The effects of brand extensions

Not all brand extensions are successful and for every brand extension there is a risk of harming the corporate brand. Therefore the purpose of this thesis was to study how the consumer attitude changes on the corporate brand after vertical and horizontal brand extensions. We used two different focus groups and compared the results with theory. In upscale vertical brand extension the companies need to create credibility in a higher price, while downscale vertical brand extension are easier for companies to develop. The study indicates that a new brand name for the brand extension should be used in order to avoid damaging the quality and price on the corporate brand. In horizontal brand extension it is important to keep a main thread between the corporate brand and the extension to avoid losing credibility in the brands’ niche on the market. Further the study is a contribution for brand extensions and for further research in this subject.