Brand Extensions: Is it Time to Broaden Your Horizon?

 

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When I interviewed graphic designers for my agency, I’d always get a touch nervous once they claimed they might double as an excellent copywriter. That’s because good design and good copywriting require two different skill sets rarely found in one person. I’d experience an equivalent nervous reaction when clients discussed “brand extension,” or launching a replacement product associated with their existing brand. it isn’t as easy because it seems.

By definition, a brand extension (product or service) should offer a special benefit and/or attract another market or market segment than its parent brand. Brand extensions seek to maximize the positive perceptions and associations of 1 brand, translating them to the new brand. for instance , if customers associate safety with a particular company, they’ll infer that any product from that company is safe. Loyal customers of a parent brand could also be more willing to undertake brand extensions. This, in turn, may decrease the value of selling the new product. The extension may strengthen the parent brand also .

Notice I keep using that pesky word “may.” Here’s why: many brand extensions find yourself disasters, draining the marketing budget and diluting their parent brand within the process. In their rush to grow, even large corporations overlook the straightforward incontrovertible fact that brands should only be extended when the new product or service addresses genuine consumer needs and is predicated on accurate knowledge of the parent brand’s core strengths within the minds of its customers. Having more products doesn’t always mean achieving more profit – especially within the future .

Let me offer you a real example of a poorly thought-through brand extension. shortly ago, a number one manufacturer of motorcycles introduced cake-decorating kits. One nationwide survey “awarded” the merchandise “worst brand extension.” in any case , the baking world and therefore the biker world don’t seemingly intersect. the merchandise doesn’t seem to suit with the brand’s core values. 

What a Brand Extension Should Do:

A brand extension should:

 – strengthen the prevailing brand

 – address additional opportunities or find new uses

– bring new users to the brand as long as existing costumers aren’t postpone by the extension

A brand should enter a replacement industry as long as it can do so without losing relevancy (i.e., cake-decorating example above). The new market should be a natural fit with the first market, because most brands become linked to a selected industry within the consumer’s mind. As a result, few brands can wander outside their flagship market. Virgin (as in Virgin Mobile, Virgin-Atlantic, etc.) is one example of a brand whose values transcend industry segment. 

Another way a brand extension are often successful is by creating a replacement category versus getting into an existing one, where it’s going to stray among skilled competitors. Before Starbuck’s, who would dream of paying such a lot for a cup of Joe? Starbuck’s revolutionized an industry with its introduction of a replacement category: the European-style coffeehouse. 

Keeping your focus narrow doesn’t suggest you’ve got to hold a limited line . for instance , Starbuck’s has stuck (for the foremost part) with its original market, but offers many choices thereto market, including extensions like liqueur . Companies who stay focused on a specific market are perceived as specialists, and specialists are usually thought to understand more or be better.

Ask Yourself 5 Key Questions:

If you’re considering a brand extension, ask yourself:

1. what’s the long-term vs. short-term impact of the extension to my company and parent brand?

2. Is my parent brand strongly related to a particular product category or can it step into new markets?

3. What value does the extension increase my parent brand?

4. What unmet customer need does the extension serve?

5. How does the extension leverage my brand’s strengths while avoiding its limitations? 

As you calculate revenues from sales of your brand extension, make certain to tally up its true costs in terms of brand name erosion also . Maintaining long-term brand health is typically more important than short-term dollars.

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