Brand extension is a way of expanding the business for many large companies. Through brand extension, companies use their current brand image to extend the depth or breadth of the product offering to the customers.
A brand is much more than a symbol, name, logo or colours. A brand represents a promise to the consumers. A promise of what they can expect by consuming the product. It conveys important information to the customers with regard to the perceived benefit of the product or service offered (Sattayawaksakul et al. 2016).
However, the brands also have a value beyond the benefit of the product or service offered. Brand names immediately evoke associated attributes of the products or services offered under that brand name. An example is Toyota; no matter which Toyota vehicle you are talking about, whether it is a small or medium car, SUV, 4WD or passenger transport vehicle, it always reminds us that it is a reliable and durable vehicle. This kind of brand image is a precious asset for the marketers as the consumer holds a preconceived image of any product offered under that brand name.
Understanding their brand value coupled with a careful SWOT analysis on the organisation will help the marketers to increase their value through brand extension. Positive brand image and brand association can be easily leveraged with relatively low risk to expand the overall business through brand extension.
In addition to the advantage associated with the brand image and brand association, established supply chain, infrastructure and capital make brand extension easier and profitable.
So why do the big brands still get it wrong? It is not as simple or easy as it sounds. Just look at Coke Life for an example. Coca Cola has been one of the most successful companies in the world and their marketing strategies have been second to none. So did they get Coke Life correct?
As the developed world is becoming more health conscious, sugary caffeine drinks like Coca Cola are facing an imminent reduction in the demand. Further, sugary soft drinks suppliers are facing increasing regulatory and public pressure to reduce the sugar content in their soft drinks. According to Mitchel (2015), Australian soft drink suppliers are compelled to offer “less sugary” alternatives to retain the increasingly health conscious customers.
Coke Life is a “mid calorie” option of Coca Cola intended to target the health conscious consumer segment but the fans don’t like the taste of it and hence the product didn’t take off. I believe Coca Cola got it wrong in this instance.
To analyse the reason for failure with this brand extension, let’s look at the success factors for brand extensions. Research suggest that perceived similarity between parent brand and the extended brand is an important factor in successful brand extensions (Afsal, 2013). The unique “Taste” of Coke is strongly attached to the Coke brand image. People buying carbonated soft drinks either go for the full calorie version with optimum taste or zero calorie product with compromised taste (Jannings 2014). Coca Cola has already established the Coke zero and Coke Diet as zero calorie options in the market so why would consumers go for a “mid calorie range” product with a different taste? When the main attribute of your product’s success is compromised, you are moving away from the fit with the parent brand. Coke zero and Coke Diet took off but Coca Cola Life didn’t because of the difference in taste.
Companies have to be careful with brand extension not to lose the fit with the parent brand. Coke Life didn’t really fit with Coca Cola’s “enjoy” slogan.
Afsal S, 2013, Factors Influencing Successful Brand Extensions into Related and Unrelated Product Categories, Asian Economic and Social Society, Retrieved 24 April 2016, <http://www.aessweb.com/pdf-files/216-226.pdf>
Daily Mail Australia, 2013, ‘Even Beyonce can’t help: Americans keep turning away from soda as companies report another quarter of decreasing sales’, Daily Mail Australia, Retrieved 24 April 2016, <http://www.dailymail.co.uk/news/article-2377071/Soda-companies-report-quarter-decreasing-sales.html>
Jennings K, ‘Here’s Why Coke Life And Pepsi NEXT Will Never Take Off In The US’, Business Insider Australia, Retrieved 24 April 2016, <http://www.businessinsider.com.au/coke-life-and-pepsi-next-wont-work-2014-8>
Mitchell S, 2015, ‘Coca-Cola, Pepsi under pressure as millenials ditch sugar’, The Sydney Morning Herald, Retrieved 25, April 2016,
Sattayawaksakul D et al, 2016, ‘Brand Extension: The Assessment of Perceived Brand Extension Fit in the Education Context’ Academia, Retrieved 23 April 2016, <http://www.academia.edu/9499939/Brand_Extension_The_Assessment_of_Perceived_Brand_Extension_Fit_in_the_Education_Context>