Once a brand has been established, one option for growth is to stretch itself into different categories. This usually takes the form of extensions--new, spinoff products that seem like natural outgrowths of what’s come before. That’s a tricky business, but to simplify matters, companies could benefit by asking themselves this: "What’s the business of my brand?"
By business, I mean the strategic dimension of your brand that consumers recognize and consider an advantage over other brands. It’s what we call a brand’s extendable equity, and it’s the foundation for finding brand extension success.
But, first we need to take a step back. Many brand extensions fail simply because the philosophy of brand extension is not well understood or implemented correctly. Think Colgate Kitchen Entrees, the thought of a toothpaste brand extending into frozen meals should have been brushed aside from the start!
In essence, a winning brand extension:
So, you can’t just introduce a new variety of the same product; that would be a line extension. It has to be an original product that creates new competition and attracts new consumers. A new flavor of Special K Cereal is a line extension; Special K Crackers is a brand extension.
Successful brand extensions hinge on consumers already knowing your brand’s name. Your neighborhood coffee shop has no equity to extend into K-Cups; Starbucks, however, does.
Something that is concrete or easily communicated can be extended to the new category and there must be a strong reason why a consumer will prefer it over their current brand. Bic’s extendable equity is disposability. They had leverage when it came to disposable razors. Bic perfume, not so much.
In a study conducted by my company Parham Santana, and Dr. Edward M. Tauber, we examined more than 500 brand extensions to discover 10 sure ways a brand can successfully extend. Here, we illustrate five using familiar brands with clearly defined extendable equities.
Under this category, brands offer products that are frequently used alongside with the parent brand. For instance, is Duracell in the battery business, or in the business of long-lasting power? By defining its extendable equity as durability, Duracell has brought to market a line of Duracell PowerMats, a portable cordless charging system that uses "inductive energy transfer" to charge all your mobile devices.
Take a component, flavor, ingredient, scent, etc., that is closely associated with the brand and create a different product where this element makes sense.
Is Old Bay in the seasoning and spice business, or the business of bold fun flavors? By defining its extendable equity as its flavor, Old Bay has created a whole new category of business with a line of frozen crab cakes packed with the distinctive Old Bay seasoning.
Is Mike Rowe, the star of “Dirty Jobs,” a celebrity automobile pitchman, or an expert on all things really dirty? As the “guy who devotes his time to finding, and doing the dirtiest of jobs in America,” Mike Rowe has defined his extendable equity as, well, dirty, introducing a line of cleaning products branded--what else?--Dirty Jobs, powered with six "high-concentrate oxygen-powered enzymes."
You can also change the form of an existing product by modifying its method of delivery, preservation, store placement, or ingredient profile.Take Barilla, which, by defining its extendable equity as “the taste of Italy,” has launched a line of microwavable meals. Barilla is still the brand we love and trust; it just now has a quick-serve solution.
To reverse the fortunes of a brand that has accumulated negative perceptions, incorporate modifier words that repurpose those unfavorables or enhance the applicability of the product to a new category. Clorox may essentially be known for germ-killing but foul-smelling bleach, but recently it announced a line of scented cleaning products called Clorox Fraganzia, which modifies the perception of Clorox and bleach to be both tough and fragrant for a new brand extension and customer base.
Your brand, too, represents many dimensions, and each one represents a unique strategic possibility. These dimensions might include service, expertise, benefits, or ingredients. Your extendable equity might relate to any one of those dimensions. But have you defined your extendable equity and the business of your brand?
The brands above have. They are proceeding from a clear and narrowly defined extendable equity. Durability. Bold Flavor. Really Dirty. Taste of Italy. Bleach. Once defined, they’ve utilized classic brand-extension techniques to find logical new categories of business where they enjoy a competitive advantage. All these brands surround the new proposition with their proprietary credentials, technology, and ingredients to further “bullet proof” the new offering. That’s why they’re exciting and why, I think, they stand a good chance of succeeding. What do you think?