The cost of developing a new brand can be prohibitive, resulting in a fairly recent trend of extending established brands to cover new products that a company is looking to introduce. Consumers will already know the name, so the challenge is to ensure that the product matches the reputation that a good brand has established. This challenge can be dangerous to an established brand, as unfavorable products can actually cause damage to the existing business. However if a new product under a recognized brand does prove to be successful, it can actually increase the sales of the existing products.
The obvious benefit is that the cost of introducing new branding is minimized. Consumers will be used to seeing the name, logo and colors which should always be common across the range of the brand. Every brand needs constant reinforcement; there is no room for complacency when so many business sectors are extremely competitive. A good Branding Advertising Agency will not only advise companies on where to spend the advertising budget, but also contribute to the overall strategy the client wants to adopt.
Figures suggest that extending a brand range is cheaper than launching new branding, but may not be as successful. When a CEO considers extending a brand, the agency given the task of developing recognition and acceptance from the consumer will majorly contribute to the expansion.
Good brands can justify higher prices than its competitors. The market needs to be constantly examined especially at times when the economy is sluggish. If the importance of price increases, it can be dangerous for a brand not to react to moves by competitors. It is wise to get expert advice and an objective opinion on strategy, in which agencies play a crucial role.