Then you have three main strategies from which to choose.

1. Develop a new brand especially chosen for your new product or service.

2. Apply your existing brand in some way (parent brand extension).

3. Combine your new brand with the existing one (parent sub-brand).

Each strategy has its good and bad points.

1. Developing a new brand offers the potential to create enormous equity in a unique image, but is expensive to do properly with no assurance of success.

2. Applying your existing brand can lower production costs, but weaken the
original brands market position by confusing your customer.

3. Combining new with old seems to offer the least risk, but could bring untold harm to your parent brand if the new brand fails.

Current research says

Parent brand extension only works if there is a close fit eg if your parent brand is associated with Hot then an extension for Cold is unlikely to work.

A successful close fit extension will contribute significantly to your parent brand and allow even further extension.

The most successful advertising strategy for your parent brand extension is the one that extols the virtues of the extension rather than focussing on the parent brand.

Where to from here?

Brand extension is a specialist area and not to be taken lightly.

The good news is, there are a myriad of books written on the subject including the one I highly recommend as the easiest to read, Strategic Brand Management - building, measuring, and managing brand equity
by Kevin Lane Keller ISBN?0-13-120115-8.