Interesting Results

Strategic Benefits of Advertising Brand Extensions

Brand extensions (new products launched using a familiar brand name) are often introduced to capitalise on the popularity of established brands. However, a 2003 study¹ suggests that advertising brand extensions can benefit the original brand too, at least for some consumer products. Advertising a brand extension increased the popularity of the original brand in the study, but there was no evidence that advertising the original brand influenced the popularity of the brand extension. The study’s authors speculate that the reason for this is that there is a stronger link between the brand name and original product than there is between the brand name and extension, therefore advertising for the brand extension might conjure up the original brand in the consumer’s mind more than the original brand’s advertising is likely to do for the extension.

¹ Balachander, S. and Sanjoy Ghose (2003), “Reciprocal Spillover Effects: A Strategic Benefit of Brand Extensions”, Journal of Marketing, 67(1), 4-13.