Extending the brand (also known as brand elasticity)

Extending the brand (also known as brand elasticity)

Kapferer (1998) states that 'extending the range is a necessary step in the evolution of a brand through time'. This is where additional products are, over time, added to the original brand to serve various markets. The elasticity comes from the view that the brand can be stretched over several products without harming the original branded product.

Kapferer (1998) indicates that there are several approaches to extending the brand - specifically line, range and brand extensions. While it is clearly relevant to the understanding of brands, this nomenclature can be confusing. This is most likely why many marketing texts tend to subsume the three components into 'brand extensions' (see Groucuttetfl/. 2004).

Table 7.2 explains the relevance of the different categories. However, as you can see, some of the 'ingredients' are more subtle than blatant. Aaker (1991) suggests that effective extension strategies have the following core characteristics:

o The original brand has strong positive associations that reinforce consumer expectations. These reduce the level of communication required to establish the extension and help in the differentiation of the brand.

o There is already a highly perceived (and real) value associated with the original brand name.

o The original brand is well known and thus recognised within its relevant market place.

Kapferer (1998) suggests that brand extensions have become increasingly important strategically. He concludes that companies can employ exten­sions as a tactic to defend the brand against attack from current and potential competitors. Kapferer (1998) suggests that many companies that have remained in their original market and not consid­ered extensions risk seeing their position eroded.

The Kit Kat mini case is an illustration of a line extension strategy. As you can see, for some 60 years there was no change to the brand. However,one can speculate that increasing competition in the 1990s forced Nestle to rethink its brand strategy for Kit Kat, prompting the various line extensions. A very good example of a company that has developed numerous brand extensions is the UK-based Virgin group of companies under the control of Sir Richard Branson. The extensions to the Virgin name are listed overleaf.

Godzilla®

In 1954 the monster Godzilla® (known as Godzilla in Japan) came to life on Japanese cinema screens. It is unlikely that anyone at the time thought this first movie would spawn more than 30 movies in a long-running series that would gain cult status, gaining more than 100 million fans in Japan alone. Significantly it has become part of Japanese culture.

In 1954 the low-budget move Godzilla: King of the Monsters introduced the dinosaur-like creature to the world. Mutated as a result of the Bikini Atoll tests in the South Pacific, Godzilla goes on the ram­page through several movies, fighting foes like King Kong. In the majority of cases Godzilla is represent­ed not by state-of-the arts visual effects but by a man in a green suit. State-of-the-art visual effects were paramount with the 1998 release of a US$ 120 million Hollywood-made version. This, however, was to prove a box-office failure. Perhaps the streamlin­ing removed the edge that had been so prevalent with the lower-tech Godzilla movies?

What is clear is the emotion that the Japanese hold out for this creature. In 2002 a Godziila® exhi­bition opened at Tokyo's Taro Okamoto Museum of Art. It portrayed the monster, not as a trivial char­acter, but as a Japanese cultural phenomenon of the 20th century. With in days of opening over 1000 peo­ple per day were visiting the exhibition, such is the iconic value of the Godzilla® brand.

In 2004 the final Japanese-produced Godzilla movie was released, ending a 50-year series of 28 movies. The Final Wars features ten monsters from previous Godzilla movies who go on the rampage in New York, Shanghai, Sydney and Paris.

Although these movies may not have received a universal theatrical release, they have none the less achieved cult status in their home country. Clearly Godzilla® has achieved cult status as a 20th centu­ry (and perhaps 21st century) Japanese brand icon. Sources: 'Godzilla shelved over sub tragedy', BBC News Online, 20 February 2001;'Japanese flock to "highbrow" Godzilla', BBC News Online, 7 June 2002; 'Final battle looms for Godzilla', BBC News, 3 March 2004; 'Godzilla rises for the final time', BBC News Online, 29 November 2004;'Godzilla's 50 years of film terror', BBC News Online, 29 November 2004.

Harley-Davidson®

In 2003 Harley-Davidson® celebrated its anniversary as a motorcycle manufacturer. In 1903 the 21-year-old William S. Harley and the 20-year-old'i Arthur Davidson produced their first Harley-Davison motorcycle - a racer. This was the beginning of legend that would see the company swing from major success to near failure and closure. Yet through mergers, buyouts and fierce Japanese and European competition the Harley-Davidson® motorcycle has become a brand icon.

