Ever seen a brand release a new product that makes you wonder, “What were they thinking?” Often this happens when a brand that’s known and loved for a specific product ventures into a completely different category of products. This is called brand or category extension. Using your brand to enter into an unrelated product segment can by risky. Even if your brand is well-known, slapping its name and logo on any product won’t automatically make that venture a success.
While there are undoubtedly cases where brands have taken a chance and attempted category extension with positive results, there are probably more cases where brands have flopped, or have left their consumers scratching their heads.
This happens for a few reasons: for one, a category extension should be at least somewhat relevant to your brand. There was a case in the 1980’s when Colgate brand, known for their dental products, released a line of TV dinners. It didn’t matter how appetizing their frozen meals looked on the packaging, ultimately the image of Colgate’s logo paired with a vegetable and rice dish just didn’t mesh. Secondly, though your brand may try to push a product onto your consumers that may seems somewhat related to your brand, perhaps your brand is too associated with its already well-known and loved products for that category extension to work. A good example of this would be when McDonald’s tried selling pizza at its stores, or more recently, when KFC released a fried chicken-flavored edible nail polish. Or perhaps you’ve come up with a product to release under your brand’s name that you think might fulfill an unmet consumer need, when there was never a need for it at all. When Heinz released green ketchup in the 2000’s, the product was initially met with relative success, but by the time they added blue and purple colors to the line, the novelty had already worn off.
Still, there are triumphant examples of category extensions. Some are pretty out there, and probably worked because of the time in history in which they occurred...for example, the Guinness Book of World Records, which was initially conceived in 1955 as a marketing giveaway campaign for the beer company, eventually evolved into a globally recognized category extension. Another example would be the Michelin Guide - initiated in 1926 as a way to boost car sales and get people to travel and try out new restaurants, the tire company’s restaurant guide is now the most trusted source for haute cuisine - earning stars from the guide signifies the utmost level of prestige.
Some more recent and relevant examples of good brand extension range in a variety of categories - the creation of O Magazine under Oprah Winfrey’s personal brand, or soap brand Dove venturing into hair products and skincare. Why do some of these category extensions work, while others fail?
Well, for starters, you should make sure a product you plan to release under your brand is somehow relevant. Think of your brand equity - you don’t want a category extension to make your consumers lose trust in your brand. Having that in mind, be sure that your brand extension somehow fulfills an unmet consumer need. This is especially failsafe if you’re able to identify a need that consumers didn’t even know they had. There are more and more opportunities to do this in the Digital Age - think Amazon.
Does it seem to risky to you? Well, if done right, a category extension can have many advantages. Besides the obvious, sales-wise, brand extension could potentially improve your brand image and visibility, increasing your brand equity. It can be a good way to invigorate your brand if it’s dated and in need of a refreshing. Additionally, if your brand is already well-known, you won’t have to spend too much in advertising and promoting.
If you’re thinking of spicing up your brand with a brand extension, you can count on us here at 121 to do everything in our power to uphold your brand equity. We know the risks that expanding into a new category brings, so we know what mistakes to avoid. Get started by giving us a call, let’s explore the possibilities!
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Last Edited on May 25, 2018