In addition to promoting brand equity, brand extensions can grow incremental sales up to 38 per cent and contribute as much as 30 per cent to parent brand sales, Nielsen said in a statement.
Nielsen, which is a provider of market insights and information, studied top brands in 46 FMCG categories and 82 brand extensions in food and non-food categories to come to its conclusions, it added.
"Brand extensions, or stretching your existing brand, increase your chances of innovation success. Not only do brand extensions leverage the equity of the parent brand, but they also lead to faster adoption and deliver higher marketing efficiency," Nielsen India client business partner Arun Chogle said.
According to the study, when the parent brand was a leader in the category, 59 per cent of brand extensions were also successful.
When the parent brand was not among the top five players, 35 per cent of brand extensions were successful, it added.