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Although Hailee Steinfeld is mostly recognized for her acting prowess, her singing skills enhance her value as a performer and expand her fan base. Similar to her foray into the music industry, businesses frequently expand their brands to create new goods in markets where they lack market share.

These programs, known as brand extensions, give businesses the opportunity to increase revenue streams by utilizing their existing brand equity and awareness.

This post will explain what a brand extension is in more detail and provide you with some examples of creative extension concepts.

What is a Brand Extension?

Brand extension is a marketing strategy that involves a company using its well-established brand name or image to introduce a new product or product category to its customer base. This strategy works best when the new product category is related to its parent category and is something consumers and customers want.

Many companies use brand extensions because it allows them to leverage their parent brand’s brand awareness and authority to reach new demographics and open up new sales channels.

One company that does brand extensions well is Apple.

Although Apple started as a technology company that makes only computers (Macs), it soon extended its product line to include music players (iPods), mobile devices (iPhones), and tech accessories (Apple Watch and Earpods). Even though all these new products are different, the extension works because Apple didn’t drift too far from its parent product category.

Instead, it leveraged its brand name to make penetrating the market a success.

What Are The Types of Brand Extensions?

Not all brand extensions have to do with the introduction of a new product; there are some effective brand extensions that can be used to support an established brand.

Let’s examine a few instances.

1. Product Extension

Product extension is when a brand releases new products separate from what is currently being offered. Successful companies want to avoid tarnishing their brand loyalty with current customers, so a product extension will often be a secondary product to what is already out there—such as Apple releasing watches compatible with only their smartphones.

Product extension is viewed as a low-risk, low-cost way to meet the needs of different customer segments and attract buyers who may have different preferences. Potential drawbacks of product extension lie in the possibility of over-saturating the market or running the risk of a lesser-received new product undermining the quality expected of the brand.

2. Line Extension

Line extension refers to businesses offering an extension to an existing product line. For example, Coca-Cola has released varying flavors of its traditional cola flavor products such as cherry, vanilla, zero, etc. These are extensions of a current line of products rather than an entirely new product—this is an example of line extension.

Line extension can be a successful strategy as it can create a larger shelf presence for already established brands. A risk associated with the strategy lies in market oversaturation. Too many similar products on the same shelves can be overkill to customers, and if not deployed intelligently, line extension can cause such an effect.

3. Customer Franchise Extension

Customer franchise extension—also known as customer base extension, is when a brand uses its already established and loyal customer base to launch products beyond its current product category that still target the same group of customers.

This strategy allows a company to expand its product inventory with a greater chance of success due to the trust that’s already been developed with a specific demographic. For example, Nike offers athletic wear and shoes for almost any sport. Customers who know and trust their tennis shoes are also more likely to trust their soccer cleats—a perfect example of leveraging brand loyalty. Customer franchise extension still comes with risks. If a new product is less well-received, it may run the risk of tarnishing brand identity and customer loyalty.

4. Company Expertise Extension

Company expertise extension is where a company utilizes a known aspect of its brand or specific area of expertise to create a related product category. For example, vacuum company Dyson—known for their innovative design and high-quality products, has now announced the release of air-purifying headphones. This is a great example of an established and successful company leveraging its expertise to build excitement around a new product release.

When exploring this form of marketing and product release, it’s also important to focus on maintaining brand identity, as that’s ultimately what will act as the firepower behind sales.

5. Brand Distinction Extension

Brand distinction extension is when a company known for its specific benefits or qualities leverages its prowess to serve different industries using the same competitive advantages that brought its initial success.

Read Also: What is Brand Architecture?

One way a company can do this is by offering its products to a new demographic or customer base requiring a certain product based on their geographical location—such as selling moisturizer or hand cream to an area that sees a much drier climate.

6. Lifestyle Leverage Extension

Brand extension via leveraging a lifestyle occurs when a culture is created for consumers that revolves around a set of values or interests. Customers who are supporters of certain hobbies, sports, or lifestyle choices are going to flock toward a brand that centralizes around them.

A perfect example of this form of extension comes from the outdoor adventuring company, REI. REI has successfully built a brand image around what it’s most passionate about—the outdoors. Due to effective marketing, a strong brand identity, and a plethora of tried and trusted products, REI has built a customer following that few companies can rival.

Once a company has created a brand image constructed through leveraging a lifestyle, it can expand to offer further products that help its customers embody that lifestyle. This helps create a larger product line, while also forging a stronger brand identity.

Building a Successful Brand Extension Strategy

Now that we have an idea of what a fruitful brand extension strategy looks like and can accomplish for your company, it’s critical to know how to plan ahead and steer clear of any potential pitfalls.

Let us examine eight essential actions that will enable you to execute a strategy that will make other brands envious.

1. Evaluate your brand equity

Before you put pen to paper and really start planning your strategy, you’ll have to survey whether your brand is in a strong enough position to be able to sustain any changes or additions. You’ll also need to establish what your strengths are, how you will preserve them, and how they can be built on in your strategy.

It’s difficult to progress without ensuring the strength of your brand initially, so be sure to take a peek at things like customer reviews and customer retention, as well as study metrics such as store/site traffic, search volume, and how much recent growth your business has seen.

2. Set goals

As we learned above, a brand extension strategy can improve your business in other ways as well as simply bringing in more income. Have a think about what you want to achieve with your strategy.

