14 of the Most (& Least) Successful Brand Extensions to Inspire Your Own

What Are Brand Extensions? Leveraging Your Brand for Growth

In today‘s hyper-competitive business landscape, growth is an imperative. But finding new avenues to drive that growth is an ongoing challenge. One powerful strategy that leading companies have long embraced is the brand extension – taking an established brand name and moving it into a new product category.

When done right, brand extensions allow you to take advantage of the awareness, favorable associations, and credibility you‘ve built up in your core business and translate that into success in an adjacent market. At a fundamental level, a brand extension involves using an established brand name to launch a new product or product line, often in a category that is different from, but still related to, the brand‘s original space.

Some classic examples include Apple moving from computers into music players (iPod) and smartphones (iPhone), Virgin extending from music into airlines, cola, and media, and Honda going from motorcycles to cars and lawn mowers. In each case, the strength of the core brand provided a platform to establish a new product and gain a foothold in a different market more rapidly than trying to build a new brand from scratch.

Why Extend Your Brand? The Strategic Rationale

So what is the strategic appeal of pursuing brand extensions? At the highest level, it comes down to growth – using your existing brand assets to drive expansion in a new category. But the specific benefits are multi-faceted:

Instant awareness and credibility: With an established brand, you‘re starting with a built-in level of consumer awareness and trust that makes your entry into a new category significantly easier.

Lower customer acquisition costs: Convincing consumers to try your new product is much simpler when it carries a name they already know and like.

Capturing more wallet share: Offering multiple products under your brand umbrella gives you more opportunities to gain a larger share of your customers‘ category spending.

Amortization of branding investments: The investments you‘ve made in building your brand pay further dividends as you‘re able to leverage that brand to support additional products.

Reinforcing your brand identity: Moving into related categories that fit with your brand positioning can actually strengthen and clarify what your brand stands for in consumers‘ minds.

Of course, brand extensions aren‘t without their risks. A poorly conceived or executed extension that isn‘t true to your brand can create confusion, disappoint customers, and even damage your core brand equity. The key is to approach brand extensions strategically, with a clear understanding of your brand and a disciplined process for evaluating and executing on extension opportunities.

Types of Brand Extensions

While the term "brand extension" covers a lot of ground, it‘s helpful to distinguish between a few common types:

Line Extension: This is the simplest and most direct form of brand extension – essentially launching additional items within your existing product category, such as new flavors, sizes, formats, etc. Examples include Coke launching Cherry Coke and Diet Coke or Tide offering different scents and formulations of laundry detergent.

Category Extension: Here, you‘re taking your brand into a distinct but related category from the one you currently compete in. A classic example is Arm & Hammer extending from baking soda into toothpaste, deodorant, and laundry detergent.

Brand Franchise or Brand Family: This is when a brand becomes a broad umbrella for multiple product lines in diverse categories. Virgin is a prime example, encompassing airlines, hotels, mobile phones, and more under a single brand with a shared identity around adventure, fun and good value.

Co-Branding: Co-branded extensions involve two separate brands collaborating on a joint product or product line, such as Nike and Apple launching Nike+ electronics together or Betty Crocker partnering with Hershey‘s for a line of baking mixes.

Choosing the Right Extension Opportunities

Not every extension idea is a good one. To identify the most promising opportunities, you need a clear-eyed assessment of your brand‘s strengths and permission to extend. Start with your brand positioning – what functional, emotional and self-expressive benefits does your brand deliver? What is its overarching purpose and reason for being?

The most natural places to extend are into categories that fit with and reinforce your core brand associations. Ask yourself if the new product is something that will feel like an authentic and credible offering from your brand. Does it deliver on your brand promise and connect back to the central job your brand does in consumers‘ lives?

Will customers easily grasp why your brand has entered this new space? If it feels random or disconnected from what your brand stands for, the extension is unlikely to succeed. Target‘s launch of a short-lived line of fine jewelry fell flat because it was a misfit with customers‘ view of Target as an affordable, casual, mass market brand.

It‘s also important to soberly assess demand and the competitive landscape. Is there a real consumer need that your brand is uniquely suited to meet in this new category? How crowded is the category and how entrenched are the existing players? Having a differentiated value proposition that you can credibly deliver on is vital.

Finally, consider your organizational capabilities. Do you have the skills and systems in place to develop and support a winning offering in this new arena? If it requires fundamentally different capabilities from your core business, an extension may prove very difficult to pull off. Cosmetics giant Revlon‘s disastrous acquisition of the Max Factor and Betrix skin care lines in the 1990s illustrated the perils of straying too far from your area of expertise.

Setting Your Brand Extension Up for Success

After you‘ve selected a compelling extension opportunity, the real work begins in bringing it to market effectively. Some key success factors to focus on:

Leverage your equities: Structure your extension to maximize the transference of your core brand equities. Use familiar brand elements like your logo, packaging graphics, slogan and more to make it easy for consumers to recognize that this new product is from the brand they trust.

But be different: At the same time, avoid being so "on the nose" that your extension feels redundant with your existing offerings. Give it a reason for being and a distinct appeal within your brand family. Apple has deftly walked this line with its product extensions, with each one (iPod, iPhone, iPad, etc.) filling a clear niche for the brand.

Stay true to your brand character: While your extension may serve a different specific purpose than your core products, it should still connect back to the underlying character and essence of your brand. Ask if the personality and attitude of the extension sync with expectations for your brand.

Execute with excellence: Your extension needs to deliver an excellent experience in its own right, not just coast on your brand name. Invest to create a superior product, supported by great packaging, marketing, in-store execution, and customer support.

Promote intelligently: Give your extension the right media support to generate awareness and trial. But avoid going overboard in a way that overhypes the product or creates unrealistic expectations.

Measuring Success and Course Correcting

As with any strategic initiative, it‘s critical to put clear metrics in place to gauge the performance of your brand extension. Track indicators like rate of sale, market share, profitability, and incrementality to understand if the extension is meeting your objectives.

It‘s also vital to assess harder-to-measure factors like the impact on perceptions of your core brand. Have any of your brand favorability or imagery measures shifted following the launch of your extension? Getting direct customer feedback through surveys, social listening, and other means is important to uncover any potential negative reactions before they snowball.

If you find your extension is struggling, you may need to adjust your strategy. That could mean tweaking the product, revamping your marketing approach, or in some cases pivoting away from the extension entirely to avoid extended damage to your brand. Pulling the plug on an extension can be painful, but it beats letting a losing proposition linger and weaken your brand over time.

Learning from Others‘ Successes and Failures

History is littered with examples of brand extensions that have both soared and flopped, and examining these cases yields valuable lessons. Some key takeaways:

Extensions that enhance a brand‘s core meaning tend to succeed. Michelin‘s launch of travel guides built on the tire brand‘s associations with safety and performance. By contrast, Zippo‘s bizarre entry into women‘s perfume weakened its image as a rugged, masculine brand.

Stretching too far is dangerous. Harley-Davidson‘s foray into wine coolers (yep, that really happened) was a bridge too far from motorcycles that diluted the brand‘s distinctiveness.

Execution matters as much as strategy. While Colgate‘s frozen entrees were conceptually in the neighborhood of oral care, the products themselves were terrible, dooming the extension and damaging the brand. On the flip side, Reese‘s Pieces succeeded because they were simply delicious, building on the strength of the core product.

Brand extensions, when approached strategically and executed skillfully, can be a powerful growth engine. But they are not without risks, and must be managed carefully to avoid backfiring. By following a disciplined process and staying true to your brand‘s identity, you can greatly increase your odds of success.