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

Nothing Armani can't do.

We all know the world famous fashion designer, particularly noted for his menswear: Giorgio Armani. By 2001 he was acclaimed as the most successful designer to come out of Italy, with an annual turnover of $1.600 billion, and a personal fortune of $5 billion!

What most people don’t know is that Armani, the company he formed in 1975, is more than just a fashion house that designs haute couture. The company also manufactures, distributes, and retails haute couture, ready-to-wear, leather goods, shoes, watches, jewelry, accessories, eyewear, cosmetics, and home interiors.

And there is even more! Armani also plans a chain of luxury hotels and resorts in several big cities all over the world. Another creative idea of Armani was to join Samsung and design the Giorgio Armani phone. The company also operates a range of cafés worldwide, in addition to a bar, restaurant, and nightclub. And to conclude the row, Armani also creates furniture, lamps, linens and dining essentials.

Despite the fact that Giorgio is known as a workaholic, who can sometimes be rude and arrogant, the man succeeded to develop a complete empire!

Virginie Bohez

Ultimate extension

As an introduction on the already intensively discussed subject of brand extension , I would like to start by presenting world’s most stretched brand ever: Virgin.

Though most people know Virgin as an airline service, it is much more than that.
Virgin entered the world as a music record shop but this well-known brand can now be found in various product categories. Their activities go from broadcasting over aviation to cosmetics.

But extending a brand also includes taking very high risks. If your market strategy fails, it might damage your brand image or leave a financial hangover behind.
Even specialists like Virgin sometimes fail at convincing their target group. The most known example of a “ Virgin – failure “ is without a doubt the launch of their own Virgin cola.

Nevertheless, brand extension can be a very effective way of refreshing your brand!

Maud Bossuyt