We’ve all been there: pressure from investors, the board or the CEO tocapitalize on your brand by quickly applying it to one or more new productsor services. One of the most common mistakes in brand management occurs whena brand is extended too soon.

Based on their metrics for success in onecategory, many teams may seize on extension through licensing, perceiving itas a low-cost means of generating revenue, most of which can fall to thebottom line – a heady temptation! Also, those calls and emails may startcoming in from licensing agents dangling big opportunities if only you letthem manage your brand extension plans! I would suggest a few questions toask yourselves before seriously considering extension:

First: Do you truly understand your current customer? Most brand executiveswill just nod their heads here or think about their target customer, ratherthan their actual customers. Knowing the answer to this first questioninvolves in-depth research. Who are your brand loyalists and what is itabout your brand that they love? It’s essential to understand this as: a)brands cannot risk their current business by alienating the brand loyalistswon so far and, b) the brand must continue to deliver what they want in anyextension product or service. It is very important to articulate the uniquetransferable characteristics of the brand before embarking on a growthstrategy.

Second: Is the reach of the brand wide enough to support new products? Forexample, a brand may be well known in the Southwest, but does it havesufficient recognition and equity in other regions to support an extensionwith national distribution plans? If a brand is only known to automobileaficionados, are there enough of them shopping in the grocery channel toensure a success there? Again, this evaluation requires research andclear-eyed analysis.

Third: If the results of the research indicate some “holes”, either in brandperception or reach, is the company willing and able to invest in themarketing necessary to fill in those holes?

Fourth: In what markets and product/service categories could the brand meetchannel and consumer needs? Again, knowing what needs a brand currentlyfulfills is essential to answering this question, as well as extensiveanalysis of any new product categories considered. Not to mention a bit ofinspired creativity!


Tracey Nelson
Principal, Maven Marketing Solutions