Disadvantages Of Brand Extension

The advantages connected to this strategy
Consumer trust is the existing well-known-strong brands represent a promise of quality, useful features for the consumer. Thus, the extension will benefit from this fame and this good opinion about the brand to create a compelling value proposition in a new segment or markets . In addition, consumers will be more likely to try a new product from a brand they knew, versus only 3% for a new brand.However, this has still to be done with ability to be successful.
The customer is expecting to transfer his information from the brand to the extension. If the general opinion about the brand is favourable, the behaviour regarding the extension should be the positive as well. A successful brand extension can

Thus, there are different disadvantages that can be taken.
Dilution of the existing brand image is that the extensions are using the most important asset of the company that is its brand name. It can be a major advantage for the extension but it represents as well a huge risk for the existing brand because the brand image can be diluted. Those positive and negative consequences are reciprocity effects and defined as a change in the initial customer’s behaviour regarding the brand, after an extension.
A brand extension can damage the brand. A dilution of the brand capital can happen by the occurrence of undesirable associations or by the weakening of the existing associations. This latter can be a consequence of new associations transferred from the extension.
Cannibalization is when the extensions can cannibalize the existing products of the brand when there are positioned in a close market. It means the extensions sales are increasing while those of the existing brand’s products are following the opposite curved. These good sales figures for the extensions can not compensate the damage produced to the original brand’s

The more extensions the brand made, more important the damages will be. This occurred to Audi when the Audi 5000 cars were suspected to have sudden-acceleration problem. Adverse publicity started to appear from 1978 and continue to the extent that it was mentioned on CBS’s “60 minutes” in November 1986. Audi did not make efforts to change this situation and as a consequence its sales fell from 74000 in 1985 to 23000 in 1989. Audi needed fifteen years to recover while it was manufacturing good cars.
Types of Brand Extensions Product form extension is when a brand is launched in a different form, it is line extension. If a different product form is within an entirely different product category, it will be a brand extension. For example, Amul milk extended to Amul condensed milk and Real juices extended to real juice concentrate.
Companion product extension is extensions in the form of companion products are very popular. The reason is to capitalize on product complimentary. As consumers view both products jointly, it offers scope for brand