What is brand extension? Types of brand extension - Advantages & Disadvantages

What is brand extension? Types of brand extension - Advantages & Disadvantages

In today's society, many companies have been extending their brands to other products or services. It provides a way to maximize marketing dollars by leveraging what you already have in place for your current products to reach additional customers. In this blog post, we'll be discussing the basics of brand extension.

What is brand extension? Types of brand extension - Advantages & Disadvantages

In today's society, many companies have been extending their brands to other products or services. It provides a way to maximize marketing dollars by leveraging what you already have in place for your current products to reach additional customers. In this blog post, we'll be discussing the basics of brand extension.

What is brand extension?

Brand extension is the process of taking an established brand name and applying it to a new product or service. The term is sometimes known as brand stretching

Different types of brand extension

Brand extensions can be categorized into different types:

Companion product

The most common type of brand extension is known as a companion product. This is when the marketing team takes an established brand name and adds it to another similar product in their lineup.

For example, Hershey Co. has their well-known chocolate bar, and they also sell Hershey's syrup & baking chips at grocery stores.

Product form

A second type of brand extension is product form. This just means that they're taking their well-known product and changing it into a new form or variation of the original.

For example, McDonalds recently began selling McCafe coffee drinks at grocery stores & retail locations. They've also made some changes to the way that their burgers are cooked. These changes have been successful as it has resulted in a higher customer satisfaction rate.

Company expertise

When a company decides to brand extend their product into related but different fields, it is known as company expertise. A new product will be developed that still aligns with the core competencies of the company.

For example, Mars Inc., who are known for their candies & chocolate bars, have extended their brand into pharmaceuticals & candy stores.

Brand distinction

Another example of brand extension would be to gain a competitive advantage over their competitors. This is known as brand distinction. The company will try to gain an edge on their competitors by distinguishing themselves with the use of a recognized name.

For example, Pringles potato chips are sold in various shapes that are different from the other brands on the market.

Brand prestige

The final type of brand extension is known as brand prestige. This just means that the company will apply their well-known name to a product that they believe to be superior, in order to gain recognition for being associated with this product.

For example, L'Oreal's Lancome & Maybelline brands were once exclusive only to high-end department stores and makeup boutiques, but now they're available at grocery & drug stores.

Benefits of brand extension

Brand extension can bring many benefits to the company

The firm can use the existing brand awareness to promote a new product/service

A brand extension can be beneficial to an established company because it has the ability to leverage the name recognition of their existing brand. This also gives them a larger share of mind with consumers since they are more likely to trust a well-known brand than one that is not so established.

The risk of a new product is lower

Another benefit of brand extension is the fact that it takes less time and money to introduce a new product because there is no need to develop a whole new name, logo, or other type marketing materials. Since consumers are already familiar with their current brand, they can expect something similar from the company when they release a new product. This therefore eliminates the risk of losing money and time on a new brand that may not be accepted by consumers.

The firm can increase the awareness and "shelf space" for all products/services offered

A brand extension can also be beneficial because it allows companies to promote their entire product portfolio through various types of media channels. For example, a company could advertise their new product/service on television and radio while also utilizing print advertising to promote the fact that they now offer three different types of products. This can potentially lead to an increase in sales for each one due everyone involved with the marketing campaign knowing there is something else out there that may appeal everyone.

New customers can be reached

Another possible benefit of brand extension is consumer reach because it allows a company to expand their target market by reaching people who have never bought from them before. For example, a company may use an existing television commercial from one product to advertise another that would appeal to the same demographic group and thereby attract additional sales.

What are possible disadvantages of brand extension?

Brand extension may cause some possible disadvantages that the company must take into consideration

The firm could risk negative association from the parent brand name.

One potential disadvantage of brand extension is that a current or new customer may have a negative reaction to the new product due to the fact that it has been linked with an existing brand name. For example, if a company makes a high-quality camera and then decides to release a new product that is known for making people sick, it could sully the reputation of their primary brand. Another example would be if someone buys a certain brand because they trust in the quality of their products but then notice their current one doesn't offer the same standard of excellence. This could cause customers to question the reputation of the entire company and steer them toward other options.

It can cause brand dilution.

Another consequence of brand extension is that it could dilute the current reputation for excellence held by the parent brand. For example, Pepsi Co. created a new type of juice called "Lift" which was released in 2014. However, despite heavy promotion and advertising it did not sell well at all. Critics suggest this is because consumers associated the Pepsi name with soda, not juice. Therefore they were unable to separate the two in their minds and this caused them to avoid purchasing lift drinks altogether.

Successful brand extension cases

You can see successful cases of brand extensions conducted by big brands

Maybelline - Great lash mascara

Maybelline is a popular brand of cosmetics known for their wide range of products. Some of which are eye shadows, eyeliners, foundations, lipsticks, blushes and mascaras. In 1998 they introduced a new product to their line. It was called "Great Lash Mascara" . This product was an instant success. It quickly became the top-selling drugstore brand in America!

Colgate toothpaste

Colgate is famous for their toothpastes but did you know that their product line extends to mouthwashes? Colgate sells oral care products such as the Optic White mouthwash. This mouthwash claims to give consumers whiter teeth in just 3 days!

Tide laundry detergent

Tide is a popular laundry detergent brand which has several different products such as liquid, powder and to-go. However, there are other Tide products such as stain remover sticks and buttons that dissolve in the washer once your clothes have gone through the dryer cycle.

Baskin Robbins ice cream

Baskin Robbins is a company that specializes in ice cream and other frozen snacks such as cones and sundaes. However, they also sell their own brand of coffee known as Baskin Robbins' 31 flavors coffee!

Bayer Aspirin

Bayer is a brand that is renowned for their aspirin. However, it doesn't stop there. They also produce Alka Seltzer for upset stomachs, Aleve For painkillers and One-A-Day vitamins for adults!


It is possible that brand extension can have both benefits and disadvantages. The most important thing to consider when considering doing a brand extension is whether or not it will be able to increase sales for your company, without negatively affecting the reputation of your other products.

Frequently Asked Questions (FAQ)

Brand extension is a marketing strategy in which a company uses its established brand name to introduce a new product or service.
The types of brand extension are line extension, category extension, and franchise extension.
The advantages of brand extension are increased brand awareness, cost savings, and increased market share.
The disadvantages of brand extension are brand dilution, cannibalization of sales, and failure to meet consumer expectations.
A company can successfully implement brand extension by conducting market research, creating a clear brand positioning, and ensuring consistency in brand messaging.