Advantages and Disadvantages of Brand Extension

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Using an established brand name in new product categories is a strategy basically used as part of brand extension by many a companies. Nike did a brand extension and they gave their brand name to new categories like sunglasses, soccer balls, and basketballs. Main advantage of brand extension is that a renowned/successful brand often helps firms to introduce new product categories easier. A feedback  to the parent brand will be another possible advantage. Damage of brand image, loss of reliability due to brand extension to unrelated markets, etc are some of the disadvantages that may be caused due to brand extension.

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