Brand Extensions

After listening to Zack Damon give his lecture on branding I became more intrigued in the topics he discussed. One topic I ran across while studying the lecture later on, was the topic of brand extension. We had not gone into much depth talking about brand extension but I was interested in finding out more. When doing a little research on brand extension I found a lot more information, including definitions, different types of brand extension, and some examples of some of the most successful brand extensions and some of the worst.

Brand extension is using a well-known brand name and creating another product line to put on the market.  However I found a better definition of this on brandextension.org. It said that it is using a brand name as a means of leverage and creating a product that is in a different market from the previous product. As I gathered more information I found eight different types of brand extensions. Some of them included creating a similar product to the parent product, giving the new product a distinctive flavor, using certain expertise, companion products, vertical extensions, or using a brand with a designer image to promote a different type of product.  My favorite type is the designer image style. An example of this is the famous clothing brand Tommy Bahama, introducing luxury furniture using the same brand name.  For any type of brand extension to be successful it must have two key elements. These elements are product fit and leverage.  Product fit is what kind of products consumers will accept into the market from a certain brand. Leverage is a little simpler in that it comes with the already well-known brand name. It is what the company does well and what it is known for, also known as a competitive advantage.

With brand extensions there have been some notable bests and worsts. These have come from Time Magazine and have been voted on by consumers. The tenth best product extension was Planters Peanuts finally creating their own peanut butter. Planters Company is currently 108 years old and did not come up with this idea for peanut butter until 2011. What could have taken them so long? Maybe it was due to the fact of the great brands like Peter Pan. The rise in the Nutella hazelnut spread also could have been a factor in the decision to wait on making this peanut butter. The next one is a more difficult brand extension because I find the products to be more unrelated. The number seven best brand extension is considered to be Rolls Royce extending their name. They went from some of the most luxurious cars to building airplane engines. I would consider this to be another example of a designer image type of brand extension. When seeing this I found it a little strange that Rolls Royce would build airplane engines, but if I were in the market I would see these as probably some of the most reliable engines out there. The only downfall for Rolls Royce though is the price at which they might have to charge for their product. If you were Rolls Royce you might have the most reliable airplane engine but it would also be the priciest one. The most intriguing and unrelated product by far is the brand extension of Virgin Records. Virgin Records decided that it would extend its brand name and create Virgin Atlantic Airways, an Airplane company. This seems like a pretty bold move to me, going from records to airplanes to mobile phones. These great risks by Richard Branson have made him one of the richest men in the world.

One of the worst brand extensions has also come from Virgin. After the success of all the other brand extensions, I guess Richard Branson wasn’t quite satisfied, so he created the Virgin water purifier. I don’t understand how Virgin comes up with all these different products and thinks they will be profitable. In the case of the airplane and mobile phone service they proved me wrong, but not in the case of the water purifier. I guess it is all about high risk and high reward.  Another one of the worst brand extensions was from Paula Deen.  After cooking for many years Paula Deen decided to extend her brand creating kids furniture.  The furniture ranged from 550 to 1500 dollars. I do not like this brand extension mainly because of the price. I would not want to spend 550 t0 1500 dollars on furniture just because it has Paula Deens name on it. Many people, including myself wouldn’t buy her products anyway after she was kicked off the air for using racial slurs. Some other notable bad brand extensions include Zippo lighters creating a men and women’s fragrance, Snooki coming out with tanning lotion, and Eva Longoria opening a steakhouse for women.

With all brand extensions there is a great amount of risk as well as reward. After examining all the best and worst extensions, I think the best way in going about brand extension is to produce products that are similar to or have a link to products you have created in the past. You should also keep in mind the two factors of success product fit and leverage as this will help you create a successful product. Lastly do a SWOT analysis and create products based on the strengths and opportunities you have.

Super Bowl Segmentation

With the Super Bowl being such a one-sided affair, it was the perfect game for examining the commercials. I enjoyed many more of the commercials this year than I have in the past. The sponsors of the game, as well as many other companies, did a great job of appealing to a target market.

You may disagree with me about this and say that everyone watches the Super bowl, but I think otherwise. Even though the commercials are great, people who are not football fans are not going to watch the games. There is evidence of this when you look further into what commercials were played and what the intent was of each commercial. When examining the commercials further I found that many companies definitely used marketing segmentation to reach a specific target market. Marketing segmentation is dividing the total market into different groups with similar product needs. This is done so that you can design a marketing mix and reach a specific target market. The groups of people targeted were obviously football fans, but also men and the older generations. When saying older generations, I am talking about the age group from 21 to 55. You cannot really pinpoint a certain age by just watching, but we know they were focusing on older people instead of younger.

While watching, I wrote down every commercial I could and what it advertised. In doing so I found that approximately 100% of the commercials were something that people aged 21 to 55 would buy. There were not any commercials seeking to catch the attention of children to buy toys or to watch there shows. The only thing I could see smaller children wanting to buy is maybe a Butterfingers candy bar. Everything else was obviously geared toward older people because these are the people who actually watch the game. For the segment I named football fans, I calculated that only about 36% of the commercials focused directly on football fans. When saying directly related to football fans I took into account something you may eat or drink while attending a game, or watching it from home. The 36% also included the network you may watch the game on, like NFL Network. Commercials that I labeled as geared toward football fans were also interesting because they were the ones that either used seductive women or cute animals to attract consumers to their products.  Approximately 50% of all the commercials were focused directly at men. This number included mainly things such as truck commercials, beer commercials, and movie commercials that men would be interested in. I thought Chevrolet did the best job at designing a commercial to sell their truck to the people watching.  Men obviously make up the majority of people watching the game. One survey from CNS news said that 67% of people watching the Super Bowl are men. So for Chevrolet, why not present their truck as tough and dependable? It is apparent that their truck is tough and dependable because they use a tough cowboy hauling around cattle to portray this image. This is a classic example of how Chevrolet has advertised their trucks.

I guess most of the information above we could call primary data since I collected it by myself. The target markets used by the companies to market their products were the right ones to use due to the fact that these are the people that watch the game. It was kind of interesting to discover that only 36% of commercials were geared directly toward football fans. This is the biggest game of the year for all football fans yet only 36% of the ads are directly related to them. If you just look at this number it seems kind of odd, but when looking at all the numbers it becomes easier to understand. Even though men and football fans are two separate segments, many aspects of the segments are very similar. Many men are also going to be football fans. Even though the advertisers did not advertise directly to football fans they did in fact advertise heavily to men. This makes sense when we say that 67% of people watching are men. For the other 33% of people watching, most would be under the first marketing segment of people ages 21 to 55. The marketing segments were brilliantly set up by most of the sponsors and other companies, reaching out to all the different people watching, to buy their products. For me this Super Bowl had the best commercials by far. All the commercials were fun, innovative and they made their products seem attractive to the eye. Without the great quality of advertisements the Super Bowl may not have had any viewers.