Expanding Brand Meaning Through Brand Extension

Sometimes a brand has too narrow a meaning to allow for significant growth. Often this is because it is primarily associated with one product category. In this situation, it is advantageous to expand the brand meaning beyond the core product category by extending it into new categories, uses and need segments. However, to be successful, this usually has to be done in stages. For instance, say you are a brand of oranges. You might be able to immediately extend the brand into orange juice without difficulty. However, you may not yet be able to extend the brand into other fruits or fruit juices or other product formats. So, the first step might be to extend the brand into the orange juice category. The next step might be to begin to brand lemons, limes and other citrus fruits. Once the brand is known in those categories, it might be able to be extended into lemon and lime juices. The next step might be orange, lemon and lime juice snacks. At some point, it might be possible to extend the brand into any food category that primarily has an orange, lemon or lime flavor. And maybe some time well into the future, the brand could be extended into non-food products that have an orange, lemon or lime scent. Any extension needs to be informed by brand extension research. Into what categories do consumers give the brand permission to exist?

The key for any of this is to have a long-term plan of where you want to take the brand but to pursue that plan one step at a time. And each step that you take should be informed by research. Ultimately, you will want to define your brand beyond just one product category. If defined by something broader, especially a customer benefit or a shared value, then the brand has a better chance of thriving well into the future. 

I wish you success in expanding your brand's meaning by extending it into new product and service categories. 

Common Brand Problems

Problem 8. Overextending your brand into different categories and markets so as to completely blur the brand’s meaning and points of distinction

Analysis. You can always make more money in the short term by licensing your brand out for use on a variety of products or by extending your brand into a myriad of new categories. The long-term effect, however, is detrimental. People no longer will be able to tell what your brand stands for. It will lose its meaning and its point of difference. Extend your brand based on a clear understanding of its essence, promise, archetype, and personality. And make sure your consumers “get it.”

Problem 9. Frequently changing your brand’s positioning and message

Analysis. New brand managers and marketing executives often feel as though they need to make a name for themselves to continue the climb up the corporate ladder. Don’t succumb to this temptation by changing the advertising campaign or the brand slogan, especially if the current ones are working well or haven’t been in place long enough for you to assess their effectiveness. Consistent communication over time is what builds a brand. After all, Hallmark has used its “When You Care Enough to Send the Very Best” slogan since 1944; the Marlboro Man has been Marlboro’s icon since 1955; Absolut Vodka has featured its bottle’s shape in consumer communication since 1978. Since 1921, General Mills has used Betty Crocker as its face to the public. Her portrait has changed in subtle ways eight times since then. If you do make changes, make them gradually in an integrated fashion, based on sound consumer research.

Problem 10. Creating brands or subbrands for internal or trade reasons, rather than to address distinct consumer needs

Analysis. There is nothing more inefficient or wasteful than creating a new brand or subbrand for a purpose other than meeting a different consumer need. Brands and subbrands exist to address different consumers and consumer need segments. It is expensive to launch a new brand (and very expensive to maintain multiple brands that meet similar consumer needs; it also adds unnecessary complexity to your organization). Worst of all, it dilutes the position of your original brand. This problem often results from egos and organization structure. People head up divisions or business units that deliver specific products or services. They create a name and identity to put on business cards and to rally their employees around, without considering whether the products or services are similar to products or services other divisions create. (This tendency has resulted in Hewlett-Packard having multiple printer lines: DeskJet, OfficeJet, OfficeJet Pro, LaserJet, DesignJet, DeskWriter, and PhotoSmart. It is unlikely that consumers understand many of these distinctions. They are likely to think of them all as HP printers.)

Sometimes, companies create separate brands or subbrands for trade reasons— for instance, to offer something different for specialty stores vs. mass channels of distribution. (Hallmark created the Expressions from Hallmark brand to offer mass channel stores while specialty stores continued to carry the Hallmark brand. These two brands don’t meet different consumer needs, and I’m not sure consumers perceive differences between the two.) This problem can also result from mergers and acquisitions in which the brands are neither rationalized nor strategically managed after the enterprises are combined.


Three of thirty-five common brand problems excerpted from Brand Aid, second edition, available here.

