Communication Matters: Brand Extensions

A previous article described a line extension strategy which happens when a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes. This article explains brand extensions which are when a new product goes into a different product category.

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If successful, a brand extension will introduce a brand into a larger market or area. For this reason, brand extensions are sometimes called brand stretching. The CMO Club summarized benefits as:

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·??????? Cost savings.

·??????? Competitive advantage.

·??????? Risk mitigation. Consider that the failure rate of new products is over 90%. Brand extensions are five times more successful than new products.

·??????? Faster adoption

·??????? Increased market share

·??????? Increased customer loyalty

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Why are line extensions so powerful? It all has to do with understanding brand equity. Extending a product line into a completely different category can attract buyers who (1) have different preferences and (2) are already familiar with the brand.

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When brands stray too far into a different category they fail:

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·??????? Ben-Gay aspirin

·??????? Smucker’s ketchup

·??????? McDonald’s McPizza).

·??????? KFC edible nail polish

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Perception maps show when stretching is infeasible. Also, another valuable tool tells when a company launches too many line extensions. A research technique called a TURF analysis, which stands for Total Unduplicated Reach and Frequency Analysis, is the potential impact of a combination of products, features, or marketing actions on consumers' purchase decisions.

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We have managed many communication engagements to help clients – both research and consulting --. That is what we do. Please write or call to learn more about TURF or Perception Maps.

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Email: [email protected]

Cell: 203 253 2403

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