A brand extension refers to when a brand launches a new product or service under and existing brand name. When releasing products through a brand extension strategy, the business can leverage the equity established through the existing brand. The advantages of this can be a readily built-in target audience for the new product. It can also be seen as cost-effective since brand awareness efforts can be minimal as the brand will already be trusted by existing customers. When a product in a brand extension truly complements the rest of the brand and resonates with the existing target audience’s needs, it can positively affect the brand image. However, if the new product has little relevance to the current brand, it can have negative repercussions.
For example, let’s look take a well-known dermatologist who decides to expand its business by starting a skincare line. The physician can leverage their medical reputation, and the skincare products will be trusted by consumers. This physician will also have a built-in market as it’s highly likely that their existing patient base will buy the products. This can be seen in the case of Dr. Harold Lancer, MD of Beverly Hills, and his product line Lancer Skincare. He was able to use the brand equity he had built with his high profile clientele to launch his anti-aging serums, hydrating face oils, and retinol creams within the skincare industry. It’s important to note that the products released under his brand extension strategy are closely related to his specialty. However, the brand extension could get confusing if Dr. Lancer’s dermatology center would launch non-invasive body sculpting services. While body sculpting fits within the beauty industry, the introduction would weaken the brand image within skincare.
Are you thinking of launching ancillary products or services to complement your practice? Take a step back and examine how your existing healthcare reputation can be leveraged? Or determine if the brand extension is the right fit for your current practice. If you haven’t yet, read my last post on traditional communication methods within Healthcare.