Strategic Considerations For Extending Brands

Derrick DayeAugust 17, 202164733 min

Marketers should think about the following when considering brand extensions.

Successful Brand Extensions – Some Examples

•Jell-o (pudding, pudding snacks)
•Crayola (markers, pens and paints)
•Dole (pineapple juice, fruit juice, fruit salad, fruit juice frozen fruit bars)
•Ivory (soap, dishwashing liquid, gentle care detergent)
•Woolite (fabric wash, carpet cleaner spray)
•Arm & Hammer (toothpaste, deodorant, laundry detergent)

Question: For each brand, what was the transferable core brand association that made a successful extension possible?

Unsuccessful Brand Extensions – Some Examples

•Bic perfume (leveraging the “small disposable pocket items” association???)
•Levi’s tailored classic suits – What is Levi’s primary association? (casual clothes)
•Campbell spaghetti sauce – Why didn’t “tomato sauce” transfer from Campbell’s soups to spaghetti sauce?
•McDonald’s Arch Deluxe (for adults) – What is McDonald’s primary association? (fast-food for kids)
•Bayer “Aspirin-free” – What is Bayer’s primary association? (aspirin)
•Volvo 850 GLT sports sedan – What is Volvo’s primary association? (safety)  What is a primary proof point? (boxy armored car styling)
•Or, an all time favorite, New Coke (What is Coke?  “It’s the real thing” with its long-time secret formula.)

The Most Common Brand Extension Problems

•Extending into a category in which the brand adds nothing but its identity (its products or services are not significantly different from current products or services in the category)
Extending through opportunistic brand licensing without regard to impact upon the brand
•Extending into lower (and, sometimes higher) quality segments
•Not fully understanding brand benefit ownership, transfer or importance

Over-Extending Brands

We asked Branding Strategy Insider readers “When is a brand over-extended?  What does it look like?  What are early warning signs?,” here is what some of them had to say:

•A brand is over-extended when its iterations are no longer valid to its customers.

•When is a brand over-extended? Brand over-extension occurs when a brand’s identity does not cause an emotional response –which develops into a desire to make a purchase –to the public. Additionally, brand over-extension is the result of a brand’s inability to evoke a clear vision of the product’s function in the public’s mind. When I see a well-made Coke commercial, I am reminded that I have not had a Coke -not just any ‘ole soda- in a while.

•What does it (brand over-extension) look like? Brand over-extension looks like an undervalued product.  A product that is everywhere but undervalued is over-extended. When the public dismisses the function of the product, the product becomes as unique as dirt.

•What are early warning signs? Editors misuse brands by allowing the use of the words Kleenex and Xerox to be used as nouns instead of adjectives. When Editors disregard your identity, they are teaching the masses to disregard your product.

•A brand is over-extended when its employees can’t immediately and succinctly say what it stands for when asked.

•A brand is over-extended when all you can say about it is “It is the quality innovative leader in the categories in which it operates.  It offers its customers assurance.”

•A brand will be over-extended when profit driven business units have the freedom to enter new categories with the brand name without the input and direction of a brand equity oversight mechanism.

•You know you are in trouble when the person heading up your brand licensing department doesn’t have a strategic bone in his or her body and is compensated primarily for the incremental profits that he or she generates.

According to Peter Farquhar, successful brand extensions have three characteristics:

1.Perceptual Fit: the consumer must perceive the new item to be consistent with the parent brand.
2.Benefit Transfer: a benefit offered by the parent brand must be desired by consumers of products in the new category.
3.Competitive Leverage: the new items must stack up favorably to established items in the new category.

Sometimes a brand extension is just another proof point for the brand promise, strengthening what the brand stands for. At other times, it makes the brand more relevant to new customer segments. Sometimes it can stretch the meaning of the brand beyond a particular product category, giving it a prolonged lifespan and greater flexibility for future growth.

The Blake Project Can Help You Determine If Licensing Is The Right Extension Strategy For Your Business

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