Brand Extensions - Part 2
by KMF Kamal
A brand extension is when a brand steps into new territory. In extensions, the brand enters a completely new category of product or service in which it is not known. The best brand extensions are those which leverage off the loyal customers from an established presence and import them into a new category. When entering new categories, a brand has to ensure that its associations, or equity, are readily moved over into the marketplace. The categories can be completely new, but if the associations created by the brand in the new space are the same, the brand can be extended with minimized impact to equity.
The advantage of brand extensions is the leveraging of brand equity from a traditional domain by a new one. This means that the loyal customer base and good associations of the core brand can be transported over to the new one. The company does not have to create a completely new brand from scratch, with all the brand building or customer and revenue creation that entails. Brand extensions done smartly can be very successful. For example, fashion brands have been known to extend their names to boutique hotels and manufacturers of heavy construction machinery have gone into menswear and accessories.
If a brand has already associated itself strongly with one category of product or service, this can make a brand extension difficult. Promoting products or services in new categories with no obvious linkages to core brand promises, associations and attributes is dangerous. A known ice-cream manufacturer entering the machine oil trade does so at peril to its traditional brand image and customer base. The best brand extensions, whilst entering new product categories, still preserve existing brand associations across categories.
Brands that enter a new category in which there is no clear association with the brand values as they stand is uncertain and can be dangerous for the equity of the brand as a whole. If the brand attempts to enter a new category in which the association is unapparent or non-existent, it risks degrading its established presence and dilutes the power of differentiation it once had. Loyal consumers may no longer feel an affinity for the brand they once distinctively recognized. This comes with the realization that the individuality of the product and its brand promises are no longer unique.
If a brand with an established image enters categories that do not reflect that image, it will alienate its traditional and loyal customer base. However, conversely, a brand extension done will enable the brand to extend its loyal customer base, diversify its product and service line and, hence, improve returns. Therefore, when introducing new categories of products and services to your brand, the brand extension should be carefully thought out. The ultimate aim should be clear linkages to your core brand identity in order to leverage off existing brand equity and extend your profitable base of consumers.
