Horizontal brand extensions : the key factors of success

Background: All brands need to keep moving and to keep building their stories by bringing new and exciting products or experiences. During the last twenty years, companies have been more and more convinced that their brands are among their most valuable resources and today we see an increasing trend of brand extension attempts, however with a significant number of failures, as well.The strategies of how a brand extension should be done, have been published in several books during the last decades. Despite of this, some companies still do not see the link between brand extension and business development. There seem to be a certain lack of knowledge and understanding of the underlying factors that affect a brand extension. In this study, we would therefore like to examine and identify these different factors in order to create a greater understanding of branding strategies.Purpose: The purpose of this study is to research, describe and analyse the nature of horizontal brand extensions in order to create a theory regarding the essential key factors to take into consideration before considering an extension. Based on the theory, the hypothesis will be tested empirically in order to strengthen- or reject it.Methodology: This study is made with a deductive approach, where the theoretical framework, based on previous presented theories, has led to the conformation of our hypothesis, which has later on been applied to the findings from the empirical researches in order to confirm or discard our hypothesis.The empirical basis consists of qualitative interviews with respondents from two companies with experience from horizontal brand extension: Craft of Scandinavia and Peak Performance.Conclusion: Our conclusion from this research is that for a horizontal extension to be successful it must:‐ Be a part of a brand with a clear brand image and plan, for the brand ­‐ Fit the brand ‐ Live up to the original brand promise - Fit with the old associations and generate new, positive associations to the brand ­‐ Have high perceived quality and trust in the mind of the customer- Be a part of a risk evaluation in order to limit the risks and obtain a more realistic view of the extension.Program: Textil produktutveckling med entreprenörs- och affärsinriktnin