Brand Extensions

Today we learned more about brand extensions, which in my opinion is very beneficial because “brand extension as a marketing strategy has become even more attractive in today’s environment where developing a new product costs a lot of money and can be time consuming” (Vukasovic, 2012).

A brand extension generally is “referred to as the strategy of using an established brand name for new products (goods or services)” (Lockhart & Ford, 2005). The greatest advantage of extending a brand probably is that brands can benefit from the reputation they already have and consumers are more likely to trust and buy the new product quickly as they relate it to the image of the umbrella brand. “This is particularly so when using an established brand to introduce a new product in a different product category” (Lockhart & Ford, 2005).  On the other hand “the greatest risk in the expansion of the brand is that there may be a fading of the original personality of the brand” (Vukasovic, 2012), when the brand extension does not meet the expectations of the customers.

A brand can be extended "horizontally or vertically" (Vukasovic, 2012) in four different ways, as shown in Figure 1.

The brand extension I have chosen for my assignment is horizontally, as I am suggesting a Private Jet Service for Four Seasons Hotels, which would be a completely new Business for them and can therefore be described as a “total expansion” as defined in Figure 1.

Figure 1

Source: Vukasovic (2012).

All in all I think that extending a brand generally is a great way to make the most of your reputation and save costs when you are trying to enter a new industry but it also has to be planned carefully and a great idea must stand behind it because nowadays nearly every brand is extending its business so we are lavished with all those brand extensions and therefore became more selective.

References:

Vukasovic, T. (2012). Searching for competitive advantage with the brand extension process. Journal of Product & Brand Management, Vol. 21 Iss: 7 pp. 492 – 498.

Lockhart, A. and Ford, E. (2005). How consumers evaluate brand extensions. Managing Intellectual Property, April Supplement, pp. 23-25.