It starts with an idea
s t a g e s
Best Practices in Brand Extension:
Effective Application of Brand Recognition
BRAND EQUITY CAN BE DIVIDED INTO THREE COMPONENTS: EXPERTISE, EMOTIONAL ATTACHMENTS AND PRODUCT ATTRIBUTES
Brand extensions are an effective and popular method of gaining a competitive advantage when entering a new product area. Consumers are faced with an increasingly complex and confusing marketplace. The ability of a brand to act as a mental shortcut for consumers, thereby simplifying the decision-making process, makes it one of, it not the, most important asset for a company. The ability of a brand to influence consumer behavior, and its ...view middle of the document...
The component of equity we are calling “expertise” refers to a level of experience, knowledge or skills on the part of the brand’s producers. A brand that has equity in the expertise component has products and services that reflect this expertise. Consumers believe that the producers possess a certain “know-how” that is not easily duplicated. Brands with strong expertise equity often stress the scientific research, historical experience or training that went into the development and making of their products. Consumers will value the brand because they value the science behind the products. The component of equity we are calling “emotional attachments” refers to the brand’s ability to fulfill an emotional need. Purchasing the product imparts a particular feeling to the consumer. Products will usually have another component of equity in addition to this one, however, a brand’s emotional attachment can be an extremely powerful form of equity.
©2000 Stages of Innovation
It starts with an idea
s t a g e s
The component of equity we are calling “product attributes” refers to a particular aspect of the product that is deemed to be central to consumers’ needs. It is a promise to produce a “good” product, where “good” can be defined as having or not having a certain quality. A brand with this component of equity, exclusively, is best able to extend only into areas where this particular quality is the major factor by which products in the area are judged. A brand’s equity is the combination, or portfolio, of these components. Because consumers perceive brands as a single whole, all components of a brand’s equity play a role in determining that perception and the framework within which any extension will be evaluated. Broken down by component, the value of a brand is its promise to have a certain quality, to generate a certain feeling, or to be a product of a certain body of knowledge. When considering an extension, three issues need to be raised: Does the new product offer the same promise as the core brand? Is this promise relevant to the new product area? What is the effect of the extension on the brand? The first question refers to whether or not the extension has a good fit with the core brand and its overall product area, the distinguishing qualities, and how it is marketed. The second question addresses whether or not the extension is actually helped by its association with the core brand. Will the core brand’s promise be of value to consumers in this particular product category? The last question refers to possible negative effects on the core brand’s equity. A brand’s equity is never static, and all products under that brand affect how consumers perceive it. Even an extension that is appropriate to the brand’s dominant component can have a negative effect. If Timberland were to produce boots for the military, that could support the brand’s product attributes of ruggedness but could also hurt the brand’s emotional...