While executives rightly proceed with caution when considering brand extensions, the rewards of success are substantial. Although Apple’s is, rightfully, the darling of the hour (the iPod, iPad and iPhone are shining examples), Apple is certainly not unique. Other powerful brands that have created enormous equity by extending into unlikely categories include Amazon and Virgin. Customers give some brands a great deal of permission to extend into unlikely places, provided the extension can readily create a symbolic frame that goes beyond the product to what the brand represents holistically.
So how is it done? It’s not as simple as slapping your logo on a new product in a new category. There are several considerations to keep in mind.
1. Do you have the guts to take the leap and stick with it?
Like any new venture, remember that brand extensions are risky. “Know thyself” is a tremendous factor in deciding whether or not to extend the brand, so take time to honestly assess how much risk you’re willing to take on. If you stretch too far, customers may well reject the brand extension. Understand how you will manage failure as well as success.
2. How well loved is the brand?
The more customers like the brand, the more likely they are to be loyal. If they love the brand it isn’t that far from a state of near-religious devotion. Step one is for brand managers assess metrics such as awareness, familiarity and current market share – yes, I am advocating the use of numbers to evaluate human behavior. However, the metrics are only part of the equation. Metrics often do little to determine the viability of a brand extension because they focus on things that reflect anything but the emotional connections and cultural meanings brands take on.
It is in the face of culture and practice that the quantifiable looses meaning. Take Mini Cooper, for instance. Ten years ago, it was not the market leader. In fact, it was seen as a less than reliable car that cost little – but it was also a beloved reminder of all things quirky about British automobiles and the unpredictability of youth. Its “cool” factor created a cult-like customer following. Add to that the credibility provided by BMW engineering and you get a transformed brand that shifted from an image of being cheap to the status of a sports car.
3. Does the brand promise really deliver?
Brand promise serves as the foundation for everything that the brand does. It also has to be more than a slogan for the customer to believe in the brand. When extending to a new category, a brand promise has to be powerful, realistic and easily articulated.
In this instance the “why” is far more important to address than the “what.” Brands promises built around a list of attributes (the “what”) have a harder time extending their brand because they provide no direct connection to how the brand impacts a person’s life. Brands promises that focus on the people exploring the brand (the “why”) are able to gain traction because their meaning can be transferred from one condition to another. It’s not the attributes but how the brand positively shapes a range of conditions in daily life.
Returning to Apple, its success has grown because it focused on “why” it built computers. The position moved away from technical specs to how its devices fit into daily life – the computer, the iPod and the iPhone all talk to pleasure, looking cool, etc. Things like quality and RAM are simply givens. This promise Apple makes is both broad and powerful enough to be meaningful in other categories.
4. Does the brand fulfill a unique need?
For beloved brands, expectations are extremely high. It isn’t enough to follow a “me too” way of thinking. Getting it right is paramount because extensions not only can fail, but can damage overarching brand equity. Think about Blockbuster’s failed attempt at streaming video and mail-order DVD rentals. It was just another service that someone else was already executing beautifully.
Before a brand extension, think about whether it exceeds market expectations or if it’s just a “me too” plan. Think about what doesn’t exist or isn’t being addressed adequately – in other words, rethink the problem and spend a little time reflecting on what is really needed. Think about how you can provide meaning and value.