“Stretch your brand, but watch your limits”

“Brand” is one of the most indiscriminately used and therefore, abused words in market place today. Many of them create an illusion of being a brand through their high profile campaigns, celebrity endorsements etc. But brands are not built overnight. Nor can they become powerful after one or two campaigns! It takes time, sometimes even years or a lifetime.

Brands are created to earn revenues. After creating a brand if brand name is not being leveraged, then the motive of creating a brand is not fulfilled. So, to leverage on to the brand equity of a brand it is important to extend a brand. But this concept have been contradicted by many scholars. Some say that the easiest way to destroy a brand is to put its name on everything .

AL Ries says that slowly but surely line extensions would take your brand off course. By giving an example of Budweiser, he says that introduction of bud light caused the downturn of Budweiser as a whole.The company thought that introduction of bud light would not be positioning that against the bud regular but taking the market away from miller light. This loss in focus caused the downturn of famous beer brand.

Experts call line extension the “hockey stick” effect. Short term you get the blade & score a few goal. Long term, you get the shaft. Line extension is a loser’s game. It doesn’t usually work, but even if it does it almost always damages the core brand. On the other hand, there’s the well documented evidence that line extension doesn’t hurt a leading brand as much as it does an also-ran.

Taking miller, introduced nationally miller lite in 1975 also didn’t hurt miller high life, the regular beer. With a powerful marketing program, by 1979 Miller High Life & Miller lite was rapidly gaining on market leader Budweiser. (It got within 20% of the King of Beers). Then Miller lite introduced as a bevy of line extension brands stopped Miller High Life cold. If they had little more patience they would have realized that line extensions are inherently more unstable. A successful line extension almost damages the core brand, if not initially but in long run.
Now, seeing the other side of the coin, practically speaking “a Brand can never stand still” if it does so brand will die. You are in a business to grow your business & it cannot be done without stretching your brand & leveraging on the brand equity of a brand. Brand creates associations in the minds of the customer & customer relates brand personality with his own personality. This is what drives Customers to build bonds with the brands & in doing so he wants to interact with the brand as much as he can. If the brand would not be present in different categories, that bond with the customer would not be possible.

Imagine kurkure with only one flavour, would not be able to serve customers with different tastes & become a Toma brand. Likewise lays coming with different flavours as line extensions & becoming the most dominant brand in the market. If kurkure & lays would have only limit itself to the original flavour it would have only able to cater to only few customers & would have lost on a larger customer base.

Moreover launching a new brand for every category would be difficult for the master brand. The probability of a new brand being unsuccessful really becomes high due to unawareness of brand & the cost incurred to launch a new brand & market it. To launch a new brand will be like missing an opportunity of leveraging on to brand name which already has been established. The brand creates association in the minds of the customer & it takes a long time to create those associations. A new brand would possibly be unable to create those associations initially which can affect the brand in a competitive market.

Now looking at both the sides, I would really say that line extension does not always affect the brand in a negative way. It all depends on industry to industry & how you project your extension. While proceeding with the Extension of a brand, a brand should see to it that its extension carry all the associations attached to it. So, finally “brand should stretch itself, but watch its limits”.