As such, brand extension is a type of short cut that companies resort to, to minimize risk and maximize their investment in the brand. But more often than not, brand extensions fail. The simple reason for such failure is that the equity of the parent brand is one of the many factors that impact the success of brand extensions. Much has been researched on the success factors of brand extensions in the industry and in academia. Knowledge from the collective wisdom of the industry, best practices of some of the biggest brands and empirical evidence from research is used to present some guidelines on brand extensions to companies.

Essential factors that impact brand extension success

1. Fit between parent brand and brand extension – The fit between the parent brand and the brand extension is probably the most important factor that impacts the success of the brand extension. Fit can be analyzed from multiple perspectives. But generally fi t refers to the compatibility of the brand extension’s product category, product attributes and associations to the parent brand’s product category, product attributes and associations. Greater the fi t between the parent brand and the brand extensions, higher is the probability of the success of the brand extension.

2. Parent brand conviction and parent-brand experience – The other important factor the infl uences the success of the brand extension is the quality of experience that consumers would have had with the parent brand. Such brand experience can include the physical quality of the product, the service encounters, the price and value perceptions, the post purchase service, the retail atmosphere and such. Also, the parent brand conviction, which refers to the extent of support and commitment the parent brand has towards the brand extension, also impacts the success of the brand extension.

3. Retailer experience – In spite of the ever increasing infl uence of the Internet on shopping of even the branded products, retail spaces in the physical world still continues to have a stranglehold on distribution. As such, the suc- Brand Extension Success – New profit growth Martin cess of many brands is contingent on securing shelf space and the marketing push provided by the retail establishment. Similar is the case with brand extensions. If companies that extend their brands are not welcomed by retail stores and are not offered marketing support and push by the retail stores, then the success of such products are limited.

4. Marketing support – This is one of the important factors that determine the success of brand extension that is under the control of the company. Given the proliferation of brands in the market, it is only natural that the company that invests highly in promoting its brand extension eventually ends up in a better position. Such support will help achieve two objectives – one, it will facilitate a very aggressive push and pull demand for the brand extension and two, it will help create positive perceptions about the company in the minds of the consumers.

CONCLUSION

In the light of very high rates of new product failures, brand extension seems very attractive. After all, all companies seek to extract the maximum possible returns from the investment in their brands. Brand extensions done without due diligence can be equally detrimental to companies. But if companies carefully study the brand extensions and follow the general guidelines offered in this article, brand extension success could indeed become a corporate reality.