Brand extension three no policy

In May of the same year, Konka Group's refrigerator base in Anhui was completed and put into operation. Since then, the Konka brand has added a new member, the refrigerator.

In March this year, Jianlibao's three major tea beverage series were officially launched, targeting young consumers who love online games.

These are classic examples of brand extensions. Broadly speaking, a brand extension is the use of the name of an already successful brand to extend a product line or launch a new product category.

In other words, when it comes to brand extension, there is a basic premise that the original brand has established a good reputation, reputation and customer loyalty, and already has a strong influence among consumers. On this basis, it will be extended in all directions to give full play to the value of the brand.

Brand extension is a strategy that companies often use when launching new products. Correct brand extension can often achieve multiplier effects with half the effort, and even have the effect of bringing back the dead. But in fact, in the process of brand extension, there are also many companies that fail. Don't forget the past, and teach the future. Today, we will analyze the reasons for these failures and provide some suggestions for improvement, which have practical reference significance for enterprises that are in the process of brand extension or are preparing to embark on the road of brand extension. When implementing brand extensions, don't step into the following pitfalls.

Do not seriously deviate from the core value of the brand

The core value of the brand is the brand's personality, interests and impact. The performance of this value may be more specific, such as "leading technology"; it may also be more abstract, such as "sports spirit", "representative of elegant lifestyle". These values are the foundation on which brands build strong relationships with consumers.

If the brand extension deviates from these core values, it will break the bond with consumers, and will not be recognized by consumers, and the purpose of extension will not be achieved. Because a brand is ultimately a consumer-centric concept, its power lies in the mind of the consumer, in the consumer's previous experience and understanding of the brand.

Kevin Lane Keller, a famous American brand expert, pointed out that the reason why a strong brand has a higher value is that it not only has a higher reputation, but more importantly, it has established a strong relationship with consumers. deep relationship. Many companies regard the brand only as the embodiment of their own value, but ignore the relationship between the brand and consumers.

The manifestations of brand extension seriously deviating from the core value are roughly as follows:

First, there is no similarity and correlation. Whether consumers regard the new product as the same as the original brand is the key factor for the success of brand extension. For example, the extension of Wahaha is mainly concentrated in the beverage and food industries, and the extension of TCL is also concentrated in home appliances and electronics. Although studies and facts show that differences between industries or products are not an insurmountable obstacle to brand extension, especially for high-quality brands, even if they are used on products that are not very similar to the original products, consumption The evaluation of extension products is still relatively high. But high-quality brands still run the risk of failure when introducing an extremely dissimilar extension product.

Haier is one example. Haier has a very successful brand extension experience, and the extension from refrigerators to air conditioners and washing machines has been recognized by consumers. But it failed when it entered the pharmaceutical industry. Zhang Ruimin's analysis on this is: Haier made a mistake in extending its brand to the pharmaceutical industry. Consumers only thought that the Haier brand was a home appliance brand, so they could not accept this extension, resulting in failure.

The second is an inappropriate vertical extension. Using the same brand is a high-risk act when entering the upper or lower market. When a brand belongs to the high-end positioning in the minds of consumers, its entry into the low-end market will depreciate the brand value. And if a brand is a low-end product in the minds of consumers, when it tries to enter the high-end market, it will cause consumers to doubt its quality.

This phenomenon is particularly evident in the apparel industry. Senda leather shoes are regarded as a mid-range brand in leather shoes, and when it wants to enter the low-end market, it adopts a new brand to avoid the phenomenon of brand devaluation.

The third is to cause bad associations among consumers. Sometimes, brand extension is in the same industry, but because of its completely different functions, it causes bad associations among consumers. Such extension not only fails to take advantage of the brand, but also easily weakens the reputation that has been established among consumers. A relatively well-known case is the extension from Rongchang Anal Tai to Rongchang Tianmeng Oral Liquid. The extension of the carved brand from washing powder, super soap to toothpaste is also difficult for many consumers to accept, because the association of the former's "powerful decontamination" and toothpaste are obviously in conflict. The extension of Sanjiuweitai to Sanjiu insecticide is also easy to make consumers have negative associations.

The circumvention method extends on the core product. Apply the reputation built on the core product to the new product line. This is the obvious method and generally succeeds. At present, this practice is most common in domestic home appliance companies and food companies. For example, in the extension of the food industry, for the extension products of well-known brands, we at least believe that the hygiene and basic quality are guaranteed.

Research by brand experts David A. Aaker and Kapferer also showed that under the condition that the extension product is similar to the core brand, the effect of brand extension is obvious and the extension is easy to succeed. .

Extends along the value line. Find the value thread of your product or business and follow that thread. Sometimes products that may seem irrelevant are easy to be recognized by consumers as long as the value contained in them is consistent. For example, Bausch & Lomb's extension from glasses to hearing aids, the two seem to be unrelated on the surface, but the core values it conveys to consumers are the same, both are precision designs, so they have achieved success.

Try to avoid vertical extensions. In general, businesses should avoid vertical extensions as much as possible. Going directly to a sub- or higher-level market is a dangerous thing. David Ike believes that launching or acquiring new brands is a good way to move from a low-end market to a high-end market. In addition to launching new brands, companies can also consider repositioning the entire brand, or adopt a sub-brand strategy.

In short, managers must understand the core values of a brand and what the brand's perception is in the minds of consumers. Consumer perception of the brand determines whether the future direction of the brand is appropriate.

Management skills cannot be ignored

Although brand extension can utilize the resources of famous brands, it is not to sleep on the original brand assets. The launch of any new product poses challenges to the company's strategic capabilities, innovation capabilities, marketing management, and cost management of production and storage. If a company's own management is chaotic, then when the result of brand extension is not good, it is probably not that the extension is inappropriate, but that the company does not have the ability to operate the brand extension properly.