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Brand_Extensions__Is_it_Time_to_Broaden_Your_Horizon_

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					Title:
Brand Extensions: Is it Time to Broaden Your Horizon?

Word Count:
661

Summary:
By definition, a brand extension (product or service) should offer a
different benefit and/or attract another market or market segment than
its parent brand. Brand extensions seek to capitalize on the positive
perceptions and associations of one brand, translating them to the new
brand.


Keywords:
graphic design, logo design


Article Body:
When I interviewed graphic designers for my agency, I'd always get a
little nervous when they claimed they could double as a great copywriter.
That's because good design and good copywriting require two different
skill sets rarely found in one person. I'd experience the same nervous
reaction when clients discussed "brand extension," or launching a new
product related to their existing brand. It's not as easy as it seems.

By definition, a brand extension (product or service) should offer a
different benefit and/or attract another market or market segment than
its parent brand. Brand extensions seek to capitalize on the positive
perceptions and associations of one brand, translating them to the new
brand. For example, if customers associate safety with a certain company,
they may infer that any product from that company is safe. Loyal
customers of a parent brand may be more willing to try brand extensions.
This, in turn, may decrease the cost of marketing the new product. The
extension may strengthen the parent brand as well.

Notice I keep using that pesky word "may." Here's why: many brand
extensions end up disasters, draining the marketing budget and diluting
their parent brand in the process. In their rush to grow, even large
corporations overlook the simple fact that brands should only be extended
when the new product or service addresses genuine consumer needs and is
based on accurate knowledge of the parent brand's core strengths in the
minds of its customers. Having more products doesn't always mean
achieving more profit - especially in the long term.

Let me give you a true example of a poorly thought-through brand
extension. Not long ago, a leading manufacturer of motorcycles introduced
cake-decorating kits. One nationwide survey "awarded" the product "worst
brand extension." After all, the baking world and the biker world don't
seemingly intersect. The product doesn't seem to fit with the brand's
core values.

What a Brand Extension Should Do:
A brand extension should:
      - strengthen the existing brand
      - address additional opportunities or find new uses
- bring new users to the brand only if existing costumers are not put off
by the extension

A brand should move into a new industry only if it can do so without
losing relevancy (i.e., cake-decorating example above). The new market
should be a natural fit with the original market, because most brands
become linked to a specific industry in 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 can be successful is by creating a new
category versus moving into an existing one, where it may get lost among
more established competitors. Before Starbuck's, who would dream of
paying so much for a cup of Joe? Starbuck's revolutionized an industry
with its introduction of a new category: the European-style coffeehouse.

Keeping your focus narrow doesn't mean you have to carry a limited
product line. For example, Starbuck's has stuck (for the most part) with
its original market, but offers lots of choices to that market, including
extensions like coffee liqueur. Companies who stay focused on a
particular market are perceived as specialists, and specialists are
usually thought to know more or be better.

Ask Yourself 5 Key Questions:
If you are considering a brand extension, ask yourself:
1.    What is the long-term vs. short-term impact of the extension to my
company and parent brand?
2.    Is my parent brand strongly associated with a certain product
category or can it step into new markets?
3.    What value does the extension add to 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, be sure to
tally up its true costs in terms of brand erosion as well. Maintaining
long-term brand health is usually more important than short-term dollars.

				
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posted:3/24/2011
language:English
pages:2