Document Sample
Products Powered By Docstoc
					Products’ best start in life comes from a good parental name - but only if customers are
convinced of the link, and if brandfatherly loyalty is neither too weak nor too strong.

Four out of five product introductions now ‘extend’ an existing brand,
milking past investment in existing images rather than building up a new
one from the ground.

Why extend a brand?

New wine flows better in old-brand bottles because:

trial buyers know what they’re getting: an unknown product is easier to
trust when there’s a familiar name behind it; e.g. plumbers’ unreliability
attracts clients to service backed by British Gas
non-buyers take another look: people who felt excluded by ‘parent’ brand
seize on extensions they see as reaching out to them; e.g. CosmoGirl grabs
teens who feel too young for cosmopolitan
original brand is enhanced: extension can alert people to the original brand,
or induce them to try it again; giving non-traditional clients separate
treatment, makes core customers feel more cared for, e.g. Tesco ‘Extra’
customers know they’ll get items convenience shoppers won’t find in their
brand ‘values’ get new application: people who’ve learnt to ‘live and
breathe’ the current brand in production, marketing, distribution can carry
on doing so, instead of having to switch to new image; e.g. bright colours,
experimental spirit of original Lego bricks spread to its theme parks, robot

How to extend

Successful brand extension requires:

a trusted original brand: name, image or logo that transcends whatever
offering it started with, giving buyers instant trust in new item it’s assigned
new product with untapped buyers: an underserved market where sales can
be captured from rivals or grown from ground up vs cannibalised from
existing brand
perceived linkage of old and new products: a new product that customers
see as building on the design, engineering, marketing skills honed on the
old, to be assured it carries over the quality as well as just the name

Extending from the middle

Research shows extension is most effective for ‘goodenough’ brands - not
the best or the worst:

weak-loyalty brands: can’t stretch because if people mistrust the core
product, they won’t think much of any others that carry the name
strong-loyalty brands: can’t stretch because users don’t want them ‘diluted’,
or don’t believe they can achieve such quality in any other area; extension
risks are highest because one misguided spin-off can puncture the magic
around a trusted name:
- diluted image: longtime clients feeling neglected and forced into bad
company; eg McDonald’s famed speed and constancy of service hit by
pursuit of higher quality and fare beyond the basic burger

- diverted resources: clients suspect that people and investment assigned to
spin-off products could have been used to de-bug and improve core service
- so may assume neglect of quality even if none visible; e.g. Ford’s drive into
after-sales service eroded customer faith in its will to build cars that
wouldn’t need this
middle-loyalty brand: is generally most flexible:

- for buyers: when appeal based on fuzzy ‘style’ rather than focused
‘content’, it’s easier to see new uses fitting existing consumption image

- for employees: when they feel more loyalty to brand as satisfaction source
or delivery system than as any specific product, they’re happier breathing
the name into new market space

Getting stretchier

Long-range extensions have been discouraged, by evidence that buyers
view brand strengths as transferable only to innovations with:

process similarities: so new product can draw on skills and technologies
developed around old; or

customer similarities: so those delivering and marketing the new product
will understand its buyers, and can anticipate their demands

But some brands seem extendable anywhere - the Panasonic bicycle, Jeep
clothing, Benetton hi-fi show buyers accepting longer stretch, because:

image counts: shorter time, sharper advertising and greater buying power
of (or craving after) youth means more acceptance of a lifestyle link
between products, even if no obvious technical connection
'excellence’ goes anywhere: a brand that exudes general competence can
take enthusiasts into very different markets - e.g. Pennzoil, finding buyers
associated it with ‘autos’ and ‘protection’, launched tyre cleaner and other
car-linked chemicals
outsourcing is understood: buyers trust that a store issuing credit cards, or
carmaker selling jeans, will hire competent specialists for actual design and
production - brand is badge of assurance that they will (and can afford to)
buy the best, on client’s behalf
quality can be cross-checked: while first buyers of a brand extension have
only the parent brand’s assurance to go on, later purchasers can ask
friends, read consumer reports, check resale prices; studies claiming limited
brand extendability may not have tracked the take-up patterns for long

The next instalment

Brand extension is encouraged by two earlier trends:
return to core business: renewed ‘focus’ rescued firms from unrelated
activities where they couldn’t add value - but left them with brands whose
strengths can be leveraged more widely to spread their overhead costs
power branding: after culling lesser brands to invest more in really big ones,
extension can raise return on that investment - and avoid expanding ‘core’
brands beyond their premium market

Launching a new brand for every new product was confusing for buyers, as
well as costly for their suppliers; the more you’ve spent on establishing a
good name, the stronger the reason to extend it onto everything that fits.

This article first appeared in Bulletpoint, and is sourced from, copyright Bulletpoint, all rights reserved.

Shared By: