Brand extension is the process of extending an existing brand to new products or services in order to leverage existing brand equity and create additional revenue streams. The role of brand extension in branding is multifold:
1. Building on existing brand equity: A well-established brand can use its existing brand equity and recognition to launch new products or services under the same brand name, thus increasing brand awareness and strengthening brand equity.
2. Capitalizing on customer loyalty: By extending the brand to new products or services, companies can capitalize on the loyalty of their existing customers, who will be more likely to try out the new product, given their affinity towards the existing brand.
3. Creating economies of scale: By extending a brand to new products or services within the same market or industry, companies can take advantage of economies of scale, leveraging their existing infrastructure and supply chain to reduce costs and increase efficiency.
4. Expanding the customer base: By introducing new products or services under the same brand name, companies can attract new customers who may not have been interested in the brand before, but who are now attracted to the new product or service.
Overall, brand extension plays a crucial role in building and enhancing brand value, expanding the customer base, and maximizing revenue potential for a company.
Publication date: