Seven Iron Rules Of Brand Extension

Under such a special market environment in China, most Chinese enterprises with insufficient financial resources and weak brand marketing capabilities should pass.

Generally speaking, the more intense the market competition, the more brand names of experts in different industries, the lower the success rate of brand extension, but precisely in developed countries such as Europe and the United States.

Market competition is fierce and cruel, but brand extension is still very popular and has achieved great success.

The US market.

In the past 10 years, 2/3 has become a brand extension rather than a new brand.

Some people say: "brand extension, like Gham Gi Khan swept across Eurasia, swept across the advertising and marketing circles.

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The Chinese market is still in the state of lightweight competition, so the brand extension will have more chances to succeed than the developed countries in Europe and the United States.

Information from the front line of domestic marketing practice also shows that brand extension has a strong vitality in the whole Chinese market.

Haier, Le Baishi, Wahaha, Maxam and step-by-step high have developed rapidly through brand extension and become leaders of the same industry.

Coupled with the poor financial strength of domestic enterprises and the lack of experience in brand management, it is decided that brand extension strategy will be adopted in the process of developing new products.

But brand extension is not only a good thing for a company, but also an abyss of progress.

It is also dangerous for managers to make decisions and operate without scientific and sound brand extension.

To effectively avoid the risk of brand extension and exert the role of brand extension to make the enterprise go up to a new level, we must first make a correct decision on whether or not the brand can be extended and extended to what areas.

The rule of brand extension can be divided into seven parts.

The core value of a common brand is appropriate.

The most common theory of brand extension is "Relevance Theory", that is, products with close proximity and high correlation can share the same brand.

However, the theory of high degree of relevance can extend, and the fact that a product is completely unrelated to share the same brand successfully appears weak.

For example, Marlboro has been very successful in extending from cigarette to jeans, jeans, cap and belt.

In the final analysis, the core value of a brand can accommodate a series of products that are far from the surface.

Luxury products such as Dunhill (Dunhill), Dupont (S.T.Dupont), Valentino (Valentino) and other luxury goods brands usually have suits, shirts, neckties, T-Shirts, leather shoes, leather bags, belts and so on. Some of them even have products with large span and low correlation, such as glasses, watches, lighters, pens, cigarettes and so on, but they can also share a brand.

Although these products differ far from each other in terms of physical properties and original uses, they can provide a common utility, that is, the symbol of identity and the sign of dignitaries, so that people can get a high degree of self-esteem and satisfaction.

The core value of such brands is cultural and symbolic meaning, mainly composed of emotional and self-expression interests, so it can contain products with far different physical attributes and product categories, so long as these products can become carriers of brand culture.

Similarly, Dupont, Valentino and MontBlanc are expensive luxury brands. If they produce a T-shirt, shirts and pens with a unit price of 200~300 yuan (MontBlanc's cheapest pen is no less than 1200 yuan), they will lose their price and grade their brands, and such brand extensions will fail.

The brand with grade, identity and cultural symbol as the main selling point.

Generally it is difficult to be compatible with low-grade products, otherwise it will destroy the core value of the brand.

Before the Second World War, the luxury cars in the US were not Cadillac but Packard.

Packard was once the most prestigious car in the world. It was president Roosevelt's ride.

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However, in the mid 30s of last century, padadley made the clipper medium price model. Although the market was excellent, the king's style disappeared and the noble image ceased to exist.

This is strikingly similar to the failure of park to produce a $3-5 low-end pen.

In the final analysis, it's all new.

The success of Wahaha extension and the failure of Park extension not only prove that core value is the center of brand extension decision, but also once again prove that relevance theory is just a representation.

Because pike only extends from high-end pen to low-end pen, no matter whether high-end or low-grade is still a pen, it is undoubtedly a very high degree of extension. According to the theory of relativity, it should be successful. As a result, pike is a failure, and the correlation between the products extended by Wahaha is lower than that of pike, but the fruit is successful.

As mentioned earlier, the high degree of correlation is just a representation, and the high degree of correlation leads to consumers' recognition and purchase of a brand because of the same or similar reasons.

In addition to the well-known products of the same industry, there are highly correlated expressions: companion products (such as Nestle's coffee and partners, toothbrushes and toothpaste, printers and toners): similar components and common technologies among products; the same target consumer groups (such as Combi love in Japan, good children in the country extend to baby strollers, diapers, children's wear are very successful); the same marketing channels and services (such as various computer consumables).

Personalized and perceptual products are not suitable.

When the quality assurance of a brand is the main reason for consumers and customers to buy products, the brand can extend to this series of products, such as electrical appliances and industrial products, but the products that can be subdivided, personalized, perceptional and delicate are difficult to match.

Other products share the same brand.

South Korea LoHi Venus's LG brand is used for all electrical appliances, mobile phones, monitors, components and even elevators, latex paint, curtain wall glass, while cosmetics are Debon brand.

