Brand Extension is a growth strategy in which a company uses an existing, successful brand name to introduce a new or modified product in a new product category or market segment. This approach allows the company to transfer the trust and positive associations of the established brand to the new offering.
The success of the extension depends directly on the perceived fit between the existing brand and the new product category. Using an established brand reduces the cost of introducing the new product and reduces the risk to the consumer. However, an unsuccessful extension can lead to brand dilution or damage the reputation of the parent brand if the new product does not meet expectations.
