Question:What are the costs to a brand extension?

Answer:There are a number of instances in which a brand extension has hurt the image of the brand concept. This is particularly true if the brand extension involves some kind of disaster of negative publicity. When Audi had a problem with sudden acceleration in one of its models, all models with the Audi name were hurt (although the Quattro—an Audi car with a different name—was not.

A core brand concept can also be diluted if it is extended to too many different product categories. What does Samsung stand for if it is linked to such disparate products as life insurance, automobiles, microwave ovens and the like? Also, a successful parent brand does not always guarantee a successful brand extension. Bic is a great brand in the context of pens and disposable razors, but perfume? Well, that’s another matter altogether.

For more on brand extensions, read our tutorial.