Below is an excerpt from
John McKeown's January 2017 Monthly IP Blog.
Brand extensions are closely related to brand equity. The equity
of the brand is leveraged by extending the brand to additional
wares and services or expansion into new geographical markets. A
brand extension can reduce the cost of the introduction of a new
product and increase the changes of a successful launch. Costs can
be reduced since it may be easier to obtain distribution with a
known brand and less promotional activity may be required.
Brand extensions capitalize on the brand image of the core
product or service to efficiently inform purchasers about a new
product or service. Brand extensions can facilitate acceptance of
the new product or service by providing two benefits. First,
awareness for the extension may be higher because of previously
established brand awareness. Second, consumers may form
expectations for the extension on the basis of what they already
know about the core brand.
