Marija Ocokoljic

STRETCH MUCH? What is brand extension or brand stretch strategy, what gets stretched and how far can it go? Let’s walk around a supermarket. Have a look at your favorite brands. Chances are that there are dozens of variations of it on the shelf. Flavors, shapes, sizes, combination, occasions to be used in, needs to fulfill. That is brand extension strategy at work, one of the most (miss)used strategies in modern marketing practice. What is a brand extension? It is an option of a brands core product different in one or more aspects. It can be just a different flavor or packaging size. Those are line extensions. The core product is the same, varying in aspects mostly of a physical nature (size, shape, quantity, flavor). Brand extensions change more, stretching the brand further. They open a whole new territory for the brand, going into new categories, new market segments, new target groups therefore opening new sources of profit. When a luxury fashion brand starts making perfumes or makeup it is an extension into a new category, beauty. When it launches a ready wear line it is stretching into a new segment, going from premium to mass or even economy. Coke Zero compared to Coke brings to the table a new benefit (healthier living), different formula so a new product (no sugar) and a new target group (looking healthier options). It innovates the brand on several aspects. To understand how a brand is stretched we need to go back to what a brand is. Much more than a product or service behind it, a brand is a set of values we as consumers recognize, chose to accept as our own. By using it we send out a message that we are a part of that value set, that group of people who ``think different`` or those athletic strong willed empowered people who ``just do it``. That is what gets stretched. As long as we can recognize those values in our brand it does not matter in which shape or size the product comes. If it is a bag, a shoe or lipstick, Chanel is style and that is what we buy. So, when a brand stretches it stretches those values and our perception of them. Our perception of Chanel as a fashion brand gets ``transmitted`` into a perfume or makeup category. Those transitions go smooth when the new territory has a logical emotional connection to the core, like in the example of Chanel. The farther the territory from the core is the more cognitive effort the consumer must invest into connecting the two and making the right fit between them. That is why we believe Chanel lipsticks, but did not really buy into Virgin vodka after a record company and an airline. The stretch went to far. Brand extensions strategy uses differentiated brand values to expand its offer into new options categories, target groups, market segments. Stretches can be closer or further away from the core. The bigger and braver the stretch the higher the risk. And just like in any business strategy, and in life, the key is to find that balance.