Brand Extension is a powerful marketing strategy that is widely applied by big brands
There are a lot of brands that are currently starting to develop their business into various types of products. This is a form of brand extension strategy to be able to reach wider consumers. Basically, Brand Extension’s strategy is a brand strategy carried out by large companies, one of which is Google.
Although its main product is a search engine or search engine, Google also offers other products that still have to do with their main products, such as Google Cloud platform, Google Apps, Play Store, etc.
Then, what exactly is the understanding of Brand Extensions? How do you apply it in business? Let’s look at the full explanation of Brand Extension below.
The understanding of brand extensions is
Quoted from the Investopedia page, Brand Extension is a business strategy used by a brand that is already established in order to develop new products that are different than the main products. Terms like this are also known as brand stretching.
In order to apply this strategy, a brand must already have a stable brand equity. This strategy also depends full of brand loyalty.
If it can run well, Brand Extension is able to help companies in getting new demographics, expanding consumer base, increasing business sales, to increase business profits as a whole.
In order to be said to be successful, logical negotiations must be carried out between original products and new products to be released. The weak association will be able to harm the parent brand. Here are some ways that can be applied by doing brand extensions:
- Develop the same product in different forms with original products
- Add some typical components to new products
- Provide new features on products that previously existed
- Expand products in several fields that have become a special brand expertise
- Develop new products that can be used together with the main products
The success of Brand Extension will enable a company to diversify their offer and also increase its own market share. It is capable of providing competitive advantage for companies than its competitors who do not offer the same product.
An important element for determining the brand extension
Some important elements of brand extensions are as follows:
1. Relevance
It’s a good idea for a brand extension that you will do already have strong relevance to the core brand of your business. So, if your core brand is a fashion category, then make a brand extension that still has a relationship or strong connection, such as accessories.
Why? Because brand extensions that have strong links in the core brand are able to increase the value of companies in the eyes of the community, competitors, and more interesting are Mira Business.
2. Credibility
Credibility is a form of customer trust at the level of core brand capability in terms of expanding other product categories. A product with a brand that has been believed that the quality is not necessarily able to get success when the businessman is carrying out a brand extension.
For example, such as Samsung has succeeded in carrying out a brand extension in various electronic products, it is the result of its credibility which is a brand image, namely in the electronic category, ranging from laptops, computers, televisions, to smartphones.
However, the credibility that is owned by Samsung is not necessarily successful if done in other industries, such as fashion.
3. Transfer
Transfers are part of the perception of ability and also the experience of a brand felt by the customer, which will then be transferred to Brand Extension.
Examples are like the skills and experience of Garuda Airlines Indonesia’s airline, which can be transferred to goods delivery services or documents outside and domestically. They also provide VISA also insurance making services. So, Brand Extension will be affected by the company’s core brand.
The important role of Brand Extension can also be used if the company has its own unit that conducts research and development. However, the company must allocate investment in the R & D unit to be able to innovate continuously.
Creating new products in the market cannot be done easily. But, a research process must be done and also the development that takes time before the product or service is introduced on the market.
Competitions carried out with competitors on a product and services are also a factor that can trigger many companies with famous brands so they can always innovate and increase their creativity in making other new products.
For this reason, you must be able to take advantage of the company’s popular brands to continue to innovate. So, your business can be successful and get real success.
4. Risk
Companies that are able to provide various kinds of complete products as well as the Toserba shop capable of serving consumers with their various needs.
Examples are like delicious noodles, which are able to provide various desires of consumer instant noodles with various flavors. Some time after, Sedaap was marketed as a soy sauce brand. So, Wings Food includes sedaap in other market categories besides instant noodles.
Entering the market whose categories generally generally have to be ready to capture more consumer demand, such as in terms of flavor, shape and packaging. There are some risks that must be borne by the brand owner.
But certainly, the biggest risk is at the high cost needed. The more extensions that get into it, the greater the consequences of development costs must be incurred by the company.
In addition, penetrating the extensions on line and different market categories also requires different promotional costs. In order to reach the level of promotional effectiveness, it is not possible for marketers to enter many extension products into one form of promotion only. Why? Because this method will only confuse the market in recognizing the brand.
In addition, the presence of a weak extension and category extension has the potential to be able to destroy existing core brands.
The poor level of development in one extension brand will be able to disrupt the development of core brands and also other extensions. If this happens, the level of losses caused will become greater, because the core brand is affected.
Brand Extensions can also make consumers be confused if the difference is very thin. For example, there is a woman who wants to buy a skin moisturizer for her face.
He was confused which should be chosen, whether he had to use the product OLAY Total Effects Moisturizer, Olay Active Hydrating Fluid, Olay Age Defying Cream, Olay Pro Vital Moisture Cream or Olay Active Hydrating Cream.
If you already need a greater cost and more careful handling, we can conclude that implementing Brand Extensions strategies will be more complicated when compared to just managing one brand.
But, a number of brands that we have discussed together above are examples of brand success in carrying out brand extensions strategies. They can succeed because they succeed in understanding four important things.
First, the power of the parent brand is strong enough in the eyes of consumers. Second, the positioning of the derivative brand is not too far from the core brand. Third, consumers are easier to understand the expansion of the brand carried out by the company. Fourth, the brand of expansion has entered the category that is capable of being well received by consumers.
Based on this, we can understand that Brand Extensions are something that must be done with
The right strategy in order to be able to produce a strong level of brand development. In addition, the company will also be able to control the market in various categories, gain a wider market share, and get greater profits.
Closing
Thus the full explanation of us about Brand Extensions. So, we can conclude that brand extensions are a business strategy used by a brand that is already established in order to develop new products that are different than the main products.
There are several elements that you must pay attention to in implementing brand extensions, namely relevance, credibility, and transfer. If it can be done properly, the Brand Extension will be able to bring very abundant business profit.
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