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Brand Extension a Gamble

Brand Extension a Gamble

Brand extension. To do it or not!!

That is the question.

Every successful brand which is going strong in the market has one reason behind it. It’s association with the customers and the consumers. And it is this strong association that ultimately leads to profits and sales.

So how to take leverage of this? Is the answer Brand extension?

May be or may be not. It is a gamble any company has to play wisely and cautiously.


Let’s explain it with an example. Reebok into sportswear, sports shoes, and sporty college bags…may be later into gyms….yes! Understandable.

Wipro into computers, finance, medical equipments, soaps and baby powder. Erm…not understandable!!!

Here in the former case, brand association remains the same i.e.  of a health, fitness conscious brand.

But with Wipro, nothing can really come to your mind when brand image has to be dissected.

That’s one reason why brand extension needs to be done carefully. If handled lightly it might lead to deviation from the core meaning.

It leads to unstructured core competencies and hence doubt leaks on the reliability factor. Take the example of burger king a given by Fast magazine.

Burger king opened men’s apparel abroad and you can well imagine how it was looked at.

Brand extension was one option NOT opted by few brands. Al Ries and Laura Ries in their book -the 22 immutable laws of branding, explain this with brilliant examples.

Take the example of Mc Donald’s. It today has on an average 60-70 individual items on their menu list. When it began it had just wonder subway overtook it in position.

Nike ,Microsoft ,coca cola all have been very careful in extensions and have rather approached brand contraction because loosing brand focus could have been very devastating for the brand.

But it’s not that extensions have always been bothering brands, take Unilever’s example. It is earning profits via extension and has been able to contain the brand theme all this while. And if at all it faces the danger of brand identity dilution, it comes out with individual brands too. But as a master brand it can afford to experiment with such ideas.

But even Unilever faces problems when it comes to retail space as it clutters the retail reliability factor. And publicity is very difficult to do. Hence they depend only on advertising.

So brand extension is a great and expensive gamble a brand has to decide upon and if done well, sales and profits follow but if it goes wrong, it may land up in confusion like Kellogg’s street wear did.

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