September 07, 2011

The Good, The Bad & The Bizarre of Brand Extensions

Once upon a time Coca-Cola had only soft drinks, Burger King only had burgers, and Nokia had rubber boots…

Yes, you read that correctly. The same Nokia that has been a telecommunications company and long time mobile phone manufacturer started out as an industrial conglomerate that produced galoshes and other rubber products.

Other than having strong and highly recognizable names these companies along with many others have tried their hand at extending their brand beyond their individual flagship products. Brand extensions are a complex venture and run the chance of being either highly successful or horribly awful.

Unlike product extensions which are the use of a brand’s name for a new item in the same product category, a brand extension is a strategy deployed when a company uses their brand name and attaches it to a new product in a different product category from the original established product. Much like Starbucks did when they introduced their liquor line in addition to their signature coffee.

Attaching a brand name to a new product category allows marketers to capitalize on the brand equity of the original brand and attach it to something new in hopes that consumers will associate the same experience and knowledge they have of the brand to the new product. But attaching a brand name to a new product is not always easy, it can be costly for both the brand extension and original brand because a poor choice for brand extensions may dilute and deteriorate the core brand and damage its brand equity.

When a brand extension is successful it can prove to be a lucrative move for brands, and in some instances like Nokia the brand extension becomes more successful than the original venture. But sometimes brand extensions are just flat out weird. So, which are which? Take a look at the graph below and see some brand extensions I’ve laid out as the good, the bad, and the bizarre.

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