Dove is a well-known hair and skincare brand, popular for manufacturing women’s skincare items like soap, body washes, bars, etc. While initially catered toward women, it introduced a range of products for men under the name ‘Dove Men+Care’ in 2010.
Since the company was already involved in skincare products, launching a men’s product category transformed Dove into a multi-billion dollar giant.
This is a classic brand extension example – businesses leverage their brand awareness and authority to expand their clientele and open new sales channels.
In this blog post, you will learn more about brand extension and see a few clever examples to learn how you can do it, too. We’ve also shared some poor examples of brand extension, and why those campaigns didn’t work.
Table of Contents
What Is Brand Extension?
Brand extension is a marketing strategy wherein a company creates a new product category under its brand name.
Typically, brand extensions are used by well-established organizations to launch a new product or product category for their customer base.
When the newly launched product category is related to the company’s parent category, it helps brands earn greater profits, reduce costs involved in launching a new business, and meet customers’ needs.
Types of Brand Extensions
Let us take a look at the different types of brand extension strategies.
#1. Product line extension
A line extension is a form of brand extension when a parent company or brand launches a new product line that is similar to or adjacent to the existing category of products.
As a result, companies don’t have to create a new product line and can expand their customer base by adding to their already existing product categories.
An example of line extension is when an ice cream brand introduces new flavors to its existing lineup.
Other examples include adding new scents, colors, and sizes to a product line.
#2. Complementary product extension
In complementary product extensions, brands add products that complement their existing range of products. For instance, sports brands sell cricket bats and balls together as complementary goods.
Or, activewear brands selling swimsuits with head caps, which boosts sales.
An example of a complementary product extension is Speedo, a well-known swimwear brand. Speedo sells swimsuits as well as complementary wear, including swimming goggles, swim caps, and bathing suits.
#3. Customer base extension
Although brands mainly extend their product line by adding new goods to the same category, some do so by targeting a specific demographic. This strategy is known as customer base extension.
For example, Johnson and Johnson, a company that sells pharmaceutical and consumer packaged products, extended its brand to sell goods that specifically cater to infants. Known as Johnson’s Baby, the brand sells baby wipes, baby powder, baby shampoo, hair oil, and so on.
#4. Company authority extension
Brands that use company authority extensions usually have high authority in their field or industry. As a result, they are able to create and invest in products and services that are diverse.
The Tata Group is a good example of an organization that applies for company authority extension. The company has invested in multiple sectors, including consultancy, automobiles, aviation, jewelry, apparel, hospitality, and so on.
#5. Brand lifestyle extension
With a brand lifestyle extension, companies aim to create a culture or community around their brand. This marketing strategy lets you use your brand community and offer them new products even if they are not related to the original product of the parent company/parent brand.
Typically, organizations use celebrity endorsements or influencer marketing to promote their products.
An example of a brand lifestyle extension is that of Tesla, an American automotive and clean energy company. It introduced a tequila line, and the company sold out its tequila within a few hours.
Benefits of Brand Extension For Your Business
Here are some reasons why you should consider brand extension as part of your marketing strategy.
#1. Helps capitalize existing brand assets
In certain industries, barriers to entry are high. Factors such as high initial capital and regulations might make it difficult for someone to launch an enterprise in a field with such barriers.
This allows existing firms to attain growth and expand their clientele by capitalizing on existing brand assets.
It includes offering unique products or services, targeting the right audience, building a competitive and efficient business model, and creating a business logo or tagline that resonates with your brand.
#2. Economies in promotion and advertising
One of the biggest advantages of brand extension is that it helps businesses save costs. They need not launch a new brand if they want to introduce a new product line or extend an existing product category.
Instead, they can expand their product line under the same brand name. As a result, companies save money on promotion and advertising and the capital they would have required to start a new brand.
#3. Provides instant recognition
Typically, brand extension strategies are used by big and well-established organizations. Such brands enjoy a positive reputation and a significant market share.
Thus, when they launch a new product category or extend an existing one, the new products will be received positively by the public, due to the brand’s reputation.
#4. Increases the probability of success
In an increasingly competitive world, brands can only survive if they offer something unique to their audience. With more and more competitors entering the market, brands must find ways to ensure consumers keep buying their products.
As a result, brand extension becomes inevitable. By launching new products or services, brands can assure sales, without the need to invest in developing a new enterprise.
This increases their probability of success and helps them widen their customer base.
What Makes a Successful Brand Extension?
A successful brand extension strategy involves three key elements which, when worked on together, can make the process from a dicey hit-and-miss to a solid hit.
Here is a brief overview.
#1. Building a compelling brand image
Your brand image is everything.
When you are building a brand extension strategy, it is important to ensure that you have built and continue to build a strong, credible brand image that resonates with the audience.
When you introduce a new product into the market as an extension of your brand, customers will trust and buy your products based on your brand identity.
