A common way to launch a brand new product is by leveraging an existing product’s name. As a marketing technique, brand extension (also called line extension) is used by companies to increase profits on new products. They do this by taking advantage of their existing customers and brand loyalty. This method of launching new product should work if there is a logical link between the original and new product. Brand dilution is the result of weak or no connections. In addition, if a successful brand extension does not work, it could damage a popular parent-brand (Dall’Olmo Riley, Hand, & Guido,2014).
For example, to demonstrate the steps required for creating a successful brand expansion on a cereal breakfast, one must follow a set of guidelines. The first thing to do is research the parent brand as well as the brand extension. A company, for example, owns the cereal brand Unique Q. Unique Q cereal has become a popular product on the market. The company is able to control the cereal market because of customer loyalty. Brand extension could be used as a strategy to market new products. The products include Unique Q Waffles, Unique Q Snack Bites, Unique Q Protein Bars, and Unique Q cereal makers. If you look at the additional products, it is reasonable to assume that Unique Q also serves as a food product.
Dall’Olmo Riley Hand and Guido (2015) state that the secret to launching successful brand extension programs is to determine whether the new line is in keeping with the original brand. In most cases, managers rely on their own opinions of the brand parent to decide whether or not the brand extension is consistent. In many cases, these perceptions are different from what consumers think. The managers also do not understand what consumers think about brand extensions and how they fit with brands.
The first thing to do when creating a Unique Q extension is to think about what the consumers want. In order to determine if a brand extension fits with the original product, consumers must evaluate four underlying ideas. Relevance, recognition, credibilty, and transfer are the four constructs. Relevance is the extent to which the original attributes of the brand are relevant to the extension category. In the case of Unique Q, its attributes would clearly be appropriate in the sale and marketing of cereal machines. But not dishwashers or refrigerators.
In order to be recognized, consumers must understand both the rationale behind the brand expansion and the logic that is used to implement it (Spiggle Nguyen Caravella). Unique Q cereals, for example, would have a brand that would be easy to understand and would make sense to consumers if they were to sell other products like protein bars.
According to Spiggle Nguyen & Caravella (2012) credibility refers the degree of original brand qualities that are acceptable and credible to sell the brand extension. Unique Q’s cereals are a credible brand, and it is acceptable that Unique Q extends the Unique Q name into wafers and snack bites. However, expanding the Unique Q label into wines and spirits would not be acceptable. Transfer is the ability a brand has to extend their brand with the skills they have acquired. Unique Q’s experience and skills can be applied to other areas, including the snack bites, within the diet sector.
After conducting this research, you should select the brand that is expected to have the greatest success. Spiggle Nguyen & Caravella (2012) say that to implement a brand expansion with a lower degree of fit, one must first identify what is lacking in terms of fit and then use advertising to try and change consumer perceptions about the brand. After that, it is time to implement the brand extension. It is essential to compare the parent and brand extension, so that any differences in values can be identified.