When it comes to branding, every detail matters. From something seemingly small like how you create a logo to something much more expansive like your overall aesthetic, each component shapes perception and expresses your brand message.
So, what happens when a brand dips its toes into a new product that’s a leap from its initial offering? If done right, it can propel a brand forward and help to expand the business. Known as brand extension, it's the process of growing your brand to include new services or products—or stretch into a new industry.
In this article, we’ll explain what brand extension means with a clear definition, describe the different types that exist and go over a few real-world examples of good (and not-so-good) brand extensions.
What is brand extension?
Brand extension, also called brand stretching, is a marketing strategy companies use to apply their recognizable brand name to a new product or service. Even if consumers aren’t familiar with the new offering, they’ll know and trust the brand name enough to try it. Ideally, this method works best when brands release products or services that are parallel to the ones they already offer. Still, there have been instances of brands successfully branching out into completely different territories.
One of the goals of brand extension is to reach new customers by launching a new product with the goal of increasing growth and profits for a company. Brand extensions allow companies to leverage the success of their existing branding efforts to promote a new offering rather than build a brand from scratch.
Types of brand extensions
The type of brand extension you use should be based on what you’re hoping to achieve, your current branding and your customers’ needs. These are five different brand extension possibilities that you can consider:
Line extension
A line extension is one of the most straightforward brand extension examples and involves a brand launching a product that would already be familiar to its audience. The product in this type of extension would fall in the same category as the company’s current offerings, making them easy to market to their existing clients. For example, a haircare brand that has shampoos might create a line extension for new products that are for colored hair, thinning hair, or curly hair.
Complementary product extension
Similar to a line extension, a complementary product extension, also called a companion product extension, is when a brand releases a new product that complements its initial product. For example, Colgate, a toothpaste company, released toothbrushes as a new product. It’s not out of the question that someone buying Colgate toothpaste in a store would also pick up a new toothbrush from an oral hygiene brand they’re familiar with.
Customer-based extension
In this type of extension, a brand might focus on a single demographic of their clientele and expand their products based on their needs. Existing brand loyalty makes this ideal for a company that wants to offer its customers a wider range of products. Apple’s dedicated and loyal customer base helps the brand continuously release products that it knows will appeal to those same clients.
Company expertise extension
When the public deems a brand or company an expert in their industry, they might want to branch out into new offerings that still fall under their area of authority. Think of the Beats By Dre headphones. The brand became known for its stylish and quality over-ear headphones, so when the company released other products, like earbuds and speakers, customers trusted the brand’s expertise in the audio field enough to be confident in purchasing the new items.
Brand lifestyle extension
For a brand that relies on the lifestyle and culture it promotes, a brand extension can take an unexpected turn in terms of the category of products it offers, so long as it still fits with the brand’s portrayed values or distinct way of living. Jeep’s customers know the company as an outdoorsy and adventurous brand. While tents, knives, bicycles, and other camping gear releases may be a far cry from cars, they are aligned with the company’s projected lifestyle.
Advantages of brand extensions
There are many reasons why brand extensions can be beneficial, so the reasons for pursuing an extension are different depending on a company’s goal.
New audience: Brand extensions can get your brand in front of new audiences, which will usually result in growing your overall customer base and increasing sales.
Financial gain: Aside from creating new opportunities to earn more money, brands also tend to save money on marketing expenses and brand management with extensions. Since customers already recognize the brand, companies won’t need to spend extra money to cultivate brand awareness and can instead focus on promoting the new product itself.
Brand trust: From the consumer’s perspective, they’re more likely to try a new product from a brand that they know and trust. Expanding a brand’s current offerings to include new items that make sense with its existing products can improve your company’s image in the eyes of its customers. The combination of brand trust and loyalty between the consumer and the parent company in addition to the convenience you provide by offering new products can really work to revive a brand’s image.
Improved brand image: By leveraging a trusted brand name and persona, brands can improve perception and overall image to both existing and potential customers. Brand extensions can help to reinforce brand associations.
Brand revival: Sometimes brands need a refresh, and rolling out a new product or service can breathe new life into a business. It can also work to generate buzz or bring attention to a brand looking to reach new customers.
Disadvantages of brand extensions
While the advantages of brand extensions are worth the investment, if not done correctly, the extension can negatively affect your company. Here are a few potential disadvantages of brand extensions:
Loss of reliability: A brand extension can actually harm your brand reputation if the new offerings don’t relate to or perform as well as existing offerings. Failed brand extensions can also lead to brand dilution.
