Brand Extension Essay

2.9 Brand Extension

The business dictionary (2015) defines brand extension as alternative term for line extension. Brand extension can be defined in a holistic approach to be able to include extensions of brand brand names, modified products or product lines in the extension (Xie 2008). Classifications and definitions of extensions are quite clear in a theoretical view but from practical experience the boundaries are much less clear (Amber & Styles, 1997). Brand Extensions are the practice of using current established brand names to enter new product categories (Aaker and Keller, 1990). This defines brand extensions as an attempt to extend established brand names to launch new or modified products or lines for a company.

2.9.1 Vertical Brand Extension According to Xie (2008), vertical brand extension can divided into upscale and downscale. Upscale brand extension is when a firm creates a new product line with a higher price and quality. Meanwhile, downscale brand extension is when a company creates a product with lower quality and price than the product lines that already exist. Xie (2008) claims that a step up or step down in quality and/or price cannot just influence the way the product is launched and marketed, but also how the awareness and reputation influence the core brand. 2.9.1.1 Positive Effects of Vertical Brand Integration 2.9.1.1.1 Upscale Vertical Brand Extension Upscale extensions are more likely to be adopted than downscale extensions for reputation