The iconic image for Harley-Davidson® is not recent phenomena. We can perhaps trace back burgeoning image to the 1940s. When the United States entered the Second World War, the production of domestic motorcycles was suspended in favour off military production. By 1945 Harley-Davidson® produced some 90000 bikes for military use. It is interesting that many young American experienced their first feel of a Harley® while in military service, an-| experience they would remember on their return to$ life. This experience created a demand for Harleys® after the war, and one the company immediately geared up to meet.

Equally, magazines and movies enticed an increasing­ly international audience towards Harley-Davidson® Motorcycles. In 1956 a rising young rock star - Elvis Presley - posed on a Harley® for Enthusiast magazine. 'However, it was arguably the image of Marion Brando as Johnny in the 1953 movie classic The Wild One that ^cemented the relationship between motorcycles and the young. While it was supposedly a social commoner, very loosely based on a true story, the movie became more of a voice for a younger generation who $ad not yet found their own voice. Although the Brando character was to a large extent an anti-hero, this image became a visual statement for a generation of Motorcyclists.

Harley-Davidson® began selling what was to 'emerge as the classic black leather motorcycle jacket in 1947.This was some six years before Brando made it a accessory. However, merchandising took on a whole new meaning in the early 1980s with the formation of the Harley Owners Group, affectionately know as HOG®, This soon became the largest factory-sponsored motorcycle club in the world. Harley-Davidson® created the Owners Group in response to riders who wanted' an organized way to share their passion and show their pride'. By 2003 international membership exceeded 800000, with 1157 local chapters.

Although Harley-Davidson® actually produces fewer motorcycles per year than its major rivals; it has created an emotional attachment to the motor­cycle. It is this emotion or experience that links the rider to the bike. As is stated in Chapter 16 on psy­chology, emotion and experiences are important influences on our lives and indeed our lifestyles. For Harley-Davidson® riders, the bike is not purely a means of transportation; it is part of which they are their lifestyle and perhaps their view of life itself. It is this emotional attachment to the Harley® experi­ence that has created a sustainable brand icon. Source: Hariey-Davidson.com.

Type of extension	Description
Line extensions	This can be described as adding a line of complementary products to the original brand. For example, Unilever's Dove soap brand has been extended to include shampoo, foam bath and shower gels.The Mini case 7.6 on Kit Kat illustrates how Nestle has extended that brand.
Range extensions	A range of products that carry the original brand's name are associated with the single 'promise' created by that brand and focus on the same area of competence or capability. For example, Heinz is seen as one of the world's leading food producers.
Brand extensions	Kapferer (1998) suggests that this is an attempt to diversify the brand towards different product categories and different target audiences. While there may be an attempt to extend the brand in different product categories, the target audience may actually include the same customers as well as new ones. The reason is that the original brand's customers are still buying into the brand's inherent values. This can be seen in mini case 7.7, which examines how fashion designers have moved into the hotel business.

Kit Kat chocolate bar

The Kit Kat brand was originally launched in the⁶* United Kingdom in 1935 as Rowntree's Chocolate Crisp. It was rebranded in 1935 as Kit Kat Chocolate Crisp (later becoming known as simply 'Kit Kat'). Although there is much debate regarding the origin of the name 'Kit Kat', it is suggested that it is linked to the literary club of 17th and 18th-century London.²

For some 60 years the Kit Kat brand remained a single product. However, as a result of increasing competition within the confectionery market Nestle introduced various line extensions, some of which were sold for a limited period only.

By the 1990s Kit Kat had become the UK's best-selling confectionery brand with, according to Nestle, 47 being consumed every second in the United Kingdom alone. In 2000 sales reached some UK£260 million. However sales dipped to UK£I 16 million in 2003. There are several possible reasons, from the weather to the drive towards healthier life styles.

In 1999 Nestle introduced Kit Kat Chunky, a sin­gle giant finger version of the traditional multi-pack of Kit Kat. Over 200 million Kit Kat Chunky bars were sold in its launch year alone.

In the late 20th century and early 21st century Nestle launched several additional line extensions, some of which have been more successful than oth­ers.These included:

o white chocolate

o