The Most Common Problems with Brand Extensions

Some of the most common problems associated with brand extension are:

• Extending into a category in which the brand adds nothing but its identity (i.e., its products or services are not significantly different from current products or services in the category)
• Extending through opportunistic brand licensing without regard to its possible impact on the brand
• Extending into lower (and, sometimes higher) quality segments
• Not fully understanding brand benefit ownership, transfer, or importance

Unsuccessful brand extension examples: 

• Bic perfume: How do you leverage the “small disposable pocket items” association?
• Levi’s tailored classic suits: What is Levi’s primary association? (casual clothes)
• Campbell spaghetti sauce: Why didn’t “tomato sauce” transfer from Campbell’s soups to spaghetti sauce?
• McDonald’s Arch Deluxe burger (for adults): What is McDonald’s primary association? (fast-food for kids)
• Bayer Aspirin-free: What is Bayer’s primary association? (aspirin)
• Volvo 850 GLT sports sedan: What is Volvo’s primary association? (safety) What is a Volvo’s primary proof point? (boxy armored-car styling)
• Colgate kitchen entrees: What were they thinking?
• Or, my all-time favorite, New Coke: What is Coke? (“It’s the real thing”—with a long-time secret formula.)

Excerpted from Brand Aid, second edition, available here.

Integrating Brand Strategy with Business Strategy

Not much has been written about the intersection of business strategy and brand strategy. It is surprising to me because this is the arena in which I most often find myself consulting. When I was at Harvard Business School my largest concentration was in business strategy. I was weaned on Michael Porter’s Competitive Strategy, Competitive Advantage and The Competitive Advantage of Nations. I am a firm believer that brand strategy, business strategy, business model strategy and competitive strategy need to be a finely woven tapestry. But to begin to envision this, we must understand the key components of each of these.

Organization/business strategy considers many things – mission, vision and values, organization culture, product/service portfolio, bundling/unbundling, market structure, entry barriers, exit barriers, market segmentation, market focus, proprietary technology, network effects, economies of scale, accessibility/distribution channels, value proposition, sources of differentiation, branding, business model/revenue sources, cost structure (including fixed vs. variable vs. semi-variable costs), vertical and horizontal integration, strategic partnerships, supply and demand, substitute products, disruptive technologies, societal trends, cash flow, organization structure, organizational agility, keys for executional success and sequencing of moves.

Related to this is an assessment of core competencies and value chain analysis. In what ways does your organization add value to the end product and in what ways are you spending money that does not affect the end product’s value? And are you capturing the value that you are generating?

Business model strategy considers how a variety of factors come together to create a profitable business model. Key to this are how you are going to generate revenue (target customers/customer base, revenue sources, distribution channels, etc.), what your gross margins will be (pricing strategy, cost structure, etc.), how you will operate the business, what your working capital will be (cash flow, reinvestment strategies, etc.) and your sources and costs of financing.

Competitive strategy focuses on achieving competitive advantage in the long run, often via one of these three approaches: cost leadership, competitive differentiation or customer segment focus.

Another discipline that can applied to strategy formulation is game theory. This fascinating branch of mathematics has real-world practical applications. If you can structure the competitive environment properly, you can insure a maximally positive outcome for your business. Another area that can inform strategy formulation is behavioral economics, that is, the study of human psychology and behavior as they relate to economic decision making.

Brand strategy should include target customer definition (including prioritization of need segments), competitive frame of reference, differentiating benefits, pricing strategy, distribution strategy and how one will achieve awareness, relevant differentiation, customer value, brand accessibility and emotional connection to the brand. Brand strategy can also include the brand archetype and personality, which are highly correlated with the organization’s culture.

As you can see, there are several points of intersection between these types of strategy. Here are just some examples:

• Mission, vision and values are closely related to brand essence and promise
• Organization culture generally has some alignment with brand archetype and personality
• Competitive frame of reference, market structure, market segments and target customers are fundamentally important to most of these strategies
• Product/service portfolio is the way the brand delivers on its promise
• The value proposition and sources of differentiation are closely related to brand positioning
• Business and brand strategy should consider accessibility and distribution
• Business model strategy, competitive strategy and brand strategy must consider pricing strategy
• Brand extension sometimes requires strategic partnerships
• All of these must consider societal trends to be viable in the long run

So, how does one insure that these strategies dovetail properly? Business strategy and business model strategy belong in the executive suite perhaps with the help of business strategy consultants. Competitive strategy links these to brand strategy.

Here are a few things that can help with integration. The brand strategy function should exist at a very high level in the organization. Graphic designers, copywriters and ad agency teams should not be crafting high-level brand strategy. They are too far removed from the work and discipline of business, business model and competitive strategy formulation. Marketing communication strategy and advertising campaign strategy are the appropriate level of strategy formulation for these functions.

