As you learned in Part 1 and Part 2 of the Brand Extension Principles series, not all brand extensions are good ideas and not all brand extensions are successful. There are risks associated with brand extensions, and there are mistakes that can be made that can lead to brand extension failure. Without proper research, strategy, and planning, brand extensions have little chance to make it. With that in mind, it's time to take a look at some well-known brand mistakes and the lessons to be learned from them.
Many companies make the mistake of assuming brand extensions succeed based on the reputation of the parent brand alone, but this assumption can backfire in a couple of ways.
- Brand Cannibalism: There is the potential for brand cannibalism where the extensions don't enhance the parent brand but rather shift market share from it or damage its reputation.
- Brand Dilution: The brand could become a victim of brand dilution, which is a common result of a over-extending a brand. This is a popular trap in celebrity branding (think of the Kardashian family).
- Brand Inaction: A brand can suffer from inaction and fail to extend a brand at the appropriate time. Kodak and Polariod are both perfect examples of failure to extend a brand resulting in the descent of the parent brand's relevance and sales.
As you learned in Parts 1 and 2 of this series, there is a lot more that goes into brand extension success than a well-known brand name. The companies behind the brand extensions listed below learned that lesson the hard way.
In 1992, Pepsi jumped on the clear and natural craze with a clear version of its flagship Pepsi product. However, while consumers were actively looking for more natural, healthy products and bottled water was stealing market share from carbonated beverages, there was simply no demand for a clear variation of loyal consumers' preferred cola.
Life Savers Soda
When Wrigley launched Life Savers Soda, it turned out that consumers didn't care what it tasted like. They couldn't get past their perceptions of the Life Savers brand as candy, and no one wanted to drink carbonated liquid candy.
Cosmopolitan magazine is popular among women around the world, but that doesn't mean the audience believes the brand is a good fit in non-media categories. In 1999, low-fat Cosmopolitan Yogurt debuted. It was marketed as a sophisticated and inspirational brand choice and came with a higher price tag than other yogurts. It failed within 18 months.
In 2003, the Hooters restaurant brand extended to the airline industry. At first glance, you might wonder what a restaurant chain was doing entering the airline business. Airlines operate very differently from a business like Hooters that hires scantily clad women to serve bar food to a niche audience of consumers who, as BusinessWeek describes, "doesn't necessarily include lots of frequent flyers." By 2006, Hooters Air was no longer offering commercial flights.
Of course, there are many other brand extension failures that prove the need to research and strategize before you launch a new extension. In Parts 1 and 2 of the Brand Extension Principles series, I referenced Bic Underwear, New Coke, Colgate Kitchen Entrees, the Jaguar X-Type, and Coors Sparkling Water. Each of the parent brands in all of these examples had a great deal of equity at the time these extensions were launched, but for varied reasons, each failed.
Remember, brand extensions are most successful when the parent brand is strong and has a loyal customer base, but brand extensions cannot live on parent brand reputation alone. They have to fit, meet customer expectations, fill a demand or void, and offer a distinct benefit to consumers.
Stay tuned for Part 4 of the Brand Extension Principles series, which will highlight successful brand extensions to learn from. In the meantime, follow the links below to read Parts 1 and 2:
- Brand Extension Principles - Part 1: What Is a Brand Extension and Why Extend a Brand?
- Brand Extension Principles - Part 2: Brand Extension Research and Strategy