Are you looking to expand your reach? Aiming to fill a gap in the market? Are you answering customer demand? Or could it be that you’re trying to instill some hype around your brand or adjust your brand image slightly?

Whatever your goals are, make sure to clearly set them as this will keep you on track and make it easier to plan your strategy.

3. Know your resources

How equipped is your business to successfully implement your plan? This is such an important question because you can’t start a car without an engine. Have you got enough cash to invest in your strategy? If less than expected, think about adjustments you might be able to make to keep your plan alive.

Do you have any investors contributing to the implementation of your strategy? If not, and funds are still a little tight, you may be able to consider partnering with another business to implement a brand extension.

Whatever you decide on, be sure to understand the resources you have available to you so you don’t plan out of budget.

4. Explore market trends

Have a look at what’s currently got customers buzzing. Trends will ebb and flow, but implementing a strategy that’s relevant to the current market will certainly get you off to a good start.

Make sure you’re reading relevant media outlets and checking through social media outlets to learn what’s rocking the worlds of customers. Following and getting to know any industry influencers will also keep you relevant.

5. Research your competitors

There are likely a few competitors out there that might seem as though they have things all worked out. Do some research and discover what’s working for them. This will give you an idea of what you need to succeed and you can elaborate on their already successful ideas by adding your own touches.

6. Engage with your current customers

There won’t be a better resource for discovering where you are both succeeding and falling short with your current products than your existing customers. The customer always knows best, and this is especially true when it comes to discovering how to go about your brand extension strategy.

Engaging with your current customer base will also provide you with an idea of what the current market needs are, giving you an added sense of direction.

7. Get to know your new target market

Targeting a new market can feel like swinging in the dark. If you don’t get to know your new targeted audience, you won’t know what gets their attention, and ultimately what’ll get those credit cards swiping. Spend some time researching your new intended audience through social media, product reviews, forums, and any links you may have to influencers. This will also help to grow your brand awareness and put you on the radar of your new market.

You’ll want to find out such things as customer demand, current similar products, and what the strengths and weaknesses of your new competitors are. A few complementary products for your new audience to experience can also help you gain valuable insight into customer demand.

8. Finalize your strategy

Once you’ve been through the above list, put everything together and create a written plan for your brand extension. Make sure you’ve carefully considered potential costs, risks, and whether you have the resources and infrastructure required to successfully launch your brand extension.

Refer back to all your market and competitor research to ensure you’ve got everything in place and ready to go, and you’re on your way to success.

Examples of Good Brand Extensions

1. Michelin

When you hear the name Michelin, do you think of top-rated restaurants or food? Perhaps both? Michelin built their empire manufacturing car tires. In the late 1800s, the automobile industry was still in its infancy — at the time there were fewer than 3,000 cars in France — the Michelin company’s home base.

In an effort to help drivers plan their trips and boost car sales, Michelin rolled out a guide featuring gas stations, maps, how to change a tire, and other useful information. However, it wasn’t until the 1920s that the Michelin Guide took off. As the guide’s popularity grew, mystery diners were sent to various restaurants to provide reviews and a star rating system was implemented.

Now the Michelin Guide is a must-have reference for foodies and tourists, covering restaurants in roughly 41 countries.

  • What we like:

Michelin’s brand extensions is one of the riskier ones on this list, but it’s quite impressive. They took two seemingly unrelated industries and made it work — becoming the gold standard of restaurant ratings.

2. Gillette’s Razors & Shaving Supplies

Gillette’s extension into making shaving products alongside its safety razor blades was a smart move. Why? It’s hard to imagine someone shaving without using shaving cream, foam, or gel?

  • What we like:

It was almost a necessity for Gillette to produce this complementary good for its flagship product.

3. Star Wars Action Figures

Although Star Wars was popular among adults when the movie was first released in 1977, many children didn’t like it as much.

So how did the franchise become popular today? The Star Wars brand extended into the toy market. With action figures from characters in the movies, Star Wars was able to attract a new audience, build brand awareness and make a ton of sales in the process.

  • What we like:

Star Wars was able to tap into its dedicated fan base and market toys to not just die-hard fans, but attract new ones with the addition of merch.

4. Colgate’s Toothbrush

Just like Gillette’s razors and shaving products, Colgate’s toothpaste and toothbrush are complementary goods. But unlike the former example, you literally need a toothbrush to use toothpaste. Otherwise, you can’t brush your teeth.

What we like:

In my opinion, Colgate’s decision to enter the toothbrush market was a necessity and one of its best moves, helping it secure the third-largest slice of the oral care market.

5. Honda’s Lawn Mowers

Honda’s line of lawnmowers might not elicit the most enjoyable memories of my childhood. Still, its entrance and success in a saturated market speak volumes for a company primarily known for selling cars.

  • What we like:

By leveraging its expertise in small motors to enter the lawn mower market in 1978, it now boasts the seventh-largest slice of market share in the global lawn mower industry.


While a brand extension has its benefits, you also need to know that extending your brand into unchartered waters would also come with challenges. So before you implement any extension strategy for your business, ensure it’s in line with what your ideal consumer wants.

Does it make any logical sense to start marketing a new product to my customers? What benefit would a consumer derive from this new brand or product? Have I done enough research to know how a brand extension would affect my original brand?

Once you answer those questions, then you can start thinking about effective ways to grow your brand.

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