Another integrating mechanism is the careful consideration of the nesting and sequencing of the strategic plans. That is, where does the brand plan fit into business planning?

One should also consider the role of brand metrics in a balanced scorecard.

Some organizations find that it is useful to use the brand as a way to rally the organization around its high level strategies. In this way, the brand positioning work may closely follow the establishment of the organization’s mission, vision and values.

Finally, it is important to have strategic thinkers and people firmly grounded in marketing research and analytical thought to be a part of the brand management team.  Brand management is a left brain/right brand activity. Strategic thought is as important as creative capacity.  And sometimes foundational research such as market assessment, attitude and usage studies, market segmentation studies, price sensitivity studies, volumetric forecasting and other types of predictive analysis inform strategy formulation in many of these spheres.

I wish you great success in integrating your business and brand strategies.

Recommended reading:

• Blue Ocean Strategy by W. Chan Kim
• Competitive Advantage by Michael Porter
• Competitive Strategy by Michael Porter
• Co-Opetition by Adam M. Brandenburger and Barry J. Nalebuff
• Crafting and Executing Strategy: The Quest for Competitive Advantage by Margaret Peteraf, John Gamble and A. J. Strickland III
• Creating Strategic Leverage by Milind M. Lele
• On Competition by Michael Porter
• Scaling Up by Verne Harnish
• The Art of Strategy by Avinash K. Dixit and Barry J. Nalebuff
• The Business Model Navigator by Oliver Gassmann, Karolin Frankenberger and Michaela Csik
• The Innovator’s Dilemma by Clayton M. Christensen
• Value Proposition Design by Alexander Osterwalder
• Zero to One by Peter Thiel

Mission Vision Values Essence Promise

Over the years, many business executives have asked me what the difference is between mission, vision, values, essence, promise and other statements of strategic intent. Here is my summary of that.

Strategy Component	Definition	Form
Mission	The organization’s reason for existing	7 to 25 words
Vision	What the organization wants to become – forward looking, aspirational, inspirational	7 to 15 words
Values	What an organization believes in and how its people should behave	5 to 10 core values in words or phrases
Brand Essence	The “heart and soul” of the brand, its timeless quality	Three words in the form “Adjective adjective noun”
Brand Promise	The one or two things the brand promises its target audiences that is/are very important to those audiences and unique to the brand	In the form, “Only [brand] delivers [one or two benefits] to [target audience]”
Brand Archetype	The pattern or model that underlies the brand, especially regarding its motivations and behaviors	Choosing the brand’s primary and secondary archetypes
Brand Personality	Describing the brand as if it were a person	7 to 12 adjectives

© 2015 by Brad VanAuken

For more information on this and other brand management and marketing terms, refer to Brand Aid, available here.

Did you know?

Research has shown that the media environment affects advertising claims. For instance, quality claims are more effective on elite or prestigious websites because people associate the claim with the media environment.
(Source: Dean Donaldson, “Location Matters: How Ad Environments Affect Performance,” Advertising Age, December 10, 2009, adage.com/article/digitalnext/location-matters-ad-environments-affectperformance/140980/.)

Aspirational, upscale, and high status brands have the potential to alienate customers who lack confidence. While these customers might admire these brands, they don’t feel comfortable using them. Building warmth, humor, and less formality into the brands to make them more approachable helps overcome this problem.
(Source: Max Blackston, “Observations: Building Brand Equity by Managing the Brand’s Relationships,” Journal of Advertising Research 32, no. 3, May/June 1992, pp. 79−83.)

Excerpted from Brand Aid, second edition, available here.

Branding & Product Design

Forgive me, this is more about product design than branding. Brand managers can do everything right but if they are not working with well designed products, their results may be less than hoped for. 

Product design can impact product appeal in several ways. First, the product can be aesthetically appealing or visually stunning. Second, the product may be unusually durable or sturdy. Third, the product may have unique functionality or ease of use. Fourth, the product may have ergonomic or tactile advantages. Fifth, the product may stimulate more senses than usual. All of this can result from superior design. 

To give you an idea of what superior design can lead to, here are a two very interesting links:

• 30 innovative products you did not know exist but are too awesome to miss
• 100 amazing futuristic design concepts we wish were real

Manage your brand well but encourage your organization to design unique or superior products.