When you have built a reliable brand image, a customer will most likely choose your new product over other non-branded ones. Brand image and identity are key to ensuring your new brand extension strategy hits the right audience, eventually making it successful.
#2. A strong brand reputation
Yes, you have done all the hard work and built a good brand image. What is the guarantee that after the initial buzz fizzles out, your brand image stays on top?
Brand reputation is the maintenance of the brand image that you worked hard to build. If you do not have a strong reputation, your brand will take a backseat even if you have quality products and services.
In the case of brand extension, when you are expanding into a new venture or market, it is your brand recognition that will precede the actual quality of the product with existing and new customers.
The established brand name will lay a strong foundation for the brand extension.
Another point to add is that brand reputation is easy to break and hard to make. As you expand your business, ensure that you build your reputation as you move forward.
#3. Strategy backed by data
A brand extension is no easy feat. It requires colossal effort and resources. One way to ensure your brand extension strategy doesn’t crumble at the first hurdle is to have data and insights in hand supporting your end goals.
By collecting all the necessary information and projections, you will be able to understand and adjust your brand extension strategy as you go to support your target.
Once you have launched a successful brand extension, keeping the data collected and tracking them to measure how the brand image has changed, what are the current projections and how better to dial up your resources will help you exceed expectations.
Keeping these pointers in mind, let us now see what a successful brand extension looks like.
8 Amazing Brand Extension Examples To Learn From
Here are some of the best brand extension examples to get you inspired.
Armani is an Italian luxury fashion house that designs and retails haute couture, accessories, and home decor. Today, however, Armani is not limited to apparel alone. It has diversified into the beauty and hospitality industries and boasts a range of fragrances, makeup, and hotel and restaurant chains across the world.
Further, Armani also has its own floral creation and chocolate brand. The brand is an example of company authority extension since it has invested in sectors unrelated to its parent product.
Moreover, the brand name ‘Armani’ ensures the success of the products.
Disney is an American mass media and multinational organization headquartered in California. Although synonymous with creating iconic animated movies and TV shows, Disney also offers products that help create a community around the brand.
The company sells apparel, toys, and other accessories and is known for its amusement parks worldwide. Disney is an example of a brand lifestyle extension since it attracts customers through its brand name to sell unrelated products.
While Amazon originally started as an online bookstore, today, its operations have extended beyond it.
Amazon now sells all kinds of products on its eCommerce platform. Using the brand name to extend its services, Amazon now has a significant market share in cloud computing, online advertising, video and music streaming, and even artificial intelligence.
Mars is an American confectionery manufacturer specializing in chocolates, pet food, and other products. Though mainly known for the iconic Mars chocolate, the brand extended its line into ice cream bars and chocolate spreads with the same taste as the candy bars.
Hence, people could now enjoy Mars in different ways, like chocolates, ice cream, and bread spreads.
Gillette is a US-based brand that primarily sells only safety razors and shaving products for men. Initially, the brand only catered as a skincare brand for men. But Gillette later introduced shaving products for women under the name ‘Gillette Venus.’
This is an excellent example of brand extension as Gillette managed to expand its customer base by targeting the female demographic and creating shaving products customized to their needs.
6. Costa Coffee
Costa Coffee is a British coffeehouse chain with stores around the world. The brand is synonymous with selling hot coffee of various kinds.
However, the coffee brand expanded and diversified into energy drinks, milkshakes, and cold coffee. This helped it target customers who were always on the move and did not have the time to sit or wait in queues to get a fresh cup of coffee.
Titan is an Indian company specializing in fashion accessories such as eyewear, watches, and jewelry. Initially known as Titan Watches Limited, the brand later diversified into selling eyewear, perfumes, bags, and wallets.
This is a form of line extension since Titan focused on extending its parent product category into other types of fashion accessories.
Dettol is a UK-based disinfectant and antiseptic soap brand popular in India. It makes for one of the best brand extension examples – it has launched several disinfectant products within the same category.
Today, Dettol has smartly extended its product line into handwash gel, bathing soap, hand sanitizer, liquid detergent, and floor cleaning liquid.
5 Brand Extension Disasters and Why They Failed
In this section, we are unraveling some of the unsuccessful brand extensions, some by even famous brands, and how we can learn from their mistakes.
Not every brand extension strategy will be a sure hit; here are some of the significant mistakes in marketing history.
#1. Colgate and Kitchen Entrees
Whoever thought it was a good idea to pair the world’s famous toothpaste with food was wrong.
The idea behind this brand extension campaign was to introduce a ‘Colgate meal’, an entree, after which you could brush your teeth with Colgate toothpaste.
Why didn’t it work?
The issue with this brand extension idea was that people were reminded of eating toothpaste, rather than the hot meal that was offered. This failed brand extension never left the USA, fairly so.
Stick to your niche and do not venture out on uncharted waters. Brand association should be the core of your product line extension.
