Sometimes called brand stretching, a brand extension is when a company launches a new product under an existing brand. The strategy behind using a brand extension is to extend the already established brand’s equity to help the new product to succeed. It is important to note that not all additions of a brand product is a brand extension. A new beer on tap at your favorite local brewery would not be a brand extension, rather an additional brand product. However, if a brewery branded an at-home brew kit, it would be a brand extension. When considering an extension, ask yourself: how flexible is the brand and could the new extension hurt your existing brand?
Sometimes called brand stretching, a brand extension is when a company launches a new product under an existing brand. The strategy behind using a brand extension is to extend the already established brand’s equity to help the new product to succeed. It is important to note that not all additions of a brand product is a brand extension. A new beer on tap at your favorite local brewery would not be a brand extension, rather an additional brand product. However, if a brewery branded an at-home brew kit, it would be a brand extension. When considering an extension, ask yourself: how flexible is the brand and could the new extension hurt your existing brand?
If executed well, brand extensions can be beneficial. When you enter a new product category that your brand currently is not in, you can increase your brand awareness. More eyes on your brand can impact your brand image. If your product or extension is truly rooted in the core of what your brand stands for, it will feel consistent and help strengthen your brand image. Apple is a wonderful example of how brand extensions can be very lucrative. Apple used to just be a company that created computers. When someone says they’re a “Mac person” it’s because of the brand loyalty and the trust they have built through the Apple brand. Why else would some keep the packaging their phone came in for years? Apple has leveraged this by expanding their product line to encompass everything from music streaming (Apple Music, formally iTunes), health management (AppleWatch and the Health app), television (AppleTV) and now finance (Apple Pay and the Apple Card). Apple is able to more easily launch new products in different markets because they have strong customer loyalty to their main brand. If the products are good, which a Mac person assumes they are, then the risk is low and it’s easier to continue to spend money on their products.
When your brand extension or new product idea does not align with the quality and benefits that your primary brand stands for, your extension can hurt your overall reputation. This can be seen when a brand extension just doesn’t feel right to your consumer, like the wildly talked about Colgate Beef Lasagna of the 1980s featured at the Museum of Failure. An audience’s negative gut feeling about a brand extension can damage an existing brand. Like, for Colgate, lasagna under the Colgate name might make you think of brushing your teeth with a cheesy beef lasagna! It takes away the clean, fresh feelings you already have about Colgate. There are four main ways that brand extensions can potentially hurt your primary brand.
In February 2021, concern rose over some baby food brands possibly containing dangerous levels of toxic metals, including Gerber and Plum Organics. Because Plum Organics is owned by Campbell’s, and one is a brand extension of the other, Campbell’s may not suffer the same effects as Gerber, who has all its products under the main brand.
Choice overload is when a customer is overwhelmed with the number of choices available. Think about when you’re in the grocery store chip aisle and you notice Lay’s chips take up most of the variety. You want something crunchy, but instead of reaching for Lays Kettle Cooked you choose Tim’s chips because they have a more defined variety and the meaning of their brand is not confusing.
When your brand enters a new market, especially geographic, you are going to have to communicate with a different set of people than you’re used to. McDonald’s in the United States is a quick place to grab some fries and a Big Mac. In France, it is more like a sit down restaurant with table service, French cheeses and fireplaces. McDonald’s has adapted to its French. But if you were to walk into a French McDonald’s you would feel a lot of contradiction to the experience you were expecting from your typical McDonald’s in the USA.
BIC makes everything from lighters to disposable razors to their classic pen. Their brand is complex. Meanwhile, 3M has many different products that are owned by the parent brand, but their products remain separate in different brands, like Post-it Notes.
If you have an idea but you don’t know if it would be a viable extension of an existing brand, ask yourself some questions.
At the end of the day just because you have an idea, it doesn’t mean that it will be good for your brand. Sit down and really think on the potential disadvantages of a brand extension and how it applies to your idea. Will your idea add confusion, contradiction or make your brand too complex?
Do a gut check. Take a moment and remove yourself from the situation. Look at your potential extension from an outsider’s perspective. To strengthen your decision, do qualitative analysis. Organize a focus group and ask general questions on how they perceive your brand. Then bring up some potential extensions. If your focus group is reacting like your extension is a Colgate Lasagna, go back to the drawing board.
Ask yourself whether or not your extension is actually a logical step from your existing brand. It may feel right but it doesn’t truly fit who your brand is. Go back to your brand strategy. Everything surrounding your brand should feel consistent and true. In your strategy, reference your x-factor, positioning statement, brand pillars and voice/tone.
Your customer should benefit from your brand extension. In the case of Ford, each of their extensions (Ford Explorer, Mustang, Bronco, Ranger, Focus, etc.) have specific benefits for consumers. The new Bronco gives consumers the benefits of nostalgia, while doubling as a rugged all terrain outdoor vehicle. Ford’s mission statement is: “to make people’s lives better by making mobility accessible and affordable.” Their extensions reinforce their overall brand and add value for their customers.
Finally, after answering the above questions, ask yourself if your extension feels consistent to your overall brand. If the answer is “no,” consider creating a separate brand for your extension. To assist in this process, visit our previous blog, Brand Architecture and Why it Matters.
Just because you can make something as a business does not mean that it should be a part of your brand. If you stay true to your brand by being consistent to your brand strategy, you will be able to be an iPhone instead of a Colgate Beef Lasagna.
Brand strategy is the foundation to successful business. Without strong branding, things won’t feel consistent and your customer will feel that disconnect.
Like our work, the Hardy Brands team is an embodiment of the perfect balance of strategy and creative. We’ve cultivated a team of certified brand specialists and strategists, designers, copywriters and marketing professionals who are ferocious about helping you succeed. We’re a Montana marketing agency that will constantly strive to improve your business.
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