Brand extension: how to avoid over-stretching your brand

Brand extension

I recently had the chance to work with an exciting, fast growing fashion label. In the past few years, they went from being a traditional brand of clothes to becoming a fashion mentor for young designers and a brand incubator for other independent labels.

When I first met them, the idea was to discuss a potential collaboration in marketing; however, well into our conversation, I realised that I had a problem: I had no clue of what the company actually does! Yes, they were helping other fashion labels to grow, AND teaching future designers, AND organizing fashion events for companies, AND doing very well with their social media followers, but what was this brand really about? Every time I tried to ask this question the CEO would give me a different answer for the company’s goals. A look at the Head of Marketing and my fears were confirmed: the company was growing in so many directions that nobody had a clue of what they were doing anymore, and especially of what they were supposed to do.

Luckily for me, the CEO is a very switched-on person when it comes to opportunities for improvements, and as soon as I pointed out my feelings and how I thought that some good old brand strategy would have helped, she eagerly agreed to my plan.

I started by asking her what her view was about the company, what the values were, and where she was seeing the label heading. Then I organized an online survey with the top management, asking similar kind of questions, trying to see if everybody was aligned and where the gaps were.

The most interesting part of the exercise was that nobody, at any point, said that at least one of the goals was to actually sell clothes. Everybody was so focused on high-end objectives (“to make women feel beautiful”, “to mentor young designers”, “to help other labels succeed”), that they forgot that without selling clothes, none of the other objectives would be reached.

Once the problem was clear, we sat down to do some brand training and develop a clear strategy for the company and all its extensions. I think I’ve loved only a few projects as much as I loved this one!

So, these are my key suggestions for companies that are expanding:

1) Before even starting to consider extensions, take a good look at yourself: what are you really good at? Why do customers come back to you? What is your brand about, it’s personality? What are your unique selling propositions that make your brand successful? Will your extensions affect this?

This first step is critical in choosing which direction to take. You want to avoid opportunities that might look good but in fact, harm your parent brand. For instance, you don’t want to associate your brand with products or services that are not in line with your values and with the brand personality that your consumers associate with your business.

In the same way, you don’t want to scare away your existing customers by embracing a completely different line of business. For example, if you are a corporate events organiser, you might not want to rush into kids’ parties (this is a true story). There might be similarities for you in managing both, but your corporate clients might lose trust in your expertise. You can still do it but you need a plan on how to manage the extension, which brings me to the next point…

2) Define a clear brand architecture: how are your brands interacting among themselves and how are these interactions perceived by your customers?

‘The Brand Relationship Spectrum’ of Professor David Aaker and Erich Joachimsthaler is a classic way to visually describe possible types of brand architecture. Depending on the role that the parent company has in relation to its extensions, you will have one of the following:

House of Brands: each brand is independent, with a silent parent company behind them. Some brands are completely disconnected, like Whiskas (food for cats) and Mars (chocolate bars). Others have what is called a shadow endorser, for example, GSK with Panadol.
Endorsed Brands: The parent company endorses the other brands. The endorsement can be a Token Name, like Dockers and Levis, Linked Name, like McMuffin, and Strong endorsement, like Marc by Marc Jacobs.
Sub-Brands: The parent brand overlies separate trademarked, sub-brands. Examples include: Gillet Mach 3 (co-driver), and HP Deskjet (master brand as driver)
Branded house: where the parent company is the brand. The best example is Apple, where every product and division (iPhone, iPad,…) follows the same brand strategy, values, and identity as the parent brand.
So what should you choose? Each business has its own characteristics and each type of brand architecture has its pros and cons. You need to consider how the extensions can benefit from association with the parent company, and how they can affect it, positively and negatively.

For more reading on the subject have a look at:

http://www.stepchangemarketing.com/blog/what-is-brand-extension
http://www.brandingstrategyinsider.com/2014/01/brand-architecture-strategy-guide.html#.VS9e3M4d1_Y

3) Create a brand roadmap for the parent company and the extensions to help keep everyone aligned.

Your brand roadmap should include:

  • A definition of your brand (1 or 2 sentences to describe what your company does)
  • Brand mission: a description of why your company exists, what its main purpose is (focus on the benefit to the customer.)
  • Brand vision: where do you see your company heading in the next 10 years? This is a general indication but you should focus on both qualitative and quantities goals.
  • Brand promise: your commitment to your stakeholders. It’s more than just a slogan, it’s what you promise to deliver; not necessarily in terms of products or services, but in terms of experience with your brand, in terms of your cultures and values. Great examples of brand promise are: Virgin (“To be genuine, fun, contemporary, and different in everything we do at a reasonable price”) and FedEx (“Your package will get there overnight. Guaranteed”)
  • Your brand values: what your company stands for, the values that capture the spirit of your brand.

Then you can start to drill down on your annual goals, the strategies to achieve them and the tactics that fit under the strategies.

But be careful! Recently, many companies have started to write down their values, vision, promise etc… to then proceed to impress them on the employees as absolute truths. Results: employees are disengaged, they don’t believe in what the brand stands for and live the brand roadmap as an imposition instead of as a guide. So many times I heard “don’t talk to me about our values, I know them by heart but truly, they mean nothing to me”. The point is that a brand strategy needs the entire organisation behind it to be successful. Of course, you need someone to lead, but you need to engage at all levels, during the creation, the execution and also the review. Talk to your employees, listen to them, find out how they perceive your brand and ensure that your vision, mission and values, resonate with what they feel about the company. If strong discrepancies are uncovered, you need to address them.

As for what happened with my client, we sat down together to define a brand architecture where we highlighted the pillars of the business, what the goals were for each of them and how they would work together for the success of the business.

Changes were made. Some of the business activities were moved under a separate brand, to avoid associations that were damaging the label, and all the activities were re-organised in a structured and effective way under the different brands.

Now, this label is still making beautiful dresses, and mentoring designers, and helping independent labels, BUT in a strategic way.

About the author: Giulia Iannucci is a brand strategist and marketing consultant, founder of KnowThyBrand

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