What Is an Extended Cost?

Brand extension refers to a brand creation strategy where a company uses its reputation for successful brand names to launch improved products or new products, including new packaging specifications, fragrances, and styles, to form a series of brand-name products based on existing brand-name products. It differs from brand extension in that: "Brand extension means using a brand name in the same market to successfully cut into another block of the same market. ^[1]

Brand extension

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Brand extension is an important aspect of brand strategy. For a certain brand with customer loyalty, how can it make the brand permanently attractive so that it can be favored and highly loyal by customers for a long time? The answer is: we should constantly pursue brand extension and accurately grasp and use brand extension Strategy.

When a company's brand succeeds in the market, the brand has market influence and will create superb profits for the company. With the development of enterprises, when launching new products, companies will naturally use the brand's market influence, and brand extension has become a natural choice. This will not only save the cost of launching many new brands and various inputs, but also use the market influence of existing brands to extend people's awareness and evaluation of the brand to the new products that the brand will cover.

On the surface, brand extension is the expansion of a new product or product combination. In fact, from the perspective of brand connotation, brand extension also includes the expansion of brand emotional appeal. If the new product does not help enrich the content of the emotional appeal of the brand, but reduces or weakens the content of the emotional appeal, the brand extension will create a crisis. We should not just see the market influence of a brand as a catalyst for new product launches, but analyze whether the product's market and social positioning contribute to the stability of the brand's market and social status, and whether they are compatible. ^[1]

Successful brand expansion helps increase market awareness of new products and reduce market introduction costs for new products. Especially in the case of small product differences and difficult market development of new products, launching new products with the recognition of the original brand can receive convenient and easy positioning results. The original brand of the company can often convey the information of new product positioning, and most consumers are willing to repeatedly choose one or several famous brands to reduce the purchase risk. Appropriate brand expansion will not only undermine the original brand's market position through consumers' good experience and feelings about new products, but also increase the market coverage of the original brand and increase the visibility of the original brand. ^[1]

Brand extension strategies have multiple advantages. The well-known brand name allows Xinxin products to be quickly recognized and accepted by the market, thereby helping the company to operate new product categories. Brand extensions save a lot of money needed to promote a new brand, and consumers quickly learn about new products.

Because this approach not only saves the promotion costs of launching a new brand, but also allows new products to ride on the reputation of the original brand and be recognized by consumers. Visually call it the "Famous Train" strategy. Because of this, brand expansion strategies have been adopted by many companies as a tool to expand their business scope and increase their visibility. ^[1]