Brand Extension

As competition becomes more severe in market place in last 50 years, innovation becomes more authorised than ever. Scientists, businessmen, entrepreneurs and companies has been inventing vernal products everyday and trying to find a bearing to place these innovative products to market. The first obstacle to launch these untried products to the market is strike offing be which is well-nigh between $80 million and $150 million (Aaker and Keller, 1989), also launching a reinvigorated instigator or unexampled products comes with 90% of disaster risk (Völckner&Sattler, 2006). The tendency to avoid these high cost and risks resulted to birth of the new marketing term named marque telephone extension.
Brand extension is a method to launch new products into the market with using knowable and recognised check off names. As an example, Yamaha, the piano producer, extended its product portfolio to motorcycles and yacht engines successfully and directly hearing Yamaha word does not evoke only pianos. Brand extension provides lots of advantages while launching a new product into the market; however, using a strong brand name in a new product does not make success certain and includes some risks and disadvantages. Approximately the 50% of new products which was launched under the name of a strong brand name survives after 3 years in marketplace (Taylor, 2004).




The advantages of brand extension affect mainly three parameters named time, costs and positive effects to parent brand.
First of all, using a strong parent brand in a new product comes with an advantage of omission of name and trademark establishment process which costs a great amount of notes and time. According to Aaker and Keller (1989), creating a new brand costs approximately $80 million to $150 million. Beside this new brands consume to work consumer knowledge and trust. Consumer knowledge includes brand awareness and image. The parent brand had already invested in these factors with advertisements and promotions, so there is no need to expense more money to...If you want to get a full essay, order it on our website: Ordercustompaper.com



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