Risk And Failures Attached To Brand Extensions

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Some like Virgin and Mitsubishi have tried. Those few that have succeeded with broad based extensions have a benefit thread running through their products that customers of the respective categories want. Virgin offered value in differentiated services like their airline. Their cola, jeans, vodka, etc. flopped. Contrast this with Healthy Choice or Atkins which offered a common thread in all of their products of low fat or low carb. It all comes back to understanding a brand’s extendible equity and staying focused by knowing “What business we are in.”

Much has been written as scare tactics about the negatives and risks of brand extension. In reality, if a brand extension is so off target or lacks fit and or leverage, it likely will fail and do little damage. Most of these misfires die in limited test market anyway. There can be real damage to the parent brand, however, when too many unrelated brand extensions are launched. Names like Betty Crocker, General Electric and Kraft have been extended profusely. While they have not lost their awareness as household words, the strong associations they once had to specific products and related qualities (e.g. cake mix, light bulbs and cheese) may be diluted. This is especially dangerous when a brand is used synonymously with a specific product. Brands that are not legally generic but are used that way such as Kleenex, Scotch (Tape), and Band-Aid should not be extended broadly or they risk losing this valuable quality.

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