You’ve got a good brand. What now?
I’ve been talking to two clients about extending their brands this week. Both have been trading for a while and both have brands that have taken off faster than they expected. One is in the food sector and one in retail clothing. We met them both just as they were starting out and it’s been as exciting for us as for them to see how well the marketplace has taken to the brands we have developed. But now they have a dilemma – should they be satisfied with organic growth or try to turbo-charge their businesses by extending their brands across new products, and into new markets? It may seem like a safe approach to stay with what one knows and to promote existing products into known and proven markets. However, every product goes through a bell curve and, unless you’ve launched the next Kit-Kat, it’s safe to assume that sales will start to decine at some point. It is therefore better in the interests of longer term growth to capitalise on the brand value that one has built up by extending it.
I have advised both clients to undertake some research so that they understand what motivates sales of their brand at the present time. Until these factors are understood, any brand extension could be going off at a tangent based on incorrect assumptions. This research need not be time-consuming or costly. My food client could run a focus group to establish whether people buy his product because it is perceived as a luxury treat or as good for the health, or for a mixture of both reasons. The results that emerge will provide a clear direction for new products and indicate whether the original brand values should be replicated in a new product or a sub-brand created to communicate either the indulgence aspect or the health aspect. The sub-brand route would be recommended if there is any risk of tainting the core brand with conflicting values in the new product.
Similarly with my clothing client. As this is a retail operation, some test marketing can easily be carried out before any investment is made in brand extensions. Fashion is a fickle market but with consumer feedback being so readily available, it is easier to make the right decisions.
Whilst many sectors are suffering at present, we notice that food and clothing brands continue to be buoyant, especially at the premium end of the market. They key word there is “brands”. It is more vital than ever to differentiate by brand at the point of sale when times are hard. If the product looks good it will sell, even if it costs more than the item on the next shelf, or the next webpage.
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Tags: bell curve, brand extension, brand values, brands, core brand, fashion, focus group, food sector, Kit-Kat, luxury treat, new market, retail clothing, webpage
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