Identifying potential extensions

It goes without saying that before making any brand extension it is imperative to know the brand well. What are its attributes? What is its personality? What identity does it convey to its buyers and users? What are its latent associations or traits? The answers to these questions are based on both quantitative studies (to discover the popularity and the image of the brand) and qualitative interviews of the target public. A simple listing of the image characteristics does not give a full picture of the brand. Defining the prism of identity requires qualitative investigation.

Armed with this information, the second step of the investigation procedure involves the extrapolation of the brand’s distinctive features in order to assess their consequences. If Dove is personified by gentleness, then what other products need to be gentle? If Christofle is a brand for knives, forks and spoons, could it, by metonymy, be extended to glasses, plates or other tableware in general? Since Rossignol is active in one area of sport (skiing), could it not also extend into tennis rackets and golf clubs?

Luxury product brands often find the reason and the inspiration for their extensions from within their own history. Thus René Lalique, founder of Lalique, made jewels, scarves and shawls. The extension of Baccarat into small items of furniture, jewellery, perfumes and lamps is also symbolic of the reconquest of unexploited areas.

Whatever the source, a long list emerges from this process of introspection and investigation into brand identity and extrapolations based on it. It is then subject to internal feasibility filters. Brand extension is a strategic choice that is also accompanied by other changes: in production, know-how, distribution channels, communication, corporate culture. These have to be financed either internally or by forming alliances. Thus, Boucheron sold 22 per cent of its shares, not those of its core business (high-fashion jewellery), but those of the company that managed the socalled ‘first circle’ extensions (jewellery, watches, spectacle frames, pens and perfumes) in order to increase its resources.

This shortlist is then tested with the target public. Opinion surveys are often used to achieve this. For every extension proposition consumers evaluate the product on a scale of interest to them such as ‘very interesting, soso, not interesting’. This leads to a popularity rating of the possible extensions.

This method is advantageous in that it is simple and that the grading is done by numbers. Its one drawback is that it is conservative. When a series of questions about a multitude of products are thrown at them, interviewees tend to comment only on the basis of the most striking features of the brand. Therefore, this technique is biased and conservative. Thus, when Bic was only making ballpoint pens, this strategy would have ended up by exhausting all the possibilities in stationery and completely rejecting the idea that Bic should sell razors.

Davidson (1987) distinguishes a number of concentric zones around an inner core: the outer core, the extension zones, and finally the no-go areas (see Figure below). Close-ended questions in surveys provide information on the immediate vicinity of the brand (the outer core). In-depth qualitative phrases explore the remote extension zones.

Perimeters of brand extension

Once again, it is necessary to proceed with a qualitative investigation to bring out the latent potential of a brand and to see how it can or cannot adopt each of these extensions. Through this same investigation we can also tell whether the resulting refusals were due to a conservative attitude linked to the actual situation, a lack of imagination on the part of the interviewee, or due to incompatibility with the brand.

The qualitative phase is a constructive one. Bearing in mind that a brand has to bring some added value to the product category, one would also like to know under what conditions the envisaged product would be legitimate for the brand. What attributes – objective and subjective – would be necessary for it to be able to bear the brand name? How is the product superior to the present market offer?

Thus, it is not enough to say that Lacoste could make jackets. One also has to describe what the characteristics of a Lacoste jacket would be and those of a ‘non-Lacoste’ jacket. The Lacoste identity prism encompasses the following characteristics: knit, finish, durability, discretion, harmony, social aptness, conformity and adaptability. The reputation of the original Lacoste product is that of a second skin: it induces a distancing effect which constitutes the central value of the brand. It nurtures an image of supple transitionbetween the personal and social – personal ease and social ease. The aerated knit is analogous to the skin and its pores. This identity prism defines the territories which are not Lacoste and which should be avoided for fear of losing the very meaning of the brand:

  • since it conforms to a sporting ideal, Lacoste is transversal and cuts across all barriers of age and sex, thus it should not put its name to products which are exclusively feminine (in fact, the Lacoste aerobic line was a big failure), or hyper-masculine (eg hunting);
  • Lacoste does not sell either garish colours or short-lived ‘in’ products;
  • being a ‘second skin’, Lacoste does not make either heavy knitwear or shiny leather clothes.

One understands why there are no Lacoste leather jackets. They are very masculine, virile and fashionable, and they do not last. Only the suede jacket is capable of possessing Lacoste characteristics.

The qualitative stage also permits an understanding of the functions of the brand for its users. Is the brand a sign for itself or for others? Where would consumers like to see the brand signed? This information is essential for branding. On the pocket of a Lacoste blazer should the signature be Lacoste, the crocodile or Lacoste Club?

Fundamentally, the testing phase should not only find out whether the success factors of the extension category are coherent with the brand, but also whether the product is superior to its competitors when deprived of its brand. In spite of the many explications about image failure, many extensions fail simply because they are inferior to existing products and are more expensive. Above all, an extension is an innovation and its added value should be considered. Finally, these projection techniques allow the tricky question of the boomerang effects on the brand capital to be dealt with.

Strategic Brand Management Related Practice Tests

Strategic Management Practice Tests
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