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What is Brand Extension and How Can it Empower Your Small Business?

Growing your business means reaching new customers with your core products and reaching core customers with new products. The latter is the challenge that brand extension can help you overcome. Brand extension can expand your market reach and build a reputation as a business that maintains a fresh and evolving offering. Learn more about brand extension below and see how Bartercard can help you grow your business.

What is Brand Extension?

A brand extension is when a company uses one of its established brand names on a new product or new product category. The strategy behind a brand extension is to use the company’s already established brand equity to help launch its newest product. The company relies on the brand loyalty of its current customers, which it hopes will make them more receptive to new offerings from the same brand.

Brand extension allows for the new product to enter the market with pre-established brand awareness. Although the new product is unfamiliar to consumers, they typically are aware of the brand that created the product, which can make it more likely for market penetration success.

There are a handful of ways a company can approach a brand extension, but before any strategy is decided, the most important piece of information to remember is to never forget what your customers’ needs are and what they expect from you as a brand.

It is easier to launch new products in different categories when the parent brand is well established. People are more accepting of the new product as it comes from a well-established brand, so if you think your brand is ready to take the plunge into a new market, make sure you are mindful of your customers’ needs and attitudes. Is your new product going to fill a problem they have?

How Does Brand Extension Work?

Brand extension works when the new and original products share a common quality or characteristic that the consumer can immediately identify. Brand extension fails when the new product is unrelated to the original, is seen as a mismatch, or even creates a negative association.

A brand extension leverages the reputation, popularity, and brand loyalty associated with a well-known product to launch a new product. To be successful, there must be a logical association between the original product and the new item and can be as obvious as offering an original product in a new form.

How Brand Extension Can Empower Your Business

Successful brand extensions allow companies to diversify their offerings and increase market share. They can give the company a competitive advantage over its rivals that don’t offer similar products, with the existing brand serving as an effective and inexpensive marketing tool for the new product.

Apple is an example of a company that has a history of effectively using a brand extension strategy to propel growth. Starting with its popular Mac computers, the company has leveraged its brand to sell products in new categories, such as the iPod, the iPad, and the iPhone.

If successful, a brand extension can help a company reach new demographics, expand its customer base, increase sales, and boost overall profit margins, enabling you to grow your business.

Drive Your Brand Extension with Bartercard

Public perception is everything. If there is no obvious association between categories, your customers may have a hard time accepting the new product and it could fail. With a marketing strategy already in place through Bartercard, however, the reputation your brand has already established should allow your new product to sail smoothly into that new category with ease.

As a Bartercard member, you have the option to purchase stock from other Bartercard suppliers at wholesale or retail rates, thus in turn, adding a new product to your product line which you can on-sell in the cash and/or trade economy. This option opens a realm of possibilities for you as a Bartercard member, as you are no longer restricted to selling just your product but to sell other unrelated products. Get started today!


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Access Bartercard for 1 month complimentary* to see if it is the right fit for your business growth.

Access Bartercard for 1 month complimentary* to see if it is the right fit for your business growth.

*Membership fee may apply. Transaction fees will still apply for any trades that occur within the first month. Monthly membership: $49 a month + T$10 + T$10 DRF.

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