Have you ever wondered how some companies launch new products and don’t struggle to find customers for them? Successfully launching new products requires more than just telling people you have a new product; it requires strategy and proper product placement.

A brand extension strategy is how you leverage your existing consumer base and brand image to successfully launch new products. It helps you increase brand awareness and customer loyalty while also generating new revenue streams through new products.

Let’s look at why you need a brand extension strategy and how to successfully develop one.

What Is Brand Extension?

Brand extension is the strategy of using an established brand name or image to introduce a new product or product category to customers. When it’s done correctly, it’s a very effective way to reach new audiences, find new customers, and increase sales.

Read More: What is Brand Image and How Do You Measure It

The brand extension strategy helps you capitalize on the parent brand’s existing brand awareness and authority to reach new customers and boost sales. The key to successful brand extension is ensuring that the new product category is related to the parent category and is something that customers want.

So, while extending your brand can help you reach a new audience and increase sales, it only works if it’s done in a way that aligns with your brand image and values.

Apple is an excellent example of a brand that has successfully expanded its product line; it began with computers but has since expanded to include music players, mobile devices, and tech accessories while remaining in the realm of technology.

Why Is Brand Extension So Pivotal For Businesses?

Keep in mind that successful brand extension happens only when your brand has high recognition and a positive brand image. Here are some of the benefits of extending your brand:

  • Increases Company Revenue

As a reputable brand with a positive brand image, introducing new products or services can help you increase sales and revenue. People are not skeptical of your brand, so they are willing to try your new products.

You can also price your product higher than the average price because customers see value in your product and are willing to pay more.

  • It Reduces Marketing Costs

One of the benefits of brand extension is that you can use your brand’s reputation and image to promote new products and services. So you don’t have to spend as much money on brand awareness, you can focus your marketing efforts on communicating the product value to your existing customer base.

Brand extension is a resource-efficient use of existing distribution channels, supply chains, and brand assets. Your brand’s reputation and recognition also make it simple to persuade new customers to try your new products without incurring significant advertising costs.

  • Effectively Retain Customers

The brand extension helps you retain customers by providing them with all of the products and services they need on the same platform. Customers who trust your brand are more likely to try new products or services under that brand.

  • Product/Services Diversification

Adding new products diversifies your product portfolio, reducing risk and increasing long-term stability. It also positions you favorably in the market and establishes you as the industry leader for all products and services.

What Do You Need For A Successful Brand Extension?

  • A Strong and Positive Brand Image

Users need to have a positive perception of you for you to successfully expand your brand offerings. Customers who have had negative experiences with your brand are more likely to hold a negative opinion of you and not want your products or services.

Your brand image also needs to be consistent across all communication channels and customer touchpoints to prevent conflicting perceptions of your brand. Customers are likely to be skeptical of new products if your brand attributes are inconsistent.

The negative perception may not stop with the customer who has a bad experience; if the customer shares their experience online and with their network, your brand reputation could take a huge hit.

This will make it extremely difficult for anyone who reads the reviews or hears from the dissatisfied customer to become a customer. As a result, make sure that your customer experience is seamless by measuring customer satisfaction.

You should also assess your brand performance to know if your brand image is consistent across all channels.

  • Good Brand Reputation

People are more likely to try your products or services if they know what you stand for. A good brand reputation makes you trustworthy, and customers pay for your credibility rather than your product.

Brand equity is the concept that describes how companies with strong brand recognition have a larger market share than new companies. Large companies with a solid reputation rely on this phenomenon to broaden their product and service offerings.

For example, a company like Samsung can diversify its product categories because of its reputation as a leader in providing high-quality devices.

For You: Brand Equity Survey Template

  • Market Research

Before launching new products or product lines, you need to understand your customers’ needs and preferences. Knowing what your customers want allows you to align your new brand offerings with what they want.

