On this series of the NerdBrand Podcast, we’re diving into how brands diversify. This episode kicks off with Brand Extensions.
Part One: Brand Extension
What’s A Brand Extension?
A brand extension (sometimes called a category extension) is when a brand uses its established name or an established product line to launch a new product or category.
The idea is of course to leverage the brand reputation and loyalty to catapult the new product.
In other words, the existing brand is a low-cost marketing tool.
Brand extensions are often introduced with the goal of opening a new revenue stream with a complementary product, improving the customer experience, or solidifying a competitive advantage in the market.
Let’s look at some examples we talk about on the episode.
Tesla Tequila: Yes, from space ships, electric cars, to now liquor.
- Sold for $250 a bottle.
- Sold out in three days.
- Looks of the bottle? Opinions? Mitch says aftershave bottle.
Fingernail polish: WUT? No seriously. Launched in the Hong Kong market.
Fire Logs: Yes – this just gets weirder. Make your house smell like KFC when you do not have KFC.
KFC Crocs: Ok, just no. Fried Chicken and feet are not allowed in the same sentence or thought.
- Going from Search to Email? A big win!
- Going from Search to Social? Nah, man. YET THEY KEEP TRYING!
Part Two: Brand Dilution
In this part of our series on how brands diversify, Brand dilution is the result of trying to push too far on an extension, to the point that the original market perception of the brand decays.
This episode, we’re deep diving into the concept of brand dilution.
Brand dilution occurs when brands push a bit too far when introducing a new product or category.
Dilution occurs when the extension unintentionally disrupts the original perception of a brand.
Brand Dilution Examples
DC/WB with Batman
Used too many times, and I think we’re getting fatigue. How many movies, video games, and animation series have we seen in the last 10 years?
- Chasing the success of Christopher Nolan’s trilogy. (I only liked Begins and TDK.)
- Batfleck (he’s back!)
- Casting of new Batman films (not a fan so far)
- Placing Batman in three films
- Animation series produced (I loved the Batman Animated)
- Games – over 40+ video games made!
[In 2019]: “I just think that we might’ve put a little bit too much in the marketplace too fast.”Disney CEO, Bob Iger, told the New York Times
Sony – Playstation
What is Sony known for? Most would answer Playstation or video game consoles.
Sony has a long history of being an electronics company, but since entering the video game market, they’ve transformed their brand. Is this an example of a successful brand extension or a brand dilution?
Other Brands that had success at diversification (brand extension) and failure (brand dilution) that we discuss:
- Amazon Fire Phone
- Harley Davidson Perfume
- Cadbury’s Instant Potatoes
- Crystal Pepsi
- Virgin Water Filtration System
- Dr Pepper BBQ Sauce
- Coca-Cola Clothing
- Windows Phone
Part Three: Brand Evolution
Brand evolution is the practice of making gradual changes in response to customer feedback. This often affects the brand’s creative aesthetic, strategic messaging, position in the marketplace, staffing, and more.
While a brand evolution shares similarities to a rebranding, the two concepts aren’t interchangeable. A rebrand is a significant shift in how your brand looks and presents itself in the marketplace, typically carried out within a precise time-frame.
A brand evolution, on the other hand, is more of an operational mindset. It’s the act of making usability and design sprints on your website, for example. Or introducing new creative into an ongoing campaign.
Think of brand evolution as baby steps aligned with your current position in the market, whereas a rebranding is a giant leap to something new.
How Brands Diversify: Design Evolution
Evolution of a brand’s design involves more than just logos. It extends to product labels and packaging, the website, digital ad creatives, message, or any creative the brand makes shifts in this evolution.
Design evolution also can happen as design trends change. Think about the aesthetic difference between a website in 2001 vs. a website in 2020. Night and day.
Evolution Example: Harley Davidson Electric Bikes
Harley Davidson is a brand that is frequently evolving and trying to gradually reinvent themselves. They’ve seen dips in their market share in recent years, which they chalked up to an aging demographic.
Most recently, they’ve refocused the brand to go in a more aspirational direction, like Ferrari, and brought their attention back to selling big bikes in the US — their largest market.
Why Is Brand Evolution Necessary?
- Brand evolution shows customers you’re growing and interesting. This helps you avoid becoming stale.
- Evolving introduces a new vision. This isn’t to replace your original vision, but to make the previous vision more relevant and fresh.
- Increasing market share or expanding into a new market.
- Sociopolitical and economic changes such as, say…a pandemic.
DC and Warner Bros. have chosen to release all 2021 titles to both the theaters AND HBO Max. Now that’s an evolution.
Sony’s Brand Evolution
- Sony – started in 1946 making tape recorders for the war.
- Transistors in 1954 appeared.
- In 1960, color televisions.
- The walkman, and then video.
A complete list of products that Sony has developed can be found at the links below:
Sony’s corporate identity evolving…
From its introduction, the eye-catching SONY logo was revered within the company. The first version of the logo, which was enclosed in a square box, was registered as a trademark in 1955. Thereafter, the logo went through a succession of changes. In the 1960s, when Sony began to seriously develop its brand image overseas, the logo was displayed in neon in New York and Hong Kong, where it competed with famous and well-established foreign companies. In 1959, the catchphrase “Sony — a worldwide brand born in Japan” was introduced to capitalize on the logo. This was followed by the slogan, “Research Makes the Difference.”Sony’s website
We’ve all owned a Sony product – which ones have you owned?
- 3.5” Floppy disks
- Memory sticks
- Sony Music Entertainment
If you’d like to discuss how you can diversify your brand, or if you’re currently dealing with multiple brands and need a strategy to get them wrangled, contact us.