Corporate Brand Extension Strategy

With the globalization of the world economy and the information era coming, the greatly rising productivity and operation level has resulted in fierce competition among enterprises. Establishing a name brand is the central part of the competition, however, developing this name brand is more difficult. All these make the enterprise concentrate more on the brand extension.The widely application of brand extension in the social economy shows the significance of brand extension research. Making full use of a costly-established brand will greatly save its owner's capital investment and time, as the new product lines under the name brand are much easier accepted by consumers. Therefore, marketing risks is decreased.For the particular cases of Chinese enterprises, there are many misunderstanding in applying brand extension strategy, such the marketing risk is commonly estimated inadequately. For the enterprises who want to ensure the success of brand extension, it is important to evaluate the risks and take effective method to avoid them.This paper consists of four chapters: Chapter one is on some basic concepts of "brand" and "brand extension", as well as the analysis on the market background knowledge and the direction in brand extension research. Chapter Two is on the causes of the brand extension. Chapter Three is on the misunderstanding in our country's practice on the brand extension, and its potential risks. Chapter Four is on the essential factors which our enterprises must think about before the brand extension, and give some constructive suggestions for the application of the brand extension.