human
Write a summary to discuss the concept of brand extensions and how they that can be used by businesses to introduce new products into a market.
assistant
The purpose of this essay was to discuss the concept of brand extensions and how they can be used by businesses to introduce new products into a market. The author argued that brand extensions are very common today because most businesses avoid the risk of new products performing poorly. They also help the parent brand to receive positive feedback, increase its consumer base, enhance competitiveness, and strengthen its control over a market.
human
essay to discuss the concept of brand extensions and how they that can be used by businesses to introduce new products into a market. Exapnd on the summary above.
assistant
##Introduction
One of the most recurrent challenges for businesses in the contemporary world is achieving market leadership. Experts argue that the most effective strategy that most businesses use to remain competitive in their respective markets is branding (Davis, 2010).
It involves giving a product or service a particular image identity that matches the preferences of consumers in the market. However, due to challenges associated with introducing new products in a market, businesses have developed a new concept called brand extension (Davis, 2010).
It involves using a certain product or service identity to introduce new ones. The dynamics of doing business have changed a lot, with most businesses diversifying their interests by introducing new products via established brands.
Studies have established that brand extensions are very common today because most businesses avoid the risk of new products performing poorly (Davis, 2010). This has made established companies to use their brands as a strategy for growth.
Although this concept attracts negative reviews from critics, several businesses have proved that brand extensions play a crucial role as strategies for growth in any market (Wobben, 2006).
##Discussion
According to marketing experts, brand extensions are among the most reliable strategies that businesses in the contemporary world can use to enhance their brands (Davis, 2010). There are two major reasons as to why brand extensions are good and cannot compromise an already established brand.
First, line extensions provide a business with ready market any time they want to introduce a new product. The acceptance rate of products or services introduced into a market through an established brand is higher and faster as compared to those that build their brand from zero (Wobben, 2006).
Second, line extensions help the parent brand to receive positive feedback, increase its consumer base, enhance competitiveness, and strengthen its control over a market. Experts argue that line extensions help a parent company to expand its brand equity (Davis, 2010).
Brands are assets to business that use them to introduce new products because they complement their marketing strategies, as well as create a new source of revenue (Wobben, 2006).
Although brand extensions are very effective, it is important for business that introduce their products this way to understand that success is highly determined by the quality of products (Wobben, 2006). This means that the parent brand can be very successful, but the product it introduces can fail to replicate the same level of market performance.
In order to ensure that brand extensions produce the desired results, it is important to consider two important factors. First, consumer loyalty to the parent brand helps a business to predict the level of acceptability that their products are likely to receive (Wobben, 2006).
Second, the businesses that use other brands to introduce their products should ensure that they match the needs of consumers with the parent brand in terms of quality and market prices.
This will make it easy for their products to be accepted, while at the same time avoid any possibilities of compromising the reputation of the parent brand (Davis, 2010).
##Conclusion
Brand extensions are a good strategy for companies and also a good way of introducing new products or services in a market. It can be used to introduce a product to a new market or a new product to an existing market. This strategy helps businesses to increase their brand equity, expand their consumer base, and make more revenue.
Although line extensions provide opportunity for new products to be easily accepted, it is important to note that products have a major role to play in determining their level of success. Brand extension is an asset that can boost the growth of a company if it is used effectively.