Posted on : 2022-10-07 02:57:05
Article : Good evening Friday Management TASK 211- To leverage their brand awareness and equity to create more revenue streams, companies extend their brands to develop new products where they don’t have any market share.
Steinfeld is mainly known for her acting chops, her singing abilities bolster her esteem as a performer and stretch her brand to more audiences and fans. Her performance was so good that it earned her a Golden Globe nomination for Best Actress. But what amazes about Steinfeld isn’t her acting prowess. It’s that she’s also just as accomplished as a singer. Steinfeld has collaborated with some of the most famous musicians like Zedd, Florida Georgia Line, and Alesso to produce three hit songs that have all reached the Billboard Hot 100 record chart. just like Steinfeld venture into music, companies often extend their brand to develop new products in industries where they don’t have any market share. These initiatives are called brand extensions, and they allow companies to leverage their brand awareness and equity to create more revenue streams.
The company relies on the brand loyalty of its current customers, which it hopes will make them more receptive to new offerings from the same brand. If successful, a brand extension can help a company reach new demographics, expand its customer base, increase sales, and boost overall profit margins. This new category to which the brand is extended can be related or unrelated to the existing product categories.
Depending on the type of customers then brands have and what they want to achieve as a brand, brand marketers need to decide which brand extension strategy is right for their company. There are five different extension strategies that could work for anyone.
Line Extension- where a parent brand launches a new product line in a category already familiar with its customers. With a line extension, brands don't have to create new categories. An excellent example of a line extension is when soft drink companies introduce new flavours to their existing drink line-up.
Complementary Product Extension- Another way an established brand can extend itself is by creating complementary products for its main products. For example, Nike, a sports brand, creates various equipment, wears, and other sport-related products that complement each other. We've also seen toothpaste companies use this type of extension for their original brand by adding toothbrushes and other oral care products as new categories.
Customer Base Extension- A company can create a branding extension for itself by launching different product categories for a single demographic. Procter & Gamble (P&G), for example, does this well with the Pampers brand. Although P&G specializes personal care products, the Pampers line focuses on making products like diapers and wipes for babies.
Brand Lifestyle Extension- Who would have thought a tequila line from an energy company would sell out within a few hours? Well, Tesla did it. And it was primarily due to the personality and lifestyle of its CEO, Elon Musk.
Brand authority extension-Samsung has a huge brand name in the technology space that allows them to launch different products in related categories with a measure of success. And because of its brand image, most consumers wouldn't mind using a new product, whether it's an air conditioner or a mobile phone.
Extending a brand outside its core product category can be beneficial in a sense that it helps evaluating product category opportunities, identifies resource requirements, lowers risk, and measures brand’s relevance and appeal. Brand extension may be successful or unsuccessful.
Post your perceptive comments of brand extension that you might have experienced in your career or come across as point of interest in general brands observation. In our Good Morning Monday Management solution for TASK 211 we shall offer you few brands expansion successful or failure examples on Oct 10th 2022.
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