Brand extension: the strategy with a less than 50/50 chance of success

摘要

What strategy could you propose to management that they will like the most - but which has, at best, only a 50-50 chance of success?The answer: brand extension.The reason: because executives believe it's a low-risk strategy. The reality: in health it's at least as risky as launching a new brand. In fact: it may be the worst strategy you can choose - as many otherwise very successful brands have found to their cost. Senior management and many marketing executives believe that the least risky way to grow a business is by extending existing successful brands. Launching a new brand is time-consuming, it may need a significant marketing budget to create consumer awareness and growing new brands is a long-term commitment with no short-term boost to profits. Managers believe they can reduce costs and risks by using an established brand to accelerate consumer recognition and trust for a new product.