Wednesday, December 20, 2006

Lesson: Launch a Second Brand

Will Laura Ries ever stop blogging about brand extension? I hope not. As often as she blogs about it (to the exclusion of just about any other topic), the tendency of companies to pollute their brands with extensions isn't going to stop any time soon.

In her latest entry, she gives several examples of brand extension failures. She starts by setting her sights on the new eBay Express extension, and she links to a Wall Street Journal article noting that it "isn't selling well". Then she moves on to Volvo convertibles and others.

She concludes with a constructive suggestion:
A better strategy is to launch a second brand. As Toyota did with Lexus. As Sony did the PlayStation. As Apple did with iPod. As MTV did with VH1.

A second brand allows a company to expand while still protecting the integrity of its core brand.
If you're an executive considering changing your focus to expand into new markets, consider the liabilities of brand extension and the possibility of launching a new brand instead.

No comments :