What makes an ecosystem work is the common purpose the elements in the system hold. Similarly, a robust brand extension strategy is like an ecosystem.
Extending a brand requires thinking through a holistic growth strategy prior to beginning a growth program execution.
A brand extension growth strategy must have a “what” (e.g. what are the opportunities, what are we going to do) and the “how” (e.g. how we will execute the strategy).
|Extending a brand requires thinking through a holistic growth strategy prior to beginning any growth program execution|
The plants, animals and other elements in the ecosystem are like the growth programs that must support the brand purpose. One of the biggest mistakes that a leader makes is to jump into a particular growth program execution without first defining the strategy, e.g. how the “ecosystem” will work. Understanding how growth programs such as licensing, partnerships, new ventures or acquisitions fit within the brand extension strategy is critical. These programs are not the brand extension strategy; they are the way to enable a strategy, e.g. an execution of the brand extension strategy.
There are three primary execution methods to extend a brand: “Make,” “Rent,” Buy.” Common examples are to: start a new division or product line (“Make”), license the brand, license in or partner with companies to execute (“Rent”) or acquire a company or product line (“Buy”). Leaders who begin brand extension without regard to how a program might fit with current or future growth programs may put the brand at risk because some programs might be at odds with others. Programs have to spawn from one well thought out brand extension strategy. It is easier to start by making a brand extension strategy process “execution agnostic”, meaning not to bias the development by focusing too heavily on a particular tool or technique to extend the brand early in the process.
Here is how to conceive a brand extension strategy and execute a program built to last:
1. Ensure the brand has a good core
Define the core brand purpose or promise. This is what it stands for; the reason it will be chosen and by whom over competition. A good strategy leader will allocate resources toward that common purpose and avoid funding for every distraction that moves the brand away from the core purpose. We know we have defined the core purpose of a brand when one word or phrase undeniably describes how the brand wins. Continue to invest in the brand promise and prepare a defense against anyone who tries to take the position established by the brand. A successful brand strategy provides above average margins because it makes a brand unique and the brand commands a premium above the average offering in the marketplace.
Conduct consumer research to understand factors important to consumers and how the brand compares to competition. It takes discipline and commitment to ongoing consumer research. Keep up with key purchase and usage factors, compare brand performance to competition, ensure the brand is positioned in a unique, valuable and sustainable way to win in the marketplace and understand the opportunities and threats.
Start a brand extension program with a strong core. Knowing what the brand stands for today helps guide the choices about a brand extension strategy.
2. Envision the future
Think through to the end, pick a point in the future – 5, 10, 20 years – ahead and create stories about what will be important in the future. This is more than just reading trends; this requires making some predictions about future consumer habits and choices and what their needs will be tomorrow. Start with topics like how information will be consumed, what devices and methods of transportation we will have, types of jobs, etc. Make choices about what products and services the brand offering can and cannot include. Develop the brand extension strategy vis-à-vis the future opportunities determined to consider how well it supports the brand promise (e.g. the core purpose or equity) and how competition fits into those scenarios. There are research techniques that provide support for this decision process to aid in deciding brand fit, market reach, comparison to competition, etc.
3. Decide how to execute
Determine what capabilities or products and services to provide in the future and how to organize to execute. By considering a breadth of opportunities for growth from all Make-Rent-Buy methods, you will avoid growth programs or solutions chosen from a limited set of options or what merely has been seen to work in another company when exploring brand extension. The breadth of thinking will also help match the right execution method to the right opportunity.
Doing the thinking work upfront provides a strategic roadmap for brand extension. A well thought out brand extension strategy makes defining the plan for execution much clearer to ensure licensing, partnership, acquisition and new venture brand extension programs have a significant chance to survive and thrive together with purpose in the brand ecosystem to prepare for success over the next decade.
For more information about our brand extension strategy, research services or execution services in licensing and partnerships contact us at email@example.com +1 513 842 6305.