What is a brand extension?

A brand extension refers to the strategy of leveraging an existing brand name to launch new products in a different category. This approach capitalizes on the established recognition, reputation, and customer loyalty associated with the original brand, making it easier for the new product to gain acceptance in the market.

For instance, if a well-known beverage brand introduces a line of snacks, that change is an example of brand extension. By using the recognition of the beverage brand, the company can attract existing customers who already trust the brand, potentially leading to quicker sales growth and reduced marketing costs compared to launching a completely new brand.

In contrast, other choices refer to different marketing strategies. Rebranding a failing product involves revitalizing an existing brand rather than expanding it. Creating an entirely new brand for a product suggests starting from scratch without the benefits of existing brand equity. Lastly, a limited-time promotional branding strategy typically involves temporary campaigns rather than a lasting extension of a brand into new product lines.