When companies develop new products, they face a critical strategic choice of whether they should leverage an existing brand, create a new one, or something in between. The Brand-Product Matrix is a useful framework that clarifies these decisions. It categorizes branding strategy based on two axes:
Existing vs. New Brand Names
Existing vs. New Product Categories
The result is four branding strategies:
Line Extension
Category Extension
Multibrands
New Brands
This blog post explains each strategy, shows when and how to use it, and provides some real-world examples.
The Brand–Product Matrix
| Existing Product Category | New Product Category | |
|---|---|---|
| Existing Brand Name | Line Extension | Category Extension |
| New Brand Name | Multibrands | New Brand |
1. Line Extension
Same brand name, same category
What It Is:
Introducing new variants of an existing product under the same brand name. These could be new flavors, sizes, formats, or formulations.
Objectives:
Reach new segments
Offer variety to existing customers
Block competitors from shelf space
Risks:
Cannibalization of existing products
Dilution of brand meaning
Customer choice overload
Examples:
Coca-Cola → Coca-Cola Zero, Coca-Cola Vanilla
Oreo → Double Stuf, Thin, Golden Oreo
Head & Shoulders → Anti-dandruff Shampoo for Men, Sensitive Scalp
When to Use:
Strong brand equity in the category
Clear consumer demand for variety or personalization
Low cost of development compared to launching new brands
2. Category Extension
Same brand name, new category
What It Is:
Using an existing brand name to enter a different product category—often to capitalize on brand trust and recognition.
Objectives:
Transfer brand equity to new markets
Reduce launch costs and risk
Expand the brand’s "permission space"
Risks:
Brand stretch too far → credibility loss
Negative spillover if the extension fails
Confusion about brand identity
Examples:
Dove → From bar soap to deodorant, body wash, shampoo
Colgate → From toothpaste to toothbrushes and mouthwash
Honda → From motorcycles to cars to generators
When to Use:
The brand has strong associations that are relevant across categories (e.g., trust, cleanliness, performance)
Opportunity to leverage shared capabilities, such as distribution or R&D
Competitor landscape allows brand trust to create an edge
3. Multibrands
New brand name, same category
What It Is:
Creating multiple brands within the same product category, often to target different customer segments or occupy more shelf space.
Objectives:
Maximize market share
Appeal to different psychographics or price points
Minimize channel conflict or brand conflict
Risks:
Internal competition and cannibalization
Increased marketing and management complexity
Reduced economies of scale
Examples:
PepsiCo → Pepsi, Mountain Dew, Sierra Mist
Unilever → Dove, Axe, Rexona (deodorants)
Toyota → Toyota, Lexus, Scion (cars)
When to Use:
You want to segment the market by price, lifestyle, or demographics
The existing brand has limited relevance to a new target segment
You need to compete against multiple rivals in the same space
4. New Brands
New brand name, new category
What It Is:
Launching an entirely new brand in a new product category, often when there’s no existing brand equity that can be leveraged effectively.
Objectives:
Enter a new market without baggage
Build a distinct identity from scratch
Avoid negative associations or limitations of existing brands
Risks:
High cost of brand development
Longer time to establish trust and awareness
Uncertain product-market fit
Examples:
Procter & Gamble → From detergent (Tide) to diapers (Pampers)
Apple → Launched Beats by Dre as a standalone brand
Nestlé → Created Nespresso to differentiate from main Nestlé brand
When to Use:
The current brand lacks credibility in the new category
The new category requires a radically different brand personality
You’re targeting a new audience with no overlap
Strategic Considerations
1. Brand Equity Transfer
Line and category extensions benefit from existing brand equity.
Multibrands and new brands require investment but provide flexibility.
2. Cannibalization vs. Market Coverage
Extensions risk cannibalization but can block competitors.
Multibrands aim for deeper market penetration.
3. Customer Perception
Over-extension can confuse or alienate loyal customers.
Under-leveraging a strong brand can waste brand equity.
4. Operational Complexity
More brands = more cost (advertising, management, support, logistics).
Fewer brands = easier integration but less segmentation power.
How to Apply the Matrix in Practice
Step 1: Define the Product Opportunity
Is it a new need or a variant of an existing one?
Who is the target audience and how do they perceive your brand?
Step 2: Assess Brand Fit
Does the existing brand promise align with the new product?
Will customers accept this brand in the new context?
Step 3: Evaluate Portfolio Impact
Will this new product support or dilute current offerings?
Are you creating internal brand conflict?
Step 4: Choose Branding Strategy
Line extension if close fit and same category.
Category extension if equity transfer is viable.
Multibrand if targeting new segments in same category.
New brand if building a fresh identity is critical.
Conclusion
The Brand–Product Matrix is a strategic decision framework whether you’re launching a flavored beverage, a smart appliance, or a luxury offshoot, choosing the right brand architecture is crucial to long-term success. Use your brand assets wisely: extend where there's credibility, segment when there is opportunity, and create new brands when there is no alternative.
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