With the extreme competitive landscape, brands are always looking for new, creative ways to increase their customer’s base, and maximize revenue. Brand extension is the practice of using an existing brand name to promote new products/services in the same or a different category. This strategy presents both opportunities and challenges. In this article, I will be going over two of the brand extension strategy’s best practices to gain positive outcome.
Identify Brand Values: Understanding the brand’s core values, mission, and differentiating characteristics is essential before starting planning for the brand extension strategy. When planning for brand extension strategy for new products/services through new or existing category, all messages must be consistent with the parent brand’s values. This helps to build customer trust and prevent customer confusion. For instance, creating moments of happiness and refreshment is one of Coca-Cola’s core values. The brand has successfully been able to utilize brand extension strategy through offering new products within soft drinks category such as Diet Coke and new product in new category such as SmartWater.
Brand Relevance: The brand extension for new products/services with new or existing category should be relevant to the current brand’s offering. It is important to keep that in mind that a technology company may not extend its brand products/services to clothing, because there is no connection between technology and clothing and customer will become confused. Make sure the extension makes sense in relation to the existing brand. For example, Apple is known as an innovative technology brand. It has extended its brand from offering computers to new products with different categories such as iPhones and AirPods. Also, the brand has extended its offering from products to new service category such as Apple TV and Apple Music. This brand extension has a connation between technology & innovation and the products/services offered by the parent brand.
Brand extension appears to be a powerful strategy, but when planning for it, certain factors must be taken into account, such as identifying the brand’s values and ensuring brand relevance. A smooth extension strategy is ensured by comprehending a brand’s core values, as shown by Coca-Cola’s dedication to happiness and refreshment. Similarly, Apple’s expansion from selling computers to offering product categories and services upholds a strong connection to their core identity of innovation. By adhering to these principles, brands can successfully expand, strengthen their connections with consumers, ensuring long-term success in a constant competitive market.