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Brand Extension: Definition, Strategy, Failures & Examples

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  • 0:00 What Is a Brand Extension?
  • 0:49 Strategies
  • 2:15 Examples of Failures
  • 3:40 Examples of Success
  • 4:56 Lesson Summary
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Lesson Transcript
Instructor: Ashley Johns

Ashley has taught college business courses and has a master's degree in management.

Have you ever looked at a company and wondered how it could expand? What factors should be considered? This lesson takes a look at brand extension and how companies can expand.

What Is a Brand Extension?

You're standing in the ice cream aisle at the grocery store trying to choose what to buy. Suddenly, you see it. Snickers Ice Cream Bars! You love Snickers Candy Bars. Why wouldn't you love the ice cream? It just makes sense. This is an example of the concept we are going to talk about in this lesson, which explains how companies expand through brand extensions.

A brand is a distinguishing symbol, mark, logo, name, word, sentence or any combination of these, given to a group of products that are made by the same company to distinguish from others. A brand extension is when a company uses its leverage to launch a new product in a different category. Snickers Ice Cream Bars are a brand extension of the Snickers Candy Bars.

Brand Extension Strategies

Now that you understand what a brand extension is, we will discuss how to create one. There are eight different strategies.

1. Similar product in a different form from the original parent product - This is the strategy Snickers used to create Snickers Ice Cream Bars.

2. Distinctive flavor/ingredient/component in the new item - Hershey's chocolate milk uses this strategy. Consumers purchase this product because they know the taste of Hershey's chocolate.

3. Benefit/attribute/feature - Febreeze is known for smelling good. Extending into the car air freshener category made sense for this company.

4. Expertise - Honda is known for reliable engines, which made Honda lawn mowers a good move for the company.

5. Companion products - Aunt Jemima launched a pancake syrup to go with its pancake mix.

6. Vertical extensions - This strategy has the reputation of going backwards. For example, Rice Krispies are used to make Rice Krispies Treats. So Kellogg decided to offer a ready-to-eat version of this snack.

7. Same customer base - This strategy is used when a marketer knows they have a product that could be used by their current customers.

8. Designer image/status - Harley-Davidson found success with this strategy through its clothing line.

Examples of Brand Extension Failures

Strong companies can branch out into brand extensions. However, these extensions have to make sense. If a company does not have leverage in the category it wants to go into, it will likely fail. Let's take a look at a few famous brand extension failures.

Harley-Davidson perfume - If you've done much research on the Harley-Davidson brand, you know that it draws a loyal group of consumers. The company has launched a variety of products including motorcycles, clothing, wedding and animal accessories. All have been successful. Why not perfume? The problem was that consumers did not associate this brand with a good smell. Instead, consumers think of the smell of motor oil and sweat. Harley-Davidson learned from this mistake and is now focusing on its areas of expertise.

Gerber singles - Gerber found success in making small portion baby foods. When the company wanted to branch out, they decided to start making small portion adult foods. The problem was that adults did not want to eat mushy meat that looked identical to baby food. This brand extension goes down in history as one of the most famous brand extension fails.

Bic underwear - One of the most successful razor companies in the world decides to take on the underwear industry. What could go wrong? Everything! Who wants to wear underwear that they associate with razors? This didn't make sense, and it failed miserably.

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