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Brand extensions, good and bad
Brand extensions are the capacity to create new product categories within a brand, which does not necessarily have to be focused on the company itself. For some business researchers they have mentioned that brand growth can be affected by an extension. Therefore, my position will be in favor of brand extensions as the main means of brand growth.
Brand extension is the best alternative for many companies to expand their horizons at a low cost. According to Kotler and Keller (2016), “the two main advantages of brand extensions are that they facilitate the acceptance of the new product and offer positive feedback for original brand and the company” (p. 325) The use of an already known brand lies in having even more confidence with customers, it also contributes to loyalty towards the brand. It is known that many people are fans to a brand so they buy everything that can offer them. Similarly, for Kotler and Keller (2016), “brand extensions allow renewing the interest and links of the brand and benefiting the extended brand by expanding its market coverage." (P. 326)
Among the examples of brand extension, Colgate-Palmolive as it is known is a company dedicated to personal care and hygiene, but a few years ago he decided to enter the home cleaning business with a first product that was lava liquid dishes which wasWell received by many users in the United States you can even find it in some Peruvian stores. That is why Colgate-Palmolive today has 4 product categories and within them leading brands in their categories and for different audiences, being successful by the brand behind it. Another example is LG, a company specialized in technology who extended within different technological categories from the first radio built in Korea, microwave, televisions, computers even cell phones both examples award that with the knowledge they had of their own more company in the market they could doGrow your company even reaching more people. In the same way they managed to reduce manufacturing costs in many of the products they produce today.
Taking into account a study by Carrasco, Salinas & Pérez (2008), people determined that the value of the brand is significant before launching with an extension, also, which consider that extensions have better results when the product is a goodor tangible, having a risk of brand dilution. On the other hand, service companies have faster and faster access to new businesses. To do this, companies must think about the brand’s values and how the extension would affect the main inclining the highest value for the benefit of the company.
In summary, the use or application of brand extensions make the company obtain greater customer loyalty and expand to new audiences causing the company to grow at a low cost of promotion, production and distribution. That is why companies that want to try to extend their brand should take into account the current value of their brand and how it can be diluted by a new product, ensure that the new product meets the standards to which its audience is accustomed. Finally, knowing that these extensions can have both positive and negative impacts to the company should be taken with sufficient care for a good impact.
- Kotler P & Keller K;(2016), Marketing Directorate (15th. Ed.), Mexico: Pearson Prentice Hall. Pp 325
- Kotler P & Keller K;(2016), Marketing Directorate (15th. Ed.), Mexico: Pearson Prentice Hall. Pp 326
- Carrasco, i. B., Salinas, e. M., & Pérez, J. (2008). Brand extensions in goods and services: evaluation and effects on brand image. Spanish Marketing Research Magazine ESIC, 12 (2), 25-43. Recovered from https: // www.ESIC.EDU/DOCUMENTS/MAGAZINES/ESICMK/100916_173436_E.PDF
- Martínez, e., Gutiérrez, t. M., & Pérez, J. M. P. (2005). Brand image measurement proposal: An analysis applied to brand extensions. RAE: Asturian Magazine of Economics, (33), pp. 89-112. Recovered from https: // dialnet.united.is/servlet/article?CODE = 2304682
- Ochoa, i. (s.f) Brand extension. Recovered from https: // www.Branderstand.com/extension-of-marca-tipos-ejampos-parameters-clave/?CLI_ACTION = 1566440611.871