There are many logical reasons to line extend or stretch a brand. There could be an opportunity in a business domain close to your core business. In this case, extending the current brand into the new business area is often preferred over building a new brand, especially when budgets are tight. Perhaps the current core business is declining, and in order to survive, new business areas must be entered. Often the thinking is to save the brand in order to save the company.
Therefore, at some point most companies will think about stretching their brands. The assumption is that consumers can make the stretch too and will follow the brand into new areas, purchasing more along the way.
"Consumers love our brand, so they will love our brand in the new product category too". To prove this thinking, a healthy dose of consumer research is then conducted. And guess what? The consumers usually see an option for the brand to stretch! All good, so you think…
Unfortunately that is often not the case. In research situations, consumers are not actually buying the line-extended products. Rather, they are getting compensated to participate in the research. In reality, consumers do not always understand the extension and actually grab their wallets to make a purchase.
To find out if consumers will follow you and buy your brand in a new category, I suggest that you first try the "Line Extension Flip". This test is a simple rule of thumb, and you don't need any consumer research to do it. You just need a clear, open mind and lots of common sense.
First, think of your brand extended into the new target category. Then, imagine a brand already in the target category trying to extend into your current category. Finally, ask yourself, "Does this make sense?".
I’ll try it with some examples:
Your current brand and category: Angry Birds mobile game
Your brand extended to the new category: Angry Birds children’s book
An established brand in the new category: Pip and Posy children’s book
That brand extended to your current category: Pip and Posy mobile game
Does it make sense? Yes!
Current: Angry Birds mobile game
Extension: Angry Birds HDMI connector
Current: BlueRigger HDMI connector
Extension: BlueRigger mobile game
Does it make sense? No!
Current: Fazer Blue chocolate bar
Extension: Fazer Blue chocolate drink
Current: Oatly chocolate drink
Extension: Oatly chocolate bar
Does it make sense? Yes! (Cannot wait!)
Current: SOL cleaning services
Extension: SOL security services
Current: Securitas security services
Extension: Securitas cleaning services
Does it make sense? No!
There are a couple of things to keep in mind before you start "Flipping". First, only flip product brands. Remember, consumers buy products, not companies.
Secondly, if the brand you want to extend is the current category leader, then it will have strong associations to that category in the consumer’s mind, and therefore you will find it is less likely to make the stretch. On the other hand, if your brand has no strong associations with anything in particular or has association with many things, it is more likely to be extendable.
Finally, always Flip brands in the context of today’s market situation. Don't use the Flip test to post-rationalise past decisions.
Now, try the Line Extension Flip test on your brand extension idea.
Michiel Maandag is the founder of Monday brand advisory.