Because users choose brands such as appliances, mobile phones, latex paints, curtain walls and glass products, the most important thing is to identify the brand's quality.

LG, as an international brand, can undoubtedly give people a sense of steadfast feeling and quality assurance. Cosmetics are highly perceptual and personalized products. Whether the brand name, packaging, design, advertising and cultural connotations can be recognized by consumers is the key to success.

Therefore, cosmetics brand names, packaging, advertising should be feminine, give people soft, romantic feeling and beautiful reverie.

LG has to push a new brand "makeup -DEBON" for cosmetics.

Financial and brand promotion is weak.

Some theorists have pointed out that car companies push many brands to attack the brand extension of some domestic enterprises, such as Cadillac, Buick, Opel and other more than 10 brands.

In fact, this is two different things. First of all, the automobile is a product of great difference. It can clearly subdivide different markets and need multiple personalized product brands to attract different consumers.

At the same time, we can not ignore the high value of cars and support the huge cost of pushing many brands.

Many famous factories in Switzerland push many brands, such as OMEGA and radars belong to the same company, because the value of products is higher.

Therefore, the automobile industry and the name list industry push many brands have their particularity, and in no way can we conclude that the brand extension of other industries is wrong.

P&G has less brand extension. On the one hand, the industry and products are easy to differentiate, and can attract different consumers through different brands with different personalities. On the other hand, P&G has abundant financial resources and strong brand marketing capabilities.

Some articles will be Procter & Gamble and general purpose.

However, the difference between domestic enterprises and them is too great. Most of them should quickly expand themselves through brand extension.

Even if the company, such as general motors, is rich and wealthy, it also feels the hardship of pushing many brands. It begins with the selection of several key brands from dozens of brands, mainly pushing Cadillac, Opel, Chevrolet and Buick.

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The market environment with small capacity is suitable.

The market environment and the market capacity of enterprises will also affect brand decisions and sometimes even play a decisive role.

Taiwan enterprises are the most frequent use of brand extension strategy, and even many industries that should not be extended are poles apart. The same brand is used for various products, which is related to its growing market environment.

In the early days of development, there was a lack of strength to expand the island's market.

Almost all the target markets of Taiwan enterprises are confined to the island.

The market capacity of consumer goods is based on population size, while the island's population base is only about 20000000, and the market capacity of any industry is very limited. Perhaps the turnover is not enough to promote the cost of a brand.

Therefore, more "one brand and multi products" strategy is adopted, such as the unification of Taiwan, the milk powder, soda, tea, beverage, juice and instant noodles of Wei Quan company.

The unified group even extended the unified brand to batteries.

Because the unified battery is rarely recognized by people outside the automobile industry, it will not have adverse effects on the sale of unified instant noodles and beverages.

At the same time, auto industry professionals will naturally think that unification is also a big business. The investment in batteries is not a matter of mere tinkering. It is enough to ensure that people can acquire excellent human resources, advanced technology and sophisticated equipment, so their quality is assured.

Unifi Inc uses unified brand not only to promote batteries at lower cost, but also to speed up acceptance by the industry. Meanwhile, the side effects of the main industry are also very limited.

As Taiwan enterprises expand the mainland market and accelerate the internationalization process.

To adapt

Imitation competitor's brand strategy

Many brand extensions, though new products have been pulled up by strong brands, but

Define the purpose of developing new products

If the purpose of developing new products is only to bring the market promotion power of successful brands into play, free riders will sell a little.

Even if it does not conform to the basic principles of brand extension, it can also be extended.

However, in operation, new products should advertise as little as possible so as not to damage the original personality of the brand.

As mentioned earlier, the uniform food extended to the battery does not conform to the basic principles of brand extension. Fortunately, the battery basically does not publish advertisements in the mass media.

If we publish a large number of advertisements, let every consumer eat noodles and drink iced tea, when they think of batteries, it is hard to swallow.

Similarly, Wahaha's safe cold liquid and wine are inconsistent with Wahaha's personality, but they are all free riding products.

There are few advertising activities, and only a few professionals know that these products are not enough to damage Wahaha's brand image.

Research on market competition pattern

Competition pattern also has great influence on brand extension decision.

The market competition of extended products is not fierce, and there is no strong professional brand, so the brand extension can be daring. Otherwise, it is not appropriate.

For example, the United States has entered the industry such as cooking fume exhauster, gas cooker, water heater and so on, but has rarely been successful in advertising. The main reason is that the brand of gas appliance and cooker industry is smaller than that of the United States. The popularity and prestige of the brand can not be compared with that of the United States.

TCL has successfully extended from the telephone industry to the color TV industry. The main point is that the large screen color TV has not been valued by the leading brands of the color TV industry at that time. When Haier entered the color TV industry, it chose skillfully to choose the best time for the color TV digitalization to lead to the leading edge of the traditional analog TV giant, while the United States chose most of the domestic brands to produce low and medium rice cookers, while the Japanese brand luxury rice cookers were too expensive to enter the rice cooker.