Seems to me that everyone is doing it, brand extensions, that is. Caterpillar footwear, Jeep clothing, Amazon tablets, State Insurance roadside assistance, Vogel’s cereal, Air New Zealand taxis.
So can your brand also be extended to products or services that aren’t its reason for being?
In my last blog I talked about focus on your target market. So this topic seems a natural followon, or extension if you like.
There are lots of good examples where consumers will buy an additional product from a brand they trust. Your brand’s credibility and also the perceived link between product extensions are all important. Summed up by this article on what are the limits of your brand’s relationship with its target consumer, and what will your consumer allow you to do.
The power of the brand can be impressive. Even for older brands e.g Pan Am, an airline brand of yesteryear, is today selling travel merchandise.
However, don’t underestimate the challenge with jumping into a brand extension. Firstly, has the rationale for the brand extension been thought through, and does it support the strategic direction. Second, you need a viable product or service that adds value to consumers you’re focused on. Then you need to ensure it doesn’t detract from your current brand equity either by its introduction or by you losing focus on your main activity.
There are a number of brands that haven’t been extended e.g Toyota. They arguably had consumer permission to sell up market cars but didn’t have the credibility so it developed the Lexus brand. What about Coca Cola? It sells a vast variety of drinks, but very few have the Coke brand name. So brand extensions are not always the answer, and indeed need to be very carefully considered and managed.
Final thoughts from the CE of Starbucks, Howard Schultz: “consumer-based business is changing so significantly that you just can’t embrace the status quo”. They are really trying to push the envelope according to Starbucks Coffee Marketing.
Go 2 Market principle: understand well your brand equity, customer perceptions of a brand extension, and how to deliver an extension that strengthens your brand.