Earlier this week, I wrote a post that described the argument FOR brand extensions. Today, I’m going to take a look at the other side of the brand extension argument and discussing why extending your brand can cause problems for your brand and business overall.
Consider these risks of brand extensions:
Confusion: If you over-extend your brand, you run the risk of diluting that brand’s power. I’m sure most of us have been in an aisle at a supermarket at some point and had trouble finding the exact product we were looking for amid the many products a specific brand offers. Some brands have so many extensions that finding the one you want is like looking for a needle in a haystack.
Loss of Focus: Having too many products under the same brand umbrella typically requires over-extending your resources. As employees spend less time on each brand, consumers will do the same, and your overall business will suffer.
Consumer Shift: While adding another product might seem like a quick way to increase profits, when that product comes under an existing brand umbrella and within an existing product category, a company runs the risk of simply shifting market share from the existing product to the new one without actually gaining new customers. Rather than helping the business overall, a shift like this simply hurts the existing product.
Negative PR: One mistake within a single brand umbrella can hurt every product with that brand name attached to it. Think Tylenol. Of course, Tylenol eventually recovered, but there was a time some 20 or 30 years ago when the Tylenol team was struggling to survive after negative publicity related to product tampering nearly destroyed the brand and the company.
The lesson to learn is this – while brand extensions can seem like a quick and easy way to guarantee success of a new product, marketers need to be aware of the inherent risks in brand extensions and carefully plot a strategic course for success rather than blindly slapping a successful brand name on one new product after another.
What do you think about brand extensions?
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