Choose your direction !

Choosing for brand extension is a major decision and therefore needs a thorough research. A first important decision to make is whether you are going to implement a horizontal or a vertical extension. But what exactly is the difference between those two?

The main difference is quality and price. If you extend your brand in a vertical way, you produce a product that has a different level of quality or price than your parent brand. While in a horizontal extension, your price – and quality level stays the same but you enter a new product category.
( Graph = example )

In this article they did a research on how a vertical brand extension affects the parent brand. The most important conclusion can be recapitulated in just one word: distancing. If a producer of high-quality products decides to extend to a low – quality product, he has to make sure that there is some distance between the core brand and the new product. Especially when there is a difference in quality, the damage to your parent brand can get rather high.

Anyhow, vertical as well as horizontal extension, can strengthen your brand image and increase your sales!


Maud Bossuyt