Unlocking the Power of Brand Extensions: A Strategic Guide
When faced with a new product or service that doesn’t quite fit your brand’s mold, you’re left with a crucial decision: start from scratch or create a brand extension. In this article, we’ll delve into the world of brand extensions, exploring what they are, when they’re useful, and how to successfully execute them.
What is a Brand Extension?
A brand extension is an independent brand that shares some attributes with your main brand, but has its own unique values, mission, products, and visual identity. Think of it as a spinoff – a separate entity that can stand on its own while still benefiting from the reputation and marketing reach of your preexisting brand.
When and Why Are Brand Extensions Useful?
Brand extensions are perfect for when you need to target a different market without diluting your main brand’s message. For instance, a sportswear brand that empowers young boys to get serious about sports might create a brand extension that caters to girls of all ages, promoting confidence and sportsmanship. This approach allows you to leverage your existing brand’s reputation while communicating distinct brand messages.
When Are Brand Extensions Not Useful?
If the brand extension’s product offering isn’t related to your main brand, it’s better to create a separate brand. Additionally, if your main brand has a bad reputation, it can negatively impact the brand extension. Having too many brand extensions can also dilute your brand, making it seem unfocused and lacking in expertise.
The Benefits of Brand Extensions in Product Management
Brand extensions can make product management easier by leveraging the resources of allied brands, reducing the risk of a poor launch, and increasing marketing reach. With a brand extension, you can track performance separately, making it easier to make data-driven decisions. At worst, you can distance yourself from the brand extension if it doesn’t perform well. At best, the brand extension becomes a huge success, benefiting both brands.
Real-World Examples of Successful and Unsuccessful Brand Extensions
Let’s take a look at some successful and unsuccessful brand extensions. Colgate’s foray into frozen food failed because the brand’s connotations didn’t complement the new product. Wix’s Editor X, on the other hand, successfully targeted designers with professional tools, but only after distancing itself from Wix’s preconceptions. Facebook’s acquisition of Instagram is a prime example of a successful brand extension, leveraging Facebook’s popularity while maintaining a separate identity.
Assessing the Viability of a Brand Extension
To determine if a brand extension is viable, consider the following categories:
- Product-based brand extension: moderately related products that appeal to some existing customers
- Identity-based brand extension: different values, missions, and visual identities that need to be expressed
- Asset-based brand extension: benefits from having its own app, website, newsletter, and/or social media accounts
- Popularity-based brand extension: creates initial buzz with a fresh identity, often temporary
Planning and Executing a Successful Brand Extension Strategy
To plan and execute a successful brand extension, ensure you have the right resources, including people power and assets like apps, websites, and social media pages. Establish a connection between your main brand and brand extension, and cross-promote to create a buzz around the new venture.
Closing Thoughts
Brand extensions can be incredibly powerful, kickstarting new ventures into high-growth and even surpassing the original brand. By understanding the benefits and challenges of brand extensions, you can make informed decisions about your product strategy and create a successful brand extension that drives growth and innovation.