Brand extensions can fuel growth by generating additional sales to current customers or by attracting new customers.
For clarity, I consider a new flavor of Crest toothpaste to be a line extension while I consider Crest mouthwash a brand extension.
Given a long line of failed brand extensions, following are several questions to consider:
- Have you optimized your product/service mix? Adding a line extension is easier and less risky than adding a brand extension.
- Have you explored the full range of product/service options within your existing product line? Do these options meet all key consumers needs and wants?
- Could you increase sales simply by executing on your existing brand better? Growing your existing business is easier and less risky.
- Does your staff have the skill set necessary to deliver the new brand extension? It is very difficult for product development experts to become service experts, for bankers to become financial planners — it’s a different mindset.
- Do you have the marketing budget to adequately promote the new brand extension? Will marketing of the current product line suffer?
- What back-of-the-house systems (supply chain, accounting, maintenance, staff) are required? Again very different expertise may be needed if this is an entirely new category of business.
- Is the new brand extension being offered consistent with your current brand identity? Is this a logical extension in the minds of your customers?
- Is the relevance of the brand extension clear? Is there a cross-sell opportunity?
- Do the personality and character of the brand still apply across all elements of the brand? Without integration, the brand extension will be confusing and may weaken existing brand equity.
- Does your new offering engage customers in new dimensions of your brand story? How does your brand story change to accommodate the new offering?
- Are you trying to reach new customers who are not currently buying your brand or do you want the brand extension to appeal to existing customers? Simply, who’s your target audience?
- How will you sustain brand strength in the core business? Will you still invest in innovation, marketing support and solid execution?
What are examples of successful brand extensions you’ve witnessed?
How about unsuccessful?