Brand extension shows up as a problem to be solved once a brand reaches a certain size. The famous marketing guru Al Ries says: “The more you extend a brand, the weaker it becomes.” It is hard to disagree — say “that’s not true” and they will stone you. Our brand is our most valuable asset; let us not lose what we already hold in our hand while chasing more money, because a bird in the hand is worth two in the bush. On the other hand, the breed of contented, easily satisfied people who say “thank goodness sales are fine, let us not bother trying to sell more” died out along with the dinosaurs (if they ever existed at all).
Brand extension will inevitably become necessary, and there are a few ways to do it:
1. Expanding the Market: In popular terms, growing the pie. This is the effort to make room for yourself by growing the existing market, and it means doing what the existing brands do not. Getting consumers to consume more — an approach that does not sound especially appealing — is one of them. Consider air travel: a market emerged in which passenger numbers doubled within five years. The “flying mood” created as low-cost carriers like Ryanair and easyJet expanded aggressively helped even the legacy flag carriers more than double their own passenger numbers.
2. Taking a Bigger Share: In areas where we cannot grow consumption, we work to grab a bigger slice of the existing pie. By the nature of the work, communication campaigns may make it impossible to increase consumption, and since we will take this share from rivals, tooth-and-nail competition awaits.
Example: if you are a company in the cement sector, your ability to increase overall cement consumption is almost nil (unless you can persuade the government to build roads out of concrete instead of asphalt — that is another matter). Because the product is heavy in weight but light in value, carrying it to new markets is not very profitable either. In that case, your only chance is to take more share from rivals.
3. Finding New Markets: If we have reached a certain saturation in the existing market but still have production capacity, the approach is to try to sell the product in other geographies (for example, the other hemisphere).
4. New Customer Groups: This is an approach that grows a currently limited target audience through the image you create. If some customer groups do not choose the product because of its features or its past image, sales can be increased by positioning the product directly to them, or through sub-brands and “line” solutions.
Example: Old Spice, through the image it created, turned a product once seen as belonging to older men into one embraced by young men — and with that success became one of the first brands that come to mind in its category.
5. New Brands: In cases where we cannot twist and turn the existing brand any further, we can try to protect our market share by creating a new brand. The mistake brands usually make here is failing to cut the connection between the existing brand and the newly created one at a healthy point. When that happens, the parent brand can suffer great harm.
Example: returning to the example from the start of the article, British Airways answered the low-cost carriers with a separate brand, Go. Since BA could not pull its prices down to budget levels, it went the route of creating a new brand. But Go had to be separated from British Airways so clearly that a business traveler flying Go would not think they were on BA and start complaining about the pared-down service.
In the end, however much we talk about how to extend our brand, one of a brand’s most important principles is that the areas it extends into must not harm the brand. When deciding on brand extension, you have to think within this framework.
