What is the brand stretching?

Distinguish between Brand extension and brand stretching.?

• Answer:

  Brand extension: Brand extension refers to the use of a successful brand name to launch a new or modified product in a same broad market. A successful brand helps a company enter new product categories more easily. For example, Fairy (owned by Unilever) was extended from a washing up liquid brand to become a washing powder brand too. The Lucozade brand has undergone a very successful brand extension from children’s health drink to an energy drink and sports drink. Brand stretching: Brand stretching refers to the use of an established brand name for products in unrelated markets. For example the move by Yamaha (originally a Japanese manufacturer of motorbikes) into branded hi-fi equipment, pianos and sports equipment. When done successfully, brand extension can have several advantages: • Distributors may perceive there is less risk with a new product if it carries a familiar brand name. If a new food product carries the Heinz brand, it is likely that customers will buy it • Customers will associate the quality of the established brand name with the new product. They will be more likely to trust the new product. • The new product will attract quicker customer awareness and willingness to trial or sample the product • Promotional launch costs (particularly advertising) are likely to be substantially lower.