The top 5 risks associated with extending your brand:
- Too many brand extensions can dilute your brand overall. By over saturating the market, customers can become confused about which product to pick within your brand and will look to another brand with fewer, simpler choices.
- Brand extensions can take resources away from other projects that could provide higher long term gains. Don’t be tempted by the easy, short term gain brand extension (particularly, line extensions).
- Brand extensions can have a negative effect on market share. Introducing a new product within the same line can cannibalize market share for existing products within that line.
- Brand extensions can have a negative effect on shelf space. With limited shelf space available at the retail level, a line extension could cannibalize your existing products’ shelf space.
- If a brand extension doesn’t live up to the existing expectations for the brand created by pioneer products, negative experiences with the new product can hurt the brand overall.
Remember, brand extensions can be an effective marketing strategy to help build your business, but be sure to consider the risks associated with them before you jump into it.
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