Below Laura Reis responds to my question – “Is brand extension is ever a good idea?”
Thanks for your email Sean. The laws of branding are simple, but applying them is not always easy. There are times when line extension is the best way to go. But you need to remember that it does dilute the brand in the mind.
Some companies focus on a customer and then sell them a wide variety of services. USAA is a good example, selling all types of insurance to Army officers. The line is extended but the customer is focused.
The software industry does have some differences. Microsoft can get away with rampant line extension because they have a monopoly on the operating system. But in areas where they face strong competition this strategy has not worked, MSN, Money are far behind.