So, you've got a great brand and a dynamite product or service that you offer to the universe.
What's next for you? A brand extension, of course.
Ah, if only it were that easy.
Brand extensions into new categories fail about 83-84% of the time, research shows. So, considering the dollars and other resources it takes to simply launch even the most seemingly "can't lose" extensions, you really must lock down your brand extension marketing strategy.
Many industries undergoing rapid transformation (like healthcare, in which I work) are considering brand extensions. Having an airtight business case before making a move goes without saying.
The strategy team must consider a variety of factors for launching the brand extension, including market readiness, potential cannibalism or dilution of existing products, and the level of customer engagement with the parent brand. Those are essential issues that demand extensive data analysis.
A "gut check" is imperative as well. Even if the data checks out, does it make sense in the consumer's mind or will it be ignored, or worse, panned? Virgin Hotels makes absolute sense, but Virgin water purifiers? The connections aren't clear. Similarly, the jury's still out on Paula Deen's furniture line priced higher than a million butter sticks stacked together.
Also consider the case for bringing added value to an existing, loyal market.
Many times, a brand extension is launched for a completely new audience (younger or behaviorally different). Instead, consider branching into a new product or service that adds value for your current customer base.
For example, if Virgin Hotels customers had a Virgin car rental, they would most likely make travelers even happier, especially if Virgin, which is typically very good with customer service, minimizes those awful long waits for airport car pick-up. Keeping the same target audience and cross-selling new products to them will also reduce your marketing costs.
When the strategy checks out, it's up to marketing to build a campaign for your brand extension. Here are a few pointers for getting started.
A successful brand connects with its key audiences. Take the time to understand those connections or "brand values" that already make you a trusted entity.
For example, if your clothing line is known for its environmentally sound organic materials, your new line of food products needs to exemplify the same values. If your pet foods are known for keeping dogs and cats healthy and active, your new line of doggie daycare facilities should stress the same core concepts.
Straying from your core values with your extension will damage both the new and the parent brand, so make this values check a critical exercise.
Consider, too, your brand story. Does the brand extension make for a convincing next chapter?
Don't damage your current brand
Even if you've already determined that the extension isn't going to substantially harm your parent product's sales, you're not out of the woods. A brand extension, poorly executed, can still damage your parent brand.
Check for big issues such as delivery on promise, customer service, product quality, etc. And also consider subtler factors such as brand voice and tone. If your parent brand is a financial institution known for conservative investing, don't go completely irreverent on your extension, even if it is intended for a younger audience. First, it's not believable. And, second, it's confusing.
Retaining a certain thread to your core brand will keep your new extension afloat.
Pay attention to brand architecture
If you decide to use the parent brand name as part of your extension, consider the ramifications of making the parent name a super-brand (Pet Delights' Cat Shoes!) or, on the other hand, a brand endorsement (Cat Shoes by Pet Delights).
Giving your parent brand super-brand status certainly acknowledges that you think it's pretty important. Let's hope your customers do as well. Going the brand endorsement route does minimize your parent brand, but it buys you wiggle room should the extension flop.
Also, think before you assign a cute term to your brand endorsement, such as "powered by" or "from the makers of." If you are a turbine company, "powered by" is great and if your production line truly includes workshop elves, "from the makers of" certainly jives. Otherwise, it may not be fitting.
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Above all, listen to your customers. If they've been clamoring for the new product or service that can be answered with a brand extension, find out what excites them and weave it into your messaging. If the extension was born from your company's executives thinking it "might be a good idea" while sitting around a conference table, you've got challenges ahead.
Test and re-test your campaign for audience interest and message authenticity.
Also, ensure that everyone understands that a brand extension is basically a new brand. That means its marketing needs adequate funding.
Help your extension grow as much as your parent brand, and you could have one of the most happily successful brand extension launches.
You may like these other MarketingProfs articles related to Brand Management:
- Developing an Indispensable B2B Brand-Inspired Growth Strategy: Mitch Duckler on Marketing Smarts [Podcast]
- The 10 Most Valuable Global Brands in 2022
- Different Is Better Than Better, Part 2: Sally Hogshead on Marketing Smarts [Podcast]
- Different Is Better Than Better, Part 1: Sally Hogshead on Marketing Smarts [Podcast]
- The Top 20 Purpose-Driven Brands
- How to Use Brand-Mapping to Position Your Business