branding

Every branding expert will tell you that a brand is much more than a product or service—a brand is a promise. People fall in love with brands, trust them, develop strong loyalties to them, buy them, and believe in their superiority. As brand design legend Walter Landor said, “Products are created in the factory. Brands are created in the mind.”

Brand stretching occurs when companies use an established brand name to introduce unrelated products. The goal of brand stretching is to capitalize on brand recognition and consumers’ trust. It can be a sound strategic choice for several key reasons: It helps to lower costs. It accelerates speed to market. It adds extra profi ts relatively fast while limiting financial risks, and ideally marketers expect that several products will promote each other under the same brand name. It may also be used as a deceptive form of advertising. It happens when a tobacco company introduces non-tobacco products in order to circumvent advertising restrictions.

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Sources:
http://www.thehindubusinessline.com/2005/06/17/stories/2005061701060900.htm
http://www.allbusiness.com/management/1045288-1.html