Essay On Brand Extension

The Effects of Brand Extension toward the Brand Image

Loh Jia Cong. Student

Multimedia University

Introduction

Generally, brand extension is a common way that a company use to launching a new product with use same or existing brand name for that new product in a different category. The existing brand name is also called parent brand. Brand extension also representative a company utilizes their brand name to a new product and leverage equity for expansion. Every company hopes to utilize brand extension leverage with its competitors and increase the sales or profits with the new product they offer. The purpose is to attract potential customers and retain loyal customers. When conduct brand extension, company should use a well-known

Line extension mean a company can extend their product by develop different flavors as competitive advantage. For example, Pepsi began with cola soft drink but nowadays Pepsi provide various flavors of cola soft drinks. The purpose is to target different market segment, such as Diet Pepsi target customers who is health oriented. In the other hand, category extension mean a company try to produce new product category. For example, Pepsi produce cola soft drinks and watch. In category extension, company need to consider to emphasis on the new product category they offer must logical association with its parent brand in order to impact its brand

When appraise a brand, consumers will depend on their perception of quality which is ‘sometimes more difficult than actually delivering high quality’ (Aaker, 1990. p. 48). This is the customer’s decision based on intangible knowledge of quality, not necessarily based on specific attributes (Zeithaml, 1988). The quality of a brand is important that will evoke customers buying behaviour based on their knowledge. Customers who have strong attitudes about the quality of a brand tend to transfer these positive attitudes to the brand extension (Asker and Keller, 1990; James, 2006). Therefore, the perceived quality will be an important variable that impact a company’s brand