Sooner or later, just about any successful brand will face the question of brand extension. Can it be done without hurting the mother brand? Is it a legitimate way to grow the company? It’s a tricky process; to illustrate it, here are three examples of brand extensions. Some are real. See if you can spot which one(s).
Google Politics—Google has been extending its brand all over the Web, and has now ventured into the political arena. After analyzing countless terabytes of search data involving political candidates, Google has determined through (yet another) secret algorithm that they can reliably predict the outcome of elections up to 30 days in advance. This data, of course, is extremely valuable to campaign managers at all levels, and could replace or alter conventional polling. Pricing is based on the size of the electorate involved.
Colgate Dinner Entrees—the toothpaste mega brand has introduced a line of frozen dinner entrees under the Colgate brand to take advantage of their relationship with millions of moms who already buy their oral hygiene products. There are a variety of entrees, including spaghetti and a vegetable stir-fry with rice. It is priced to compete with Stouffer’s, and cross-couponing between product lines is expected.
Virgin Brides—having failed with the Virgin water purifier, Richard Branson’s team has introduced Virgin Brides, a chain of bridal shops located in the UK. Sir Richard arrived at the first grand opening wearing a wedding dress. (The man is a PR uber-machine.) In a highly competitive industry with an ever-changing clientele, the Virgin brand just might be the best-known one of all.
If you’re sharp, or if you cheated by checking, um, Google, you will have spotted the real ones and the fakes. But, in case you’re just reading this without a smart phone nearby, here’s the tally: Colgate Dinner Entrees (real), Google Politics (not real, at least not yet), Virgin Brides (real).
Needless to say, Colgate Dinner Entrées failed. In fact, they did so miserably. Sales of the product never took off and sales of their toothpaste actually dropped for a short time. Their customers reported the same feeling—yuck. Toothpaste and food? Together? No, thanks.
Virgin Brides also never showed a profit over 11 years of business and its two stores closed in 2007. When asked why Virgin Brides had failed, Sir Richard reportedly quipped, “We soon realized there weren’t any.”
When Sam Adams introduces a new beer, it has always been under the Sam Adams umbrella brand. For just another flavor or type of beer this makes sense. These are not really even brand extensions, unless you count their American Strong Ale, which is 50 proof and more of a publicity stunt than a real product.
But, when Apple introduces a smart phone, a TV-viewing service, or, as is rumored, a car, those are true brand extensions that lead to new markets and revenue streams.
To be fair, Virgin has successfully extended its brand from a record shop brand to a cola brand to an airline brand. Having a cultural icon leader like Richard Branson, though, is no small reason for the elasticity of his core brand. He embodies it and keeps himself (and his brands) in the news with his adventurous exploits, such as flying around the world in a balloon.
To understand what gives a brand elasticity or the versatility to shift into a significantly different market, marketers need to truly discover what drives their brands’ original success. Richard Branson and the Virgin brand have had some successful extensions and some not, but the core of their brand is about a self-image that their customers have of themselves as free and anti-status-quo. This translates to other categories fairly easily, as does Apple’s brand built around innovation and self-discovery.
But Colgate likely missed the signs that, while moms saw their brand as a healthful product, it was not one that defined them as a mom or as a kind of lifestyle. Dr. Pepper barbecue marinade (yes, real) has made the same mistake. So, be careful how far you reach to extend your brand into new markets. Make sure the real reason your brand works will have enough flexibility to reach the far-flung reaches of your marketing imagination.
As published in the Central Penn Business Journal and Lehigh Valley Business.