Is a “Brand Umbrella” Right for You?

When a company extends a brand (launching new products or services under the same brand umbrella), it’s expected that the new product or service will benefit from the popularity of the existing brand. This reduces advertising costs (people already know what the brand stands for) and increases sales potential (people already trust the brand).  Great brand extensions can even help the parent brand.

But brand extensions aren’t always a good thing, and here’s why.

It might not be time to extend your brand at all if a brand extension could damage your parent brand by not living up to consumers’ expectations for the brand or confusing them. In other words, if a brand extension doesn’t fit the existing brand image or worse, runs counter to it, then not only will that brand extension fail but the parent brand could be damaged, too. Make sure if you go with a new logo design, it is professional and helps boost confidence in your new brand.

Brand extensions should accomplish three primary things for your business:

1. Brand extensions should strengthen the parent brand.

2. Brand extensions should create new benefits or modify existing benefits to appeal to a new audience.

3. Brand extensions should not alienate existing customers.

More products doesn’t automatically equate to more sales and profits. If yours is a motorcycle brand with a well known automotive logo, don’t launch cake decorating kits (a true story by the way). Not only does the extension not match consumer expectations based on the existing brand image, but it might generate more bad feelings and publicity than you can imagine (that’s what happened to the motorcycle company that extended into cake decorating).

Therefore, avoid extending your brand into lines of business that are not a natural fit with your original business. It can be done successfully, but more often than not, such a strategy doesn’t end well. Instead, consider introducing new products and services within your existing product line or creating a new category for your brand extension. Starbuck’s did it with high-end coffee experiences. Think about how you can create a new category with your brand as the pioneer.

Before you take your first step into extending your brand, ask yourself the following 5 questions to make sure it’s the right time for a brand extension:

1. How will a brand extension affect the parent brand and my company in the short-term and the long-term?

2. Does the brand extension highlight my parent brand’s strengths and value proposition? Does it downplay my parent brand’s limitations?

3. What benefits does the brand extension deliver to consumers?

4. How does the brand extension add value to the parent brand?

5. Will consumers accept my brand extension into new product markets or is my parent brand too strongly linked to a specific category of products, making an extension into a new market difficult for consumers to understand and accept?

If you decide to extend your brand, be sure to keep track of the performance of the extension as well as how that extension affects your parent brand. Overall brand health is critical to the success of your business.

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