BJ Bueno:
How do you know when your brand is ready for extension?
Tracey Nelson:
One of the most common mistakes in brand management occurs when a brand team jumps into extension too soon. Based on their metrics for success in one category, many corporate teams seize on extension as a low-cost means of generating licensing revenue, most of which can fall to the bottom line – a heady temptation! Also, those calls and emails start coming in from licensing agents dangling big opportunities if only you let them manage your brand extension plans! I would suggest a few questions to ask yourself before seriously considering extension:
First: Do you really understand your current customer?
Most brand executives will just nod their heads here or think about their target customer, rather than their actual customers. Knowing the answer to this first question involves in-depth research.
Who are your brand lovers and what is it about your brand that they love? It’s essential to understand this as: a) brands cannot risk their current business by alienating the brand lovers won so far and, b) the brand must continue to deliver what they love in any extension product or service. It is very important to articulate the unique transferable characteristics of the brand before embarking on an extension strategy.
Second: Is the reach of the brand wide enough to support new products?
For example, a brand may be well known in the Northeast, but does it have sufficient recognition and equity in the Southwest to support an extension with national distribution plans? If a brand is only known to automobile aficionados, are there enough of them shopping in the grocery channel to ensure a success there? Again, this evaluation requires research and clear-eyed analysis.
Third:
If the results of the research indicate some “holes”, either in brand perception or reach, is the company willing and able to invest in the marketing necessary to fill in those holes?
Fourth: In what markets and product/service categories could the brand meet channel and consumer needs?
Again, knowing what needs a brand currently fulfills is essential to answering this question, as well as extensive analysis of any new product categories considered. Not to mention a bit of inspired creativity!
Our Brand Extensions Strategist
Tracey is a recognized leader in the fields of brand management and brand extension. She has over twenty years’ experience in senior strategic brand management and consulting positions for world-class multinational companies, including Polo/Ralph Lauren, FILA Sports and Turner Networks. Her work spans multiple channels, product categories, industries and countries and her cross-industry experience gives her a unique perspective and expertise on the potential of brands to mine new revenue opportunities while enhancing brand equity.
Consistently designing and delivering on growth-oriented strategic and business plans for large enterprises, Tracey has also crafted numerous strategic alliances between brands and companies. She has a track record of building consensus around common goals, across multiple departments, divisions and companies, as well as a P&L management track record and perspective.
Tracey received her MBA, with a concentration in international marketing, from the Thunderbird School of Global Management. She is on the faculty of the University of Texas’s McCombs Graduate School of Management. Tracey speaks on multiple brand topics to industry groups and serves as an expert witness in trademark litigation.
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