Success Factors of Brand Extension

Launching new products can be an attractive growth strategy, however it is not without risks. An increasingly popular approach to reducing risk, when launching new products is to follow a brand extension strategy. Dr. Leif E. Hem have finished him research about the success factors of brand extension in September 2001, his journal name is “Factors Influencing Successful Brand Extension”. He was suggesting four factors that influencing successful brand extension, the factors were:

1. Similarity

The extensions categories similarity to the parent brand category.

2. Reputation

The higher the perceived reputations to the parent brand, more favorable should the brand extensions.

3. Perceived Risk

The perceived risk associated with the extension category

4. Innovativeness.  

The higher consumers innovativeness, the more positive will be the evaluations of the extended brands.