Negative impact on brand image: If a brand rolls out a subpar product or service compared to their original offering, it may negatively impact the core brand’s image.
Competitive barriers: It can be difficult for brand extensions to gain traction and overtake existing competitors in an oversaturated space.
That’s not to say you shouldn’t try and expand your brand if you have the opportunity. Just be sure to consider all the possibilities before launching a brand extension. Rather than going to market right away with a new product, focus first on your customers’ needs and your brand identity.
9 brand extension examples to learn from
The best way to learn how to apply brand extensions to your own company is to see how well-known brands do it. Not all the examples on this list are successful brand extensions; some show how brand extensions can go wrong so that you can avoid making the same mistakes.
01. Apple
Apple started as a company that makes computers but became a trillion-dollar company through calculated brand extensions. It strategically considered its existing products and market needs before introducing new products and services. As digital music files went mainstream, people needed music devices to listen to them, hence the iPod’s invention. Then, the iPod evolved into the iPhone to fulfill the market need for a reliable and functional smartphone. The company further capitalized on its market saturation by releasing accessories and technologies that complement the iPhone, like Airpods and the Apple Watch.
02. Dove
After successfully marketing to women for decades, Dove decided to extend its brand to include men. The personal care company created the Men+Care line and developed a marketing plan that was geared toward men while staying true to its body-positivity brand values. Men+Care was a simple brand extension that helped Dove become the most popular male skincare brand in the US.
03. Michelin
What do tires and fine dining have in common? Not much. That’s what makes Michelin’s brand extension so impressive. In the early days of cars, society perceived driving as a luxury. To sell more tires, the Michelin brothers had to get more people on the road. So, they launched a guide of notable hotels and restaurants for motorists to stop on their journeys. The company initially distributed a few thousand copies of the guide for free.
Today, Michelin has sold millions of copies of its guides and is the de facto decider of the world’s best restaurants. This brand extension was an undeniable risk, but with some out-of-the-box thinking, the Michelin successfully expanded into an entirely different industry.
04. Food Network
Food Network pivoted from entertainment to consumer goods when the network partnered with Kohl’s to create a cookware line. While this brand extension could have been risky, the partnership was successful. The Food Network understood that its audience’s interest in cooking extended beyond the desire to watch its shows, and that they would be potential customers for new products.
05. Virgin Group
Virgin Atlantic began in the seventies as a record store and has grown to include several subsidiaries in travel, food, hospitality, consumer goods and more. The common denominator between all of Virgin’s products was its portrayal of a lifestyle that interrupts the status quo. While this worked for some products, it didn’t work for everything—Virgin Cola, for example, was a bust.
06. Dyson
You might not have thought that a vacuum cleaner producer would start selling hair dryers, but Dyson did just that. The company deftly handled a brand extension into sleek home products such as fans and humidifiers. With Dyson’s branding as an innovative producer of sleek, high-quality appliances, its upscale customer base embraced the hair dryer with open arms.
07. Google
Where would we be without Google? (Still asking Jeeves, probably.) The tech giant began as a search engine in 1998 and now owns multiple products that make our lives and work that much easier. Google’s brand extension journey naturally aligns with technological advances, but this makes Google’s foray into other products so innovative.
The search engine brand launched Gmail in 2004, paving the way for further brand extensions. Google Drive, Google Docs and Google Hangouts are just a few of the additional products Google owns today. Back in 1998, it might have seemed strange for a search engine to offer digital business tools, but as Google advanced, it made sense for the company to offer these products to its audience, too.
08. Colgate
Attempting to pull its own Michelin stunt, Colgate, known for its toothpaste, attempted to jump into a new industry in the 1980s: food. Colgate inexplicably began offering frozen dinners. Needless to say, it failed.
Its brand extension into toothbrushes, on the other hand, was very successful. Considering that toothpaste and toothbrushes make more sense together than toothpaste and lasagna, it was a much easier hill to climb.
09. Amazon
Amazon is a great example of a brand with humble beginnings that expanded its offerings to become an industry giant. What began as an online book retailer in 1994 has transformed into a one-stop online shop.
While Amazon’s expanded product offerings qualify as brand extensions, their acquisitions made it the multi-billion dollar company it is today. Today, the behemoth owns MGM, Whole Foods Market, Zappos, Audible and IMDB.
