A strong brand name is an invaluable asset; managers must know when to exploit it, when to protect it, and how to tell the difference between the two. Because using an established brand name substantially reduces new-product introduction risks, there is an almost irresistible pull to “extend” brand names to new products. Doing so can be enormously profitable, but it can be dangerous, too: In the worst case, an ill-conceived brand extension may seriously damage the original product and preclude the establishment of another brand with its unique associations and growth potential. This article examines both the advantages and potential pitfalls of brand extensions.
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4. Tauber (August–September 1988).
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7. M.W. Sullivan, “Brand Extension and Order of Entry” (Chicago: University of Chicago, Working Paper, February 1989).
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13. Landor (1988).
14. K.L. Keller and D.A. Aaker, “Managing Brand Equity: The Impact of Multiple Extensions” (Berkeley: University of California, Working Paper, February 1990).
15. M. Sullivan, “Measuring Image Spillovers in Umbrella Branded Products,” The Journal of Business, July 1990, in press.
16. E.M. Tauber, “Brand Franchise Extension: New Product Benefits from Existing Brand Names,” Business Horizons, March–April 1981, pp. 36–41.
17. Sullivan (1989).
18. For more on creating brand equity, see D.A. Aaker, Managing Brand Equity (New York: The Free Press, 1991).
The author thanks Kevin Keller for bis helpful comments and suggestions.