Brands have for a long time been used to identify and distinguish organizations, companies and products, it can be compared to as the soul of a company. A brand extension is a clear channel for product innovation, which can be a powerful tool to hold a competitive advantage. Product innovations can create differentiation; raise the brands characteristic-values, extend the area of use and block competitors.For 25 years, Panos Emporio has had a leading position in the swimwear industry and in spring of 2011 the company launched their first clothing collection for men and woman, and has recently launched an online store. The company is extending their brand and now that they have a new product category they are facing a challenge, which is underlying in our research question: How can Panos Emporio, a swimsuit brand, expand their brand image and identity to their new clothing line? The purpose of this report is to highlight important factors within brand extension that could be of value to Panos Emporio and other companies facing a brand extension.The report is a qualitative study using an abduction methodology where empirical findings have been studied parallel with the theories and vice versa. We have conducted interviews and observations, and have also collected quantitative data in form of a customer interview, to gain an understanding of the reality. We have chosen to examine and observe the brand Panos Emporio by asking questions regarding the company‟s organization, brand identity and image, as well as customer attitudes. The theoretical framework is underlying in our research study, with the initiation of portraying a brands meaning, importance and structure. Furthermore theories of brand extension with an emphasis on approach strategy and its advantages and disadvantages. The empirical chapter includes, information concerning the company´s brand, collections, costumer and retailers, as well as marketing strategies, which is a part of our data presentation.Out of our theoretical and empirical part we came to the conclusion that Panos Emporio should consider making the consumers more aware of the clothing collection before launching more products within a new product category, since the lack of awareness can throw a shadow over the main product and bring down the brand image which in terms affects the brand equity. Having good knowledge regarding the brands attribute, personality, purpose, identity and the relationship with consumers is more important than whether they should extend the brand or not. Companies need to focus on building their brand equity and image, towards the customers first. Authors believe that companies can take great advantages if a strong brand name and relationship is established at first. / Program: Master in Fashion Management with specialisation in Fashion Marketing and Retailing

Background: All brands need to keep moving and to keep building their stories by bringing new and exciting products or experiences. During the last twenty years, companies have been more and more convinced that their brands are among their most valuable resources and today we see an increasing trend of brand extension attempts, however with a significant number of failures, as well.The strategies of how a brand extension should be done, have been published in several books during the last decades. Despite of this, some companies still do not see the link between brand extension and business development. There seem to be a certain lack of knowledge and understanding of the underlying factors that affect a brand extension. In this study, we would therefore like to examine and identify these different factors in order to create a greater understanding of branding strategies.Purpose: The purpose of this study is to research, describe and analyse the nature of horizontal brand extensions in order to create a theory regarding the essential key factors to take into consideration before considering an extension. Based on the theory, the hypothesis will be tested empirically in order to strengthen- or reject it.Methodology: This study is made with a deductive approach, where the theoretical framework, based on previous presented theories, has led to the conformation of our hypothesis, which has later on been applied to the findings from the empirical researches in order to confirm or discard our hypothesis.The empirical basis consists of qualitative interviews with respondents from two companies with experience from horizontal brand extension: Craft of Scandinavia and Peak Performance.Conclusion: Our conclusion from this research is that for a horizontal extension to be successful it must:‐ Be a part of a brand with a clear brand image and plan, for the brand ­‐ Fit the brand ‐ Live up to the original brand promise - Fit with the old associations and generate new, positive associations to the brand ­‐ Have high perceived quality and trust in the mind of the customer- Be a part of a risk evaluation in order to limit the risks and obtain a more realistic view of the extension. / Program: Textil produktutveckling med entreprenörs- och affärsinriktning