A brand extension can be a source of new offering ideas, bursts of energy, brand enhancements, brand building economies and new growth platform. The extension option is not always optimal, but it should be part of most strategy and new product discussions. One key step is to identify extension product categories where a new entry will benefit from and contribute to the brand associations.
The process usually involves identifying the associations and brainstorming where they might be relevant. A more systematic approach is to explore the 10 routes to brand extensions that come from an analysis of successful extensions.
A friend of mine, Ed Tauber, considered the father of brand extensions, did a classic and influential 1988 study of 275 successful extensions in which he concluded most companies employed one of seven approaches to extensions. The Parham Santana extension agency, in conjunction with Ed, has reprised that study by identifying 500 successful extensions and systematically identifying 10 routes to brand extensions. Each of the extensions fit into at least one of the routes. The study furthers our knowledge of strategic extensions and makes the search for potential extensions much more robust and efficient.
10 Examples of Successful Brand Extensions:
- Shift the form: Starbucks Frappuccino, Snickers Ice Cream Bars, Black & Decker Role Play Tool Toys, Clorox Bleach Pen, Dial Hand Wash.
- Transfer a component: Crayola soap paints (creative color), Entenmann’s “Fresh Baked” Candles, Dr. Scholl’s shoes, Ghirardelli Brownie Mix.
- Transfer a benefit: Arm & Hammer Car Litter Deodorizer, Mr. Clean Magic Eraser, Ziplock Food Containers, Weight Watchers Ice Cream Bars.
- Leverage an expertise: Food Network cookware, Honda lawnmowers, Gold’s Gym 7-in-1 Body Building system, Mayo Clinic Diet, Reebok Sports Club.
- Companion products: Coleman Sleeping bags, Coppertone Sunglasses, Harley Davidson Apparel, Mr. Coffee Premium Coffee, Steinway Furniture Polish, Weber Seasonings.
- Leverage the customer base: Trix Yogurt, Smith & Wesson Tactical Police Mountain Bikes, Sesame Street Toys, Barbie Scooter, Adidas Watches, Fisher-Price Diapers.
- Leverage a lifestyle: Biggest Loser Kitchen Scale, Coach Fragrance, Cover Girl Sunglasses, Discovery Kids Telescope, ESPN Restaurants, Esquire Furniture, Porsche Kitchen Appliances, Rolling Stone Restaurant.
- Leverage a celebrity expertise: Jack LaLanne’s Power Juicer, Jack Welch Management Institute, Jan Fonda Workout DVD, Martha Stewart Bedding, Ralph Lauren Paints, Wolfgang Puck Frozen Pizza.
- Leverage a celebrity lifestyle: Cindy Crawford Jewelry, Donald Trump Signature Collection Apparel, Eddie Bauer Baby Stroller, Jessica Simpson Luggage, Kelly Ripa Shoes, Lakers Bottled Water, George Foreman Grill.
- Change the game by changing a brand image: Old Spice High Endurance Deodorant, V8 V-Fusion Vegetable and Fruit Juice, Zagat Health Survey Doctor’s Ratings
Of course, getting ideas on the table, even good ones, is only a first step in an often complex decision – see my book Brand Portfolio Strategy. Two points illustrate this complexity.
First, the extension decision is best made in a larger strategy context looking out years and for a stream of extensions rather than as an ad hoc, one-off decision. The “next extension” may not be justified unless the value of adding or changing associations is taken into account.
Second, a key element is the ability of the extension to represent a distinctive solution to a real customer need. We know empirically that “me-too” products seldom succeed, no matter how they are branded. Truly distinctive products that have “must haves” that define new subcategories are the big winners. So even if the extension makes brand sense, there needs to be a compelling offering that is brought to the market.
These examples are proof that when done correctly, a brand extension can be extremely successful. While it can certainly be a complex process and difficult decision to make, the results enable brands to create and dominate new subcategories.