You can achieve this by conducting a product launch survey to determine the qualities customers want from the product as well as suggestions on what to add or improve. Also, include a brand performance survey with the product launch survey to help you understand how customers see you.

Also, your market research doesn’t end when you’ve launched the new products, you still need insights on how receptive your target market is to the new offerings.

Read – Product Surveys: The Hows, Dos, and Don’ts

  • Product/Service Alignment

The new product or service should align with the core values and identity of the original brand to ensure consistency and continuity. Your brand authority and identity in your niche to position the new products to stand out in the market if the new product aligns with your brand identity.

  • Comprehensive Marketing Plan and Execution

You also have to create a comprehensive marketing plan to effectively promote the new product or service and generate sales from it.

Types Of Brand Extensions With Examples

  • Line Extension

A line extension is when a company introduces a new product within the same product category as its existing products. A good example of a line extension is PepsiCo’s introduction of multiple flavors and sugar variants of the Pepsi soda such as Pepsi Max and Pepsi Wild Cherry.

  • Brand Extension

Unlike a line extension, a brand extension is when you launch a new product under your brand name but in a different product category. McDonald’s introduction of the McCafe line of coffee products is an example of brand extension.

  • Multi-Brand Extension

A multi-brand extension is when a company uses its existing brand name to launch a new product or service but under a different brand name. For example, Procter & Gamble’s launch of Tide laundry detergent and Pampers diapers under different brand names.

  • Co-branding

Co-branding is when two or more companies partner with one another to launch a new product or service together. A good example is the partnership between Pepsi and Lay’s to launch Frito-Lay, a chip line.

  • Licensing

Licensing is when a company allows another company to use its brand name or logo to launch a new product or service. For example, Disney licenses its brand to other companies for merchandise such as clothing and toys.

Established Brand Extension Strategies

  • Choose the Right Strategy

Having the right brand extension strategy can help you avoid brand dilution and establish a strong brand identity. So, you need to carefully select the products you add to your brand, ensuring that they are consistent with your brand’s identity and values.

For example, a line extension helps you retain existing customers by providing variety. It’s a low-cost way to leverage your existing customers because you won’t have to create an entirely new product name or category.

However, if you want to leverage your brand reputation to explore a new niche, a multi-brand extension where you offer entirely different products under a different name is effective.

  • In-Depth Market Research

A major contributing factor to unsuccessful brand extension is inaccurate market research. You could launch products that your customers aren’t receptive to because you don’t know how they perceive your brand.

For example, Colgate’s attempt to enter the food industry with Colgate Kitchen Entrees was a massive flop because customers do not see Colgate as a food brand. Colgate’s Customers associate it with personal care products, so they were not ready for the brand’s shift to the food industry.

Create a brand perception survey to learn how customers perceive you and what products they would be willing to buy from you. Inaccurate market research may also be the result of survey bias, which can lead to people providing inaccurate information about what they want.

You must create well-thought-out product research surveys to avoid survey bias in your submission. For example, you should avoid asking leading questions because they may cause respondents to respond based on what they think you want to hear rather than how they feel.

  • Brand Extensions Are Not Band-Aids

If your brand’s reputation is crumbling, you may want to pause brand extension and focus on regaining your customers’ trust. Launching a new product while customers are questioning your brand image may give the impression that you are unconcerned, which is not a good look.

Brand extensions can be risky ventures, especially when you’re venturing into uncharted territory like a brand extension. You have to ensure that you are prepared to take the hit if the product launch fails.

If you can’t bear the loss of a failed product launch, consider a less risky venture such as optimizing your current products and ensuring customer satisfaction.


Brand extension strategies are ways businesses use their brand reputation and identity to successfully launch new products or services. However, brand extensions require significant and accurate market research to determine whether customers will be receptive to the new products. 

Start your strategic brand extension journey by creating a brand perception survey to learn how customers perceive your brand and the products or services they associate with it.

  • Moradeke Owa
  • on 8 min read


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