nourishment in customer’s minds. Marico industries which have achieved this distinction may launch a variety of products.
6. Extension of Brand image or Prestige: Under brand extension, new products may be introduced into unrelated product categories. A popular brand name is used in a host of unrelated products. The name Tata has extended from salt to software. Godrej can be seen on hair dyes, almirahs, safety locks, refrigerators and electronic typewriters. These names are hundred years old now. Their long survival gives the brand name an image of high quality.
7. Distinctive taste, ingredient or component Extension: A brand may develop a close association with a combination of taste. When it is well received in the market and survives long it enjoys a proprietary association of distinctive taste. Capitalizing on these properties, the brand could be leveraged in other product fields.
For example Nescafe, Nescafe chocolate, Nescafe biscuits, Nescafe milk supplement, Nescafe Gold Coffee etc.
The logic of brand extension is to transfer a network of associations which drive consumer buying. The desired outcome is brand equity. However, brand extensions do not always create desired outcomes. The possibilities are different.
The parent brand can help the extension by providing brand associations to the extended brand. The extension also aids the parent brand by way of positive feedback. The extension may strengthen the parent brand by supporting the core associations. Sometimes, the name does not help the extension. It may even damage the brand name by creating undesirable attribute associations.
Brand extension is commonly followed by the marketer. But commonness does not mean that the extension is a shortcut to launch new products and services.