According to AMA, the American Marketing Association, a line extension refers to,
A new product marketed by an organization that already has at least one other product being sold in that product/market area. Line extensions are usually new flavors, sizes, models, applications, strengths, etc.”
As you expand your line of products, it is important to differentiate your new product or service from existing ones, while maintaining overall brand consistency.
For example, if you currently make chocolate bars and you introduce a new flavor containing dried fruit, then you could show the new flavor not only by printing the words on your packaging but also by varying the color of the packaging. Using an icon or illustration can also help customers distinguish the new flavor. The wording, the color, and the icon will all help your customer to recognize your new flavor.
A good example of how to handle brand extensions is the ad campaign for Rockstone Tavern.
When it came time to create an advertising campaign to promote food and drink specials, and concerts, we created a series of ads with easy to identify promotions. We chose one design style with three variations on color to help customers easily identify the type of promotion being advertised. A consistent metallic background was used in all three types of ads, with the background for the beverage specials in silver, gold for food specials, and musical guests with a blue background.
As you expand your line of products or services, keep in mind that your customers need to be able to recognize your overall brand first. From there, they can identify new lines of products or services by distinct visuals such as wording, color and imagery.