As a small business, you face the same brand dilemma your larger competitors do. What do you do when your branded products level off in appeal? How do you respond when sales stagnate or slow down? One way to get out of this sales rut is to rethink ways your brand can be useful to consumers. Maybe it’s time to do what the big boys do and launch a brand extension.
What Is a Brand Extension?
A brand extension is the launch of new products under an already established brand name. You don’t have to come up with a new brand, which is costly. Instead, you can create any number of new products as an "extension" of a familiar brand.
Wouldn’t your customers respond to something new and fresh? That’s ultimate goal of an extension launch. If people love your extended products, you’ll happily see a new source of profits flowing into your bank account. First, you must get the product creation step right, and before launching additional products, consider freshening the look of your brand logo as well. An easy way to approach new product creation is to remember this simple formula: fit, leverage, and opportunity.
Are the New Products the Right Fit for Your Brand?
If you’re like many creative entrepreneurs, your mind is already buzzing with ideas for potential new products. That’s good! Don’t limit your creativity. But remember — creative doesn’t mean crazy. Just because a product is a cool idea doesn’t mean it’s the right fit for your brand. In fact, most ideas you brainstorm are probably going to be a bad fit. Like a detective, you’re on the hunt to discover that one brilliant idea that’s going to spark renewed interest in your brand.
So what makes a good fit? Look for ideas that make logical sense to customers who like your existing branded products. Say you sell a brand of women’s workout wear?. Should you extend your brand to sell men’s workout clothing? Perhaps, but men may not like buying clothing with a strong female vibe, and you’d have to develop a whole new customer base. Instead, what about expanding into branded workout gear? This may be a better fit.
How Can You Leverage the Popularity of Your Existing Brand?
Is your brand well-known, even within a niche audience? Then leverage your brand’s marketing power. Customers already know about your brand, and they have certain expectations of quality, price, and user experience attached it. As long as your new products meet your customers’ expectations, the solid reputation that comes with your brand can spur people to try something new.
Can You Increase Profits With the Extension?
Before going all in on your plans for a brand extension, run the numbers. Don’t forget all the research and development costs, manufacturing costs, and market testing costs. You’re also going to spend money promoting the launch. Are you going to make enough sales to justify all the money spent? Only extend your brand if you see a realistic opportunity to reap good profits after launching.
Ask Your Customers What They Want
Why waste time guessing what new products your customers want? Instead, reach out and ask them what they’d like you to make. Customer surveys are a great way to get feedback on new product concepts. Use that feedback to zero in on the most popular ideas and suggestions, then make your customers’ dreams come true. By paying attention to customer desires, you have a better chance of making your new products a hit.
Are Some of Your Products at the End of Their Life Cycle?
Every product you sell has a natural life cycle. Sometimes the life cycle is long, and sometimes it’s relatively short. When sales of a product sharply decline and remain weak, it may be time to phase it out. As you do so, replace them with new, improved versions. In this scenario, the new products may share more than a few similarities with older versions, but newer models have snazzy new features that get your customers excited.
Apple iPhone brand extensions offer a glimpse into how some companies handle product life cycles. Notice how iPhone fans get excited before a new model comes out. On launch day, iPhone fans eagerly stand in long lines, regardless of weather conditions, patiently waiting their turn to buy the latest version of their favourite smartphone. It doesn’t matter if the one they own works perfectly fine. Their attitude is "out with the old and in with the new."
This type of brand extension clearly works well with a product that has a pretty short life cycle, like an older iPhone. While your products may have longer life cycles, always think ahead. Plan your next extension product before the current one runs out of time.
Avoid Overextending Your Brand
Popularity certainly helps with brand extension, but there’s a downside. Trying to sell too many branded products to a large amount of customers can devalue your brand to the point of destruction. When you slap your brand logo on dozens of products, they can quickly lose value as soon if customers decide your brand is no longer cool or desirable.
It’s much safer to be like Canada Goose, which protects its brand by being selective in the creation and marketing of additional products. Canada Goose is a trendy Canadian outerwear brand with a reputation for making super-warm jackets. Thanks to the brand’s popularity, the company could launch any number of products. Instead, Canada Goose protects the brand’s high-end reputation by limiting its product selection. What’s the lesson here? Be selective about the type and quality of branded products you choose to offer customers.
As older products lose sales steam, you can get things moving forward again by launching new and exciting products with a thoroughly researched, smart, and savvy brand extension strategy.