When Gallo came out with wine coolers, on the other hand, the company wisely distanced itself by building a separate brand, Bartles & Jaymes. While the Gallo brand name could have helped create consumers’ acceptance of this product, the wine cooler’s soft-drink image too strongly contradicted the brand-enhancement strategy of the wines.
Without a doubt, the cost of line-extension failures can be great. The inadequacies of Apple’s Newton, for example, cast a shadow of doubt on the company’s core competencies. But even when line extensions fail, they don’t necessarily damage their parents fatally. Consumers are often willing to forgive strong brands when they stumble. What’s more, failed extensions are usually withdrawn sooner rather than later, giving them less time to do damage.
Brand extension is a double-edged sword. Even a successful extension can damage its parent’s image. However, the strategic use of extensions can also help reshape the image of the parent brand.