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Brand extension: Good or bad?

Tending and extending brands

Anand Halve 

As they say the most successful brand extensions come from companies that really know their customers, even more so that know the limitations of their brand. Our experts discuss extensions that have been successful and those that have the potential to dilute a brand, and what makes some brands more extendible than others.

The simple answer for marketers seeking ways of entering new categories, tapping new customer segments and exploring new benefit areas has been: “Extend the brand”. After all, the logic of brand extensions is compelling, at least on paper. Brand extensions build on existing equity, they are less expensive to launch than entirely new brands, and they are a low risk option in these competitive times.

But is it really so simple?

Consider some of the brands that according to Brandz, were the world’s most valuable brands in 2011: Apple, IBM, McDonald’s, Vodafone, If brand extensions was the magic solution, you’d have seen dozens of extensions of these brands across landscapes far and wide. potato chips, McDonald’s T-shirts, TV sets, refrigerators...

The reason why this does not work is that from a consumer viewpoint, there has to be a recognisable and intuitively meaningful connection across the offerings. And the “manager’s link” is often just too-logical-by-half.

Let’s look at some of the extensions that bombed because of ‘spurious linkages’. Pond’s Dreamflower Talc was all about freshness, and toothpaste is about fresh breath early in the morning... but Pond’s toothpaste went down the drain. Nirma toothpaste followed another but equally logical sounding link: it cleans clothes, why shouldn’t it clean teeth? It didn’t wash with consumers. Saffola followed a supposedly increasing health consciousness into a baked snack called ‘Saffola Zest’. But it missed a simple truth: no one ever ate a snack for her health. The product has disappeared. Mothers have happily been giving Bournvita to their kids in milk, but that did not help to win them over to Bournvita biscuits. And the list can go on.

The point is that, what appears logical from one direction is not compelling from another. If you make ‘health’ the axis of commonality’ Saffola Zest snack can go down the gullet as smoothly as Saffola cooking oil. But is the axes are ‘snacks’ and ‘cooking oil’ the twain miss the mark!

There is another, perhaps even more important link required to make brand extensions a success. And that is, whether the corporate skills and capability required is transferable across the products. Putting a moisturising lotion in a tube calls for one set of product development and manufacturing skills; running a salon needs a very different ability to make sure the girls who attend to customers in dozens of salons have flawless skin!

Putting a logo on an aluminum can that carries 330 ml of beer is a bit different from running a business in which the logo is put on a 110 feet wide, 75-tonne container that carries 150 people.

Over a period of three million years the Australopithecus hominid has evolved through several ‘brand extensions’ into us: Home sapiens. But species of snacks don’t evolve overnight from a species of cooking oil. On the other hand, a Sunsilk shampoo and a Sunsilk conditioner seem so similar to me that I am not even sure a term such as ‘brand extension’ should be used.

So my sense is that all too often, brands may be getting extended on weak grounds, and the logic of the conference room fails to meet the logic of the kitchen counter. Of course there is no clear line between what is a ‘genuine’ brand extension and what is not, but that is where judgment comes in. Otherwise extending brands could become a matter of a rule of thumb. Which more likely than not, will get a thumbs down.


The author is co-founder, chlorophyll brand & communications consultancy

First Published: Mon, January 16 2012. 00:53 IST