Topic 8: Advantage and Disadvantage of Brand Extension

Question 1

What is the Ansoff Growth Matrix?

Answer 1

1. Current Product + Current Market = Market Penetration strategy
2. Current Product + New Market = Market Development strategy
3. New Product + Current Market = Product Development strategy
4. New Product + New Market = Diversification strategy

Question 2

What are the advantages of Extensions?

Answer 2

1. Facilitate new product acceptance - improve brand image and reduce risk perceived by consumers
2. Provide feedback benefits to parent brand - enhance parent brand image and clarify brand meaning

Question 3

What are the 4 disadvantages of Brand Extensions?

Answer 3

FSEC

1. can fail and hurt parent brand image
2. can succeed but hurt parent brand image
3. can encounter retailer resistance
4. can confuse or frustrate consumers