Most brands start from a single product but continue to grow from multiple products. For example Nike started with joggers but now it has a large product portfolio. Some brands remain attached to a single product category, are subject to product life cycle. For example Xerox became so familiar with its product category that it died. However, brands do not follow the product life cycle and can last forever if managed properly. The added value gives the brands immortality. A brand becomes an augmented product with the intangible assets attached to it. This allows the brand to charge a premium price. The objective is to remain competitive and generate extra funds for reinvesting into brands. Many brands which were leaders from the past are no longer point of reference for example Thermos. Coke has retained its leadership by focusing on i) availability ii) affordability iii) awareness.
Brand extensions have become the hottest new topic in brand management. Once created a brand must evolve over time. Often there is a need to change the brand strategy. The brand can change in two ways by either repositioning the brand or through brand extensions. A brand as an asset must grow to continue delivering profits to the company. Line extension is extending the brand to new variants in the same product category. For example Lux has different variants. Whereas brand extension is about entering unknown markets with new products. A company can take advantage by leveraging the name of a strong brand to a new product in a new category. It assumes that the strength of brand equity is transferrable and relevant to the new category and it will help in giving the company long term sustainability. Some of the biggest brands do not stretch outside their product category like Coke. However, every brand must choose its own boundaries. Some brands are more stretchable than others, Coke is very inelastic which does not prevent it from being one of the most powerful and valuable brands of the world. Consumers accept brands moving into areas adjacent to the current offer more easily than those moving into a much diversified markets hence extensions are less risky than stretch.