ELI5: Explain Like I'm 5

Brand extension

Brand extension is like when you have a favorite toy, let's say a toy car, and you like it so much that you also want to have a t-shirt with the same picture of the car on it. The company that makes the toy car decides to create more things with the picture of the car on it, like stickers, backpacks, and even lunch boxes. They do this because they know that people who like the toy car would also like to have other things with the same picture on it. This is called brand extension.

The same thing happens with food and drinks. Let's say you like a certain brand of soft drink. The company that makes the soft drink might decide to create other drinks, like juice or energy drinks, with the same name and logo. They do this because they know that people who like the soft drink might also want other drinks from the same company.

Sometimes, brand extension works really well, and people love the new products just as much as the original one. Other times, it doesn't work so well, and people don't like the new products as much. But companies keep doing brand extension because it's a way to make more money by selling more things to people who already like their products.
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