One of my favorite desserts is red velvet cake. I cannot give a particular reason, but along with cheesecake and pecan pie it is one dessert that if it is available I am likely to partake. However, two recent experiences with red velvet cake have left an unexpected impression, one that reminded me of a danger with brand extensions.
First, during a visit to a Sonic restaurant I saw a sign for a Red Velvet Cake Sonic Blast. The combination of red velvet cake with ice cream was a thought I could not shake without trying one. Unfortunately, between the product’s look, texture, and taste, my excitement was wiped out quickly. Second, on a visit to a local doughnut shop, the server suggested a red velvet cake doughnut. I was delighted! Why hadn’t I thought to look for this before? Well, after eating the doughnut I realized why it had not been brought to my attention before now: a red velvet cake doughnut does not compare very favorably to the core product. In both instances, the conclusion I reached was that I have the urge to try these products out of my system and can move on.
What do my experiences with red velvet cake have to do with brand extensions? They are reminders that a product has limits on how far it can be extended from the core product. A brand develops associations and reputation for how it delivers value. Introducing new products under the same brand creates expectations among consumers that the new brands will deliver value in a similar manner. An article by marketing expert Al Ries shares an example of the perils of brand extension. He uses unsuccessful brand extensions of Little Caesars in the 1990s of delivery and expanded menus to make a point that extensions can take a brand’s focus away from what it does best. In the case of Little Caesars, its core strength was offering carry-out pizza at a low price.
The fallout from overextending a brand is that consumers may become less confident in the brand’s capability to deliver value. Business experts have cautioned against overextending for years. Whether it is called “stick to your knitting” or Jim Collins’ call for a company to focus on the one thing at which it can be great, managing brand extensions is crucial to keeping the core brand’s meaning and value proposition intact.
As for my disappointing experiences with red velvet cake extensions, I realized that they had a surprising effect on me: I feel less enthused about having red velvet cake when an opportunity presents itself. I am likely to opt for one of my other favorite desserts. A brand that dilutes its equity by extending to products that are not as strong as the core product risks a similar fate. It can create a double whammy of negative perceptions of the extension as well as unfavorable associations with the core brand. So much for growing a brand!
Labels: Brand Management