The two sides of brand equity and the impact of brand extensions

With developments such as an increase in competition, busier and more sophisticated consumers, companies attempt to achieve a competitive advantage through increased brand equity of their product offerings. Increased brand equity often translates into increased brand loyalty, which in turn means reduced cost in acquiring new consumers. Brand equity can be measured from a company and consumer point of view. As 80 to 90% of new products have either been brand or line extensions, this paper will consider the impact of product extensions on both brand equity approaches. The focus of this paper is to show the different brand extension objectives and outcomes for both consumer and company measured brand equity. It is suggested that both consumer and company brand equity approaches are equally important for product development decisions.