Brand Extensions: A Strategic Path to Growth

Arm & Hammer has a long history of selling deodorizing products, from kitty litter to toothpaste. It has also formed alliances with Dutch Boy Interior paint and Hefty trash bags. Brand extensions offer marketers the opportunity to enter new markets and increase their brand awareness with existing customers.

Examples of successful brand extensions include Ivory, which extended its brand to include shampoo, conditioner soap, laundry detergent, and deodorant, and Honda, which extended its brand to include automobiles, Powersports, Jet, Marine, and Power equipment. Brand extensions work when there is a closeness between the parent brand and the new one, and when the benefits of the original product are desirable in the extension category.

On the other hand, if there is not a substantial degree of closeness between the parent brand and the new one, then the company should use a different brand name for the new product. Disney has chosen to call its residential communities Cotino, as it is targeting consumers over age 50 and the Disney brand is associated with children's entertainment. Bic's attempt to extend its brand to perfumes was unsuccessful, as consumers inferred that the perfume would be cheap or smell like lighter fluid.