#2. Levi’s Classic Suits
Introduced in the early 1980s, Levi, which already had a substantial share of the target market for casual, rugged clothing lines, sought to expand into a new style of market, Tailored suits.
Tailored suits were an emerging market and Levi’s wanted to expand their brand through this niche and sustain their rapid growth rate. Not a bad idea at all, but here is why they failed.
Why didn’t it work?
The core identity of Levi as a brand was rugged and outdoor casuals. This was in direct conflict with tailored classics on the opposite side of the spectrum.
The customers associate Levi’s for its durable line of clothing, which can be used for a rough, outdoorsy lifestyle. This made the tailored suits a failure.
Even though Levi’s was heading in the right direction by seeking to expand, the product introduced was in direct conflict with its core brand identity.
Consumers associated Levi’s with one section of clothing: durable, adventure-type clothes that would be ideal for rough and tough wear. Tailored suits were exactly the opposite; hence, it was a massive failure.
#3. Arm & Hammer Underarm Spray
Arm & Hammer has successfully established a brand that is associated with a range of cleaning products, from laundry detergents to cat litter neutralizers. One product that did not hit the mark was the new product line of underarm deodorant spray.
This product line extension was a massive failure as the brand perception is associated with ‘heavy-duty’ cleaning products.
Why didn’t it work?
Arm & Hammer has a successful product line with a range of cleaning products. It is well-established in this niche. The issue here is, a chemically heavy cleaning brand and a sensitive body part did not gel well.
Even the product packaging reminded customers of a chemically heavy cleaning product. It just did not deliver. This led to a failed brand extension.
Arm & Hammer, which is known for making excellent cleaning products, just did not hit the underarm deodorant market. The customers could not picture themselves using a product by a heavy-duty cleaning brand like Arm & Hammer.
When it comes to brand extension, it is key to stick to your core brand identity and move in the same direction.
#4. Pillsbury and Its Frozen Microwave Popcorn
This is a classic example of a great idea but poor execution. Pillsbury is a brand associated with a range of easy-to-make food products.
When they introduced frozen microwave popcorn as a new product line extension, it failed to compete with the likes of Orville Redenbacher and General Mill’s Pop Secret.
Why didn’t it work?
The product proposition of offering frozen popcorn did not seem valuable compared to other fresh popcorn alternatives offered by competitors.
Think about it – why would you have frozen popcorn when you can have fresh popcorn right off the bat?
This frozen popcorn idea, if pre-positioned in a better way as an alternative to fresh popcorn, could have hit a chord with the audience.
The only thing missing in this brand extension campaign is, evidently, a lack of market research. They could have prevented this product line extension failure if they had adequate knowledge of the target market and studied their customers and competitors.
#5. Instant Mashed Potatoes and Cadbury’s
Chocolates and mashed potatoes? A match made in disaster heaven!
Cadbury is known for its high-quality chocolate products. They started introducing low-end food products such as instant mashed potatoes as a brand extension strategy.
While this extension as an individual product line succeeded, the brand’s reputation for finer chocolate weakened.
Why didn’t it work?
Even though the instant mashed potatoes were a commercial success, the main flagship chocolate products wavered. The reason was that the low quality of the food products got associated with Cadbury, making the brand lose credibility and trust.
If you are a brand known for high-quality products, it would be a huge mistake to introduce new products that are of low quality. Over time, brand recognition and credibility play a bigger role than short-term success.
The Connection Between Brand Equity and Brand Extension
Brand equity is the value that is associated with a brand name in the minds of a consumer. A company creates brand equity over time with products that are recognizable, memorable, and of higher quality, and the brand in itself is highly reliable and credible.
Brand equity is what differentiates a high-quality and established brand from a generic equivalent. The image below perfectly depicts what brand equity constitutes.
A company with higher brand equity will ensure that customers willingly pay a higher price for their products and trust the brand over the competitors.
Now, how is brand equity tied to brand extension?
The core of a brand extension strategy is to build on what is already a solid foundation. This means utilizing a company’s well-established brand equity to help expand the brand.
With a new product line extension, a brand relies heavily on customer loyalty with existing clients and brand identity for new clients. Both of which are part of brand equity.
According to a survey by Oberlo, 46% of consumers would pay more for brands they trust. Before extending your brand, it is important to establish brand equity and what the core of the brand is.
The next phase would be to analyze which part of the brand image is beneficial for the new product or service. Another key is understanding how the new product would add or subtract to the brand equity. Combine this with adequate market research and projections, you will have a strong brand extension strategy.
Brand extension helps businesses expand their clientele by introducing products and services that meet customers’ needs. These brand extension examples show how well-established companies use it to target a wider demographic and can either be related to or different from the parent product category.
Brand extension is an efficient marketing strategy, allowing companies to launch new products under the same brand name. It saves the trouble of spending money on branding and helps businesses grow their revenue further.
Additional content by Haripriya