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Exploring The Role Of Brand Equity In Brand Extension

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Starbucks Brand Equity Brand Extensions

We are happy to answer marketing questions of all types here on Branding Strategy Insider. Today’s question comes from Manisha a marketer in Bangalore, India.

“What is the role of brand equity in brand extensions? What should the marketer keep in mind related to brand equity before extending the brand? Please give some examples.”

Manisha, thanks for your question. Before one extends a brand into a new product or service category, one must be clear on what the brand stands for, what people associate it with and what its personality is. Then, one must assess if these qualities will be beneficial (and not problematic) in the new product or service category. Conversely, one must determine what entering the new product or service category will do for (or to) the brand. Ideally, it will enhance its perception and broaden its appeal, not damage its perception or limit its appeal.

Some examples: It is dangerous for a luxury car brand to extend into a value segment. While there may be some incremental sales potential in that segment, the extension will most likely destroy (or at least significantly diminish) the brand’s status cache. Other examples of unsuccessful brand extensions:

  • Levi’s classic tailored suits (What do people most often associate with Levi’s and how does that relate to suits?)
  • Bayer “Aspirin-Free” (What is Bayer most often associated with and how does that relate to “aspirin-free” and if Bayer feels the need to offer an “aspirin-free” product, what does that say about their core products?)
  • Bic perfume in your pocket (Because Bic is associated with small, less expensive, disposable things that fit in your pocket? What’s wrong with this thinking?)

On the other hand, here are some brand extensions that worked:

  • Jell-o (pudding, pudding snacks)
  • Dole (pineapple juice, fruit juice, fruit salad, fruit juice frozen fruit bars)
  • Woolite (fabric wash, carpet cleaner spray)

Here are some current brand extensions. What is your assessment of each of these?

  • Cheetos lip balm
  • Hot Tamales sugar free gum
  • Starbucks coffee liquor
  • Mr. Clean Car Washes

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2 Comments

Amydostafford on August 26th, 2011 said

Hot Tamales Sugar Free Gum and Starbucks coffee liquor definitely wet my palette. They are both flavors I enjoy. Not a fan of Cheetos lip balm, nor do I feel it would stay on for those who would but to each their own.

One successful brand extension that sticks out in my mind is Victoria’s Secret Pink. The lingerie company not only extending their brand, but was able to within their existing four walls of VS.

Roland H. on September 01st, 2011 said

My assessment:
•Cheetos lip balm – Doesn’t make sense. Cheetos is a snack that’s great to eat, but not something you necessarily want to have on your lips or something you want to smell at various times throughout the day.

•Hot Tamales sugar free gum – This makes sense. many people enjoy Hot Tamales and the flavor of it (without all the sugar!) would probably make it a natural extension for fans.

•Starbucks coffee liquor – This makes sense since people have mixed coffee with alcohol in the past. In addition, coffee is a flavor that extends beyond the beverage (think coffee ice cream).

•Mr. Clean Car Washes – This makes sense. Mr. Clean gets things done in your house – why wouldn’t he get it done with your car? Plus, you know that Mr. Clean is such a rugged, manly icon that he can handle any amount of dirt found on your car.

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