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Brand Extensions: The Good, the Bad, and the Ugly

A strong brand name is an invaluable asset; managers must know when to exploit it, when to protect it, and how to tell the difference between the two. Because using an established brand name substantially reduces new-product introduction risks, there is an almost irresistible pull to "extend" brand names to new products. Doing so can be enormously profitable, but it can be dangerous, too: In the worst case, an ill-conceived brand extension may seriously damage the original product and preclude the establishment of another brand with its unique associations and growth potential. This article examines both the advantages and potential pitfalls of brand extensions.

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