Brand extensions: heros or villains?

After a recent post on brand stretch saying that new brand should be a last resort, I had a good challenge from Scott Miller of Gamematters. His point was that a clear brand positioning was essential for success, and that extending muddied the water and led to brand dilution.

Whist I agree 100% on the need for a clear positioning, I do believe extensions can work to strengthen this positioning if done well, and this is one hell of a big “if”. It requires :
i) dramatising the brand idea to create a product or service that ii) delivering real added value for the consumer versus what’s on the market. The over-crowded “extension graveyard” shows how many have failed to add value.

Below are a few examples of “hero extensions” to illustrate this (from the Brand Stretch book). All of these are true stretch into new markets, not just range extensions (new flavours and formats):

1. DOVE:
started as a bar with c.$250 million in sales. Now stretched successfully into shower, bath, deo. All tied together with the same POSITIONING about real beauty, not fake, and the PRODUCT TRUTH of 1/4 moisturising cream. And the original bar product is stronger then ever, with share up in the USA by 4pts over the last few years.

2. BERTOLLI: Olive oil and past sauce brand in the USA has stretched the brand into frozen meals, and created a new $100 million business. Leveraging the idea of being an authentic Italian food brand,  and using Bertolli olive oil as a product truth, but not being tied down by  to one product.

3. APPLE and the iPod: From PCs to home entertainment hub. And of course this an Apple extension, not a new brand as some people claim. It’s sold in the Apple store, the “i-” type descriptor links to the i-family (iTunes, iWorks, book etc), it has the visual apple logo, it says “Designed by Apple in California etc. Has driven a 10 times increase in market value and helped re-ignite interest in Apple PCs.

4. PAMPERS Kandoo wipes: leverage Pampers baby care credentials, and positioning about “helping your baby grow, every step of the way” into moist training wipes for kids. Importantly, leveraged P&G know-how in paper technology.

Which extensions get your votes as heros, or villains?

5 minute workout:
review the brand extension projects you’re working on, and evaluate them on 2 critera. First, how effective are they dramatising the desired brand positioning? Second, how effective are they likely to be at creating profitable growth? If the answer on both questions is not “high”, then consider re-working or even killing the projects.

Visit thebrandgym to gain a deeper understanding of brand stretching.