Brand stretching and extension: their types and features
In branding, there are terms like “brand stretching” and “brand extension”. These terms may seem very similar, but they have a number of differences. For example, a company has decided to launch a new product, but its name, product category, and target audience are identical to existing branded products. This is brand stretching. What makes the new product different is that it provides a different value to consumers. For example, the cookie brand launches a new variety in raspberry flavor, adding to its line of chocolate, cream, and caramel flavors.
Reaching a new consumer segment or developing a new product category is a brand extension. In this case, the image and the established brand image do not change. For example, a company that produces feminine care cosmetics announces the launch of products for men.
There are basic types of brand extension:
- new quantity (mass) of goods;
- more quantity (mass) of goods at the same price;
- new packaging;
- new characteristics (taste, composition);
- new benefits for the same group of consumers.
The main types of brand extensions include the launch of complementary products, a new target audience, a new value, the replacement of a manufactured product with a new brand, and the transfer of the brand image to a related group of products.
Pros and cons of brand stretching
Brand stretching and extension allow a company to cover more types or groups of products. It also allows it to cover multiple destinations that offer different benefits to a different number of customer segments. All of this has a name, the brand family when a set of products is sold under a common brand identity. When it changes, the brand undergoes a transformation – the appearance of a new brand, but with the old name and packaging design.
Marketers point out the pros and cons of brand stretching. The pros include saving money on advertising and gaining consumer trust more easily if the brand already has a good image in the marketplace. In addition, launching new products under the old brand saves time and money.
Disadvantages include brand dilution – when consumers who are initially accustomed to certain products become confused and lost among the products after the innovation. In addition, studies show that extended brands are less viable in the marketplace than stand-alone brands. Another disadvantage is that the cost of developing an extended brand is much higher than the cost of developing a new brand. The final reason for not extending a brand is the risk of damage to the reputation of the brand’s products as a whole. If customers are dissatisfied with one type of product, that dissatisfaction will spread to all of the brand’s products.
To determine whether the brand extension is worthwhile, you need to consider whether consumers are comfortable buying different products under the same brand. If the answer is yes, this is the main criterion for brand extension.
