What's up brand builder Stephen Houraghan here at BrandMasterAcademy.com and in this video
you're going to learn what brand extension is and how to leverage it so you can use the
reputation of the brand that you're building to expand and grow across multiple categories
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now a brand can be and has been defined as many different things now some things i agree with
other things i don't but one philosophy i certainly subscribe to is that your brand is
your reputation and the reputation of your brand is exactly the asset that the brand extension
strategy aims to leverage so what exactly is brand extension strategy well it's a strategy used
by established brands who have taken the time to develop their brand and establish a reputation in
the market and develop brand equity to push into other categories where they don't have that same
reputation so essentially what they try to do is leverage the reputation within the market that
they do have to expand and push into new markets and establish themselves there now one of the most
famous examples of a brand extension strategy one of the most successful examples as well would be
nike now nike established its reputation as a running shoe company first as blue ribbon phil
knight was the founder of blue ribbon which later turned into nike and nike was famous for running
shoes that's how they established their reputation but they used that reputation to push into
different categories to push into different sports from swimming to golf and now today they're across
about 30 major categories sports categories and lifestyle categories so they've used the brand
equity and the reputation of the nike brand to push and expand into all of these other categories
so why use a brand extension strategy well ultimately it's about the opportunity to
grow and expand the brand so there needs to be an opportunity in another category and there needs
to also be the possibility that the brand will be adopted within that category now the brand
may or may not not have any kind of experience within that category that it's expanding into
but the more experience and the more relevance it has expanding into that category the more
chance that it has of being adopted within that category and being adopted by its own audience and
the audience of that category itself so why and when should a brand extension strategy be used
well ultimately it's about opportunity it's about the opportunity for the brand to expand and grow
and it does that by crossing lines and pushing into a new category now first of all there has to
be an opportunity to push into that category there has to be a demand for the product or service that
it's going to develop to push across into that category the second thing that has to be there
for the why and when would you use a brand extension strategy is it has to have the chance
of being adopted yes it will have a reputation in the marketplace for the name it has established
for itself but whether or not that translates and transfers into the new category really depends on
who the audience is what they're looking for and whether or not they value the reputation that the
brand has already established within its own category so there are a few different conditions
there but if there is a chance that the audience will reject the brand for pushing into that new
category and extending into that new marketplace then it can potentially damage the brand so what
are the advantages of a successful brand extension strategy well the advantages are endless it really
is blue sky here and all you have to do is look at nike and how nike has effectively used a brand
extension strategy if you're able to push into a new category that can create a new audience and
it can lead to other extensions for the brand as well and all of this can lead to increased brand
awareness increased reputation and equity and of course increased market share but there are many
risks to the brand extension strategy as well and many brands have fallen flat here there are many
examples of brands who have tried an extension strategy and it has fallen flat and one of the
main risks is damaging the original reputation of the brand the original brand equity that it
had and damaging that relationship that it has with its audience if a brand attempts to expand
into a new category it's essentially telling its audience we thought you wanted this and you didn't
so we don't really understand who you are and what you really want from us so there are long lasting
damages that can happen from a failed extension strategy so they do need to be considered now as
i said there are many examples of failed brand extension strategies and one of those examples
is cosmopolitan magazine now cosmopolitan magazine back in the late 90s began to extend different
lines they extended into the fashion industry and that was relatively adopted but when they extended
into the food industry through the cosmopolitan yogurt that was a step too far it was okay for
some of the readers to wear cosmic cosmopolitan fashion or sunglasses or clothes but when it came
to eating a cosmopolitan product that was a step too far now the brand extension strategy can and
has worked for many different brands but as with anything in branding it's all about understanding
your audience it's all about understanding who they are what they want and more specifically what
they want from your brand and what role you play in their lives so if you're considering a brand
extension strategy very strongly consider who your audience is consider what they want and consider
whether or not they will accept you playing a specific role within their lives if you don't know
ask but make sure you get that confirmation before you go all in because if you get it wrong it could
lead to a broken relationship with your audience and lost brand equity what you should be doing
is growing brand equity if you want to know what brand equity is and how to grow it then this video
will help you out until next time brand like a master and i'll see you in the next video you