Exploring Aspects of Brand Stretching : are Brand Extensions Success formulae

The purpose of this article is to critically analyse success and risks of the strategy of brand extension or commonly called brand stretching. A brand is an amalgam of the notional images of physical products that go with the brand. Brand awareness is the ability of a potential buyer to recognize or recall that a brand is a member of a certain product category. A link between product class and brand is evolved and image is built by people's perceptions, that is, the way in which people think about or even imagine product to be. Old brands help bind consumers to their past and to the communities that shared those brands. Brand extension is always seen as a way for companies to seek growth while introducing a new product. Many companies adopt brand extension as a strategy with the aim of benefiting from the brand knowledge achieved in current markets. Brand extensions is built on existing Brand Equity. These are less expensive to launch as compared to launching an entirely new brand, and are a low risk option in these competitive times. It has been estimated that the market shares of new products using a brand extension strategy are on average 5 percent higher than those of new products marketed under new brands. Some researchers have suggested that brand extension strategies may carry the risk of diluting important consumer trust in the parent brand. But 30% of revenue of top 23 most trusted brands FMCG come from Brand Stretching.