A brand is like a rubber band. If you don't stretch it, you are not maximising its potential. If you over stretch it, it will snap. So, how much should you stretch it?
Brand extension is a tricky business. Data shows that an estimated 70 percent of brand extensions fail. Image: Shutterstock
Brand extension is a commonly deployed strategy for growth by expanding brand potential. It is about extending the same brand name into an adjacent or new category. Having invested in creating a brand, it is a logical step for a company to leverage the brand equity by expanding its portfolio.
A brand is like a rubber band. If you don’t stretch it, you are not maximising its potential. If you over stretch it, it will snap. So, how much should you stretch it?
Colgate’s mad extension into Frozen Meals in the early 1980’s is a prime example of over stretch. The women’s fashion magazine Cosmopolitan went bonkers and launched low calorie yoghurt under the same name.
Pepsi Crystal failed because people expected a cola taste and colour from the Pepsi name and not a colourless, citrus drink. On the other hand, Pepsi Max is a big hit because it offers the same Pepsi taste, with zero sugar.
Brand extension is a tricky business. Data shows that an estimated 70 percent of brand extensions fail.