“Many big-name companies have had both successes and failures with brand extensions. And the No. 1 reason why some brand extensions fail is simple: they don’t bring enough meaningful value to the consumer.”

comments on Dominique Turpin ( Dean of IMD)  posting

 

Roberto Abramovich‘s insight:

Often commented topic and still so core and difficult to implement.

My take is that it sounds obvious only for those who are outside commenting on past events, like this author. Nothing is obvious when steering a brand towards new horizons.

 

Often the decision is measured in terms of risk (when is low, the decision is pretty fast). sometimes purely commercial since moving to another category would directly impact the top line sales without cannibalising existing business (particularly important in FMCG).

 

But having said that, there is a point not to be overlooked, which is a consumer centric decision (agreeing with the author) is the only path to success. Indeed if the company follow consumer value perceptions (which can be inferred before or during launch with good research) it will find the right levers to increase the value perception and hence gain preference.

(Image: credit to Michael Aldridge commenting on Colgate trying to develop business in Food)

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