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Brand Extension

In: Business and Management

Submitted By Lola01
Words 647
Pages 3
Brand extension, or using a brand that is already set in the market to join a new product category is a method that is often used in order to diminish the risks of introducing a new product. Choosing a right strategy when expanding a product category is primordial for a company. Introducing a new product carries many risks and costs: it is costly because the development of a new product always entails many expenses, such as marketing, and it is dangerous because it is very hard to predict consumer reaction to a new product, especially under a new brand name. By going ahead with a brand extension a company can partially solve these two issues, by launching the new product under an existing brand name will reduce marketing and distribution costs and might attract consumers towards the good as they will go for a “known” brand.
Levi-Strauss although being one of the world’s most known maker and distributor of denim and casual wear should consider a brand extension of larger clothes that target the growing plus size customer segment in the United States. This segment is a growing market, and many stores with incredible brand equity are not taking advantage of this growing segment. In fact, this segment has grown to 34 percent of the population, both male and female of all ages, and continues to grow dramatically every year. Also, this segment is a $27 billion dollar opportunity, and also appears to be increasing every year. Therefore, by this action of not manufacturing larger size clothing Levi-Strauss are not only limiting their customer base and profits but also alienating those who cannot wear their garments due to their size. The percentage of large and outsize people in Europe and the United States is vast compared to those who have average size or undersize proportions.
By only making the clothes for the “model” type populace the customer base they could have...

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