Marketing expert warns against brand extensions for new products

Monika Kruger • October 28, 2026 • 2 min read

Marketing expert Rok Hladnik warns brand extensions for new products may confuse customers and dilute focus, recommending separate identities instead.

Rok Hladnik, founder of Flat Circle, discusses brand strategy risks in Slovenia.

A Slovenian marketing agency owner argues that introducing a new product line under an established brand often creates customer confusion and weakens the brand’s focus. His recommendation is to develop a separate brand identity, even if it means building from the ground up rather than expanding an existing one.

Why new brands outperform brand extensions

Rok Hladnik, founder of Flat Circle, contends that adding unrelated products to a single brand frequently leads to unintended consequences. His agency, based in Slovenia, serves ecommerce businesses worldwide. He has observed brands struggle when attempting to serve diverse audiences under one identity.

There’s nothing wrong with applying learnings to a new company, Hladnik states. His perspective stems from experience with direct-to-consumer brands that risked weakening their core messaging by introducing new product categories. For instance, companies like Yeti expanded from coolers into tumblers.

Hladnik’s strategy centers on two critical questions: Does the new product address an existing customer need? And can it be developed without draining resources from the primary brand? His conclusion frequently points to starting anew rather than expanding.

Choosing between expansion and a standalone brand

Hladnik differentiates between two approaches: either adapting to customer feedback or establishing a fully independent brand. The first method involves studying purchasing behavior—identifying what customers already buy and what unresolved problems they face. The second requires treating the new venture as a separate business, even if it shares supply chains or marketing teams.

A brand has its own systems and creative processes, he explains. Assuming success from one product can be copied to another rarely works. His caution applies to brands that believe they can replicate advertising campaigns or production methods without adjustments. For example, a manufacturer optimized for one product line may not meet the scale or quality demands of a new category.

Avoiding mistakes is essential. Hladnik identifies two warning signs: reducing quality to cut expenses and neglecting brand positioning. Customers notice the drop in quality, which sends the wrong signal. He also cautions against overcommitting to a new brand before confirming demand—a misstep he has seen brands make when prioritizing growth over validation.

AI’s limitations in product strategy

Hladnik acknowledges that AI tools can analyze customer data to forecast purchasing trends, but he warns that the technology relies on accurate input. The wrong inputs can lead to huge mistakes. Brands must still test assumptions in real-world conditions, particularly when launching a new brand.

His agency focuses on brands doing six to eight figures annually and looking to reach the next level, helping them determine whether to expand under their existing brand or create a separate one. The decision depends on whether the new product aligns with the core audience’s needs or risks confusing them.