The darling and the damned Brand Extensions

To explain what’s considered to be a successful brand extension and what is heading for certain disaster looks like, I’m going to show you what I believe to be the best and worst examples of brand extension.

Launching a new product to your already large and loyal customer base sounds like a recipe for success, right? Well, sort of.

Brand and line extensions can be the easiest and most beneficial way for a brand to enter a new market. It means the new offering is born backed by a name that’s recognised and trusted, allowing it to capitalise on the establishment of its parent brand.

However, there are important things to consider which can be the difference between whether your new product sinks or swims. For example, consumers aren’t likely to buy their healthy salad from a luxury chocolate brand.Yet, they’d be more than happy to buy cake from a company that specialises in coffee. There’s a method to this madness, and it’s a case of working out what products and services will sit logically together under a brand umbrella.

To explain what’s considered to be a successful brand extension and what heading for certain disaster looks like, I’m going to show you what I believe to be the best and worst examples of brand extension.

Virgin – The global leader in brand extension

Richard Branson is the face, the voice and the spirit of Virgin. Feeling like a “virgin” in the business world, Branson started out at the bottom and found his footing on every rung of the ladder until he made it to the top. Today he is one of the most admired business persons of the past five decades.

Virgin is a multinational branded venture capital conglomerate, also known as a branded house (this means that all sub brands are named after the parent brand, such as Virgin Media, Virgin Active and Virgin Mobile.) Virgin has successfully conquered many markets: travel, leisure, broadband, TV, radio, mobile, music, finance, health and business. So what’s the secret?

“The brand is not what you think it is, it is what the consumer thinks it is.”

Branson looks at his brand from a consumer’s point of view, not his. And I believe that this is one of the reasons why Virgin continually attracts consumers across a variety of markets.

Over the years, consumers have built a relationship with Branson as well as his brand. By recognising him as the face of the brand, a real person, talking to us like real people, we connect more strongly than we would do a logo.

Virgin is only human!

They don’t always get it right, though. Some might say that Richard Branson got a little too big for his boots when he decided to create a drink to rival global brand Coca Cola.

Still, he’s happy to acknowledge any mistakes. In a recent blog post he wrote that he now realises he shouldn’t have underestimated the power of the world’s leading soft drink makers, unfortunately making the mistake that all large, dominant companies are sleepy. Thankfully for Richard, if a product is taken out of the market quick enough, consumers often forget the flop and focus on what’s hot.

 

Harley Davidson – Macho men bake off!?

Harley Davidson is the number one seller of new on-road motorcycles. Hear the word motorbike, and the name Harley Davidson automatically springs to mind. So why exactly did they decide that their next move would be to extend into the cake decorating business? A question I pondered over a slice of Battenberg.

Harley Davidson’s target market is men aged 35 and over – not quite the demographic I’d have in mind as buyers of cake decorating kits… According to a recent survey by branding experts, they found that the kit was too “Disneyfied” for the market and went on to be named the “worst brand extension”. On a whole, not a great start for the launch of their new product. I am however impressed that the marketers of this product actually managed to pitch this as a good brand extension.

Personally, I feel that there was a huge misunderstanding of the brand’s core values and customer base. And if consumers feel misunderstood, there’s a chance that the Harley Davidson’s reputation could take a hit.

Brand extensions aren’t easy to get right. But there is one all-important thing to keep in mind: Customers want to feel a special connection with their favourite brands. I want a brand to know everything about their market (me) and truly care about the products they sell to me. Which is why, in my opinion, brand extensions tend to work better with similar services that can slot seamlessly in with the parent brand.

In summary, the consumer shouldn’t think: “Why do you sell this?” but rather: “Why haven’t you always sold this?”