Monday, October 26, 2009

Brand or line extension?

If you own a valuable brand with both strength and stature it's of course a very tempting move to plan to utilise that brand more. Stretching the brand into new territory is a very tempting move and can be a smart move too if it's done in the right way. But it may also seriously damage your brand if it's done in the wrong way. There are two kind of stretch opportunities:
1. Line extension
When you innovate within the categories which the brand is already strongly associated too and where it has its current space in the consumer mind
2. Brand extension
When you try to extend the brand into new territory i.e. markets or categories where the brand lacks credentials and consumer associations.

Line extensions are the easy and most common option and it's a great and fairly easy option for less developed categories. But in more mature and well-developed categories line extensions won't be likely to generate the sales you're after. So, in those cases you need to carefully consider extending the brand into whole new territory. This carries both major risks and massive rewards - it's all down to how it is done. Consider how e.g. Levis fell from glory in the mid 90's by extending their brand too far... There are many other cases of poor and even catastrophic brand extensions and many cases of good ones too - I will certainly get back to this topic.

Lastly, since talking about brand extensions I spotted an interesting one in the UK. It's Innocent Drinks that have extended their so much loved smoothie and juices brand to healthy ready-meals. What do you think? Good or not good?

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