A stretch too far: brand extension mistakes
If all brand extensions were successful, we’d be popping our Colgate ready meals in the microwave, spritzing ourselves with Harley Davidson perfume, and eating Cosmopolitan yogurt. But unfortunately (or fortunately – those products sound terrible) many brand extensions fail to take off.
A brand extension is a new product or service launched under an existing brand name. The idea is that these new products take advantage of the established brand and ride off the back of its reputation and popularity. However, things usually don’t work out that smoothly. The vast majority of new products, including brand extensions, fail after launch and in many cases it’s not hard to see why.
Some companies make the mistake of thinking their brand is strong enough to carry any type of product to success, so they launch extensions that don’t fit with the parent brand at all. Take Colgate’s ready meals - who wants to be reminded of toothpaste when they’re eating dinner? And how did Evian ever think that launching a water bra would be a good idea? Brand extensions stand a much better chance if they logically fit with the existing brand, otherwise consumers are just going to be left confused.
Entering a saturated marketplace can be difficult for any brand, yet some companies assume that their brand name will be enough to entice consumers away from the products they always buy to something new. But breaking habits is hard. Even Virgin who’ve managed to successfully diversify into a number of industries have had their share of disappointments. Virgin Cola, anyone?
Creating a completely new product is always going to be a challenge. Even if a reputable brand is the one introducing a new product, it doesn’t guarantee that people will take to it. There are endless reasons why new products fail: there could be a huge learning curve involved, it might be too expensive, it could be something that consumers simply have no need for etc. Microsoft SPOT, the world’s first smartwatch, failed to make an impact when it was released in 2004. It relied on FM radio waves to send and receive data just as smartphones began to use cellular broadband to do the same. Bad timing.
But not all brand extensions fail. If done right, launching a new product under an established brand name will definitely give it an edge. Sometimes it’s all about finding the right fit, like Bic’s offering of disposable, plastic pens, razors, and lighters. Other times it’s about creating something new and great that people will actually want to use, like Apple’s iPhone and iPad. Sometimes taking the risk just pays off.
Brand extensions aren’t always a good idea. But if they’re carefully considered, they can work. Just remember, they’re brand extensions not brand departures, so make sure they make sense.