Question

When can brand extensions go successful (or unsuccessful)? Please shortly describe the conditions for successful brand extensions?

Answer 1

Brand extensions can go successful when a brand name enjoys very high brand equity so that even when it enters a new product category the consumers are able to identify with its value proposition. In such cases the brand is able to leverage its core competencies to the new product category and hence entering a new product category is a logical fit to the existing product categories. Brand extensions are unsuccessful usually where the existing brand is not able to extend its core competencies into a new product category.

The conditions for a successful brand extensions starts with the condition that the brand should have an excellent reputation and high equity in the market. Secondly the brand extension should provide tangible value proposition to the consumers so that they can easily relate the brand even in case of a new product offering. Thirdly the extension should be a natural extension and not a forced extension. When the extension is a natural extension then the existing brand reputation will be able to support the new product. This along with the trust that the brand enjoys will ensure that the consumers are able to see and gauge value in the new offering.