A company usually chooses a brand extension strategy in order to face a fluctuant market, economic condition, and brand competition.
An international case study onto 22.00 fresh launching cases shows: 82% new products uses brand extension strategy and just 15% is a real new brand. 83 % marketing directors prefer launching new products by brand extension and the other 2% prefer a fresh and new brand.
Brand extension is not a low risk option that firms think it is, however (as a marketing journal ever said), brand extension weaknesses are: New brand interest is 10f olds bigger rather than brand extension. It is because market much more curious to try the new product. Milward Brown says that brand extension advertisement just only gets 65% market awareness, it is because the market still keeps the main brand position well.
In extending a brand, a manager can choose one of brand extension strategies, such as Line extension; In this strategy a marketing manager uses his own well-known brand to extend his product line, such as new flavors, color, new size or new packing style. Eg: axe launched its new edition ie V8 edition, after its chocolate flavor. Mitsubishi launched its new Pajero sport. Brand Extension; This strategy also uses strong brand to launce new product or modified product with new categories too. Multibrand; An international retail group such as Unilever usually uses this multibrand strategy. Multibrand is a strategy in which a brand is extended into a lot of products categories. New Brand; According to Helen Wing, Marketing Science Centre director of an international research, this strategy may take a long time and probably spends a lot of financial capital in the promotion program to build its own brand awareness. It is because this strategy uses a fresh and new product. Now, you know what a brand extension is, hopefully it is useful for all readers.