Many times a firm will take advantage of its popular, well-known brand by developing brand extensions because they know that the brand equity of the original or parent brand will be transferred to the new product. If the new product is of poor quality, it can damage the reputation of the parent brand and if a new product is of excellent quality, it can enhance the parent brand.

1. Explain, in your own words, the difference between a brand extension and a line extension.
2. With this in mind, offer an example of a successful brand extension, where both the parent brand and the new brand benefited. Why do you feel it was successful?
3. Offer an example of an unsuccessful brand extension, where the new brand likely damaged the parent brand equity. Why do you feel it was unsuccessful?
4. Shinola (Detroit's own watch, bike and leather products company) is extending their brand again by opening a hotel (Links to an external site.) in Detroit in Fall 2018. From the standpoint of brand extensions and brand equity, comment on the risks and benefits of this strategy. You may want to do some online research to support your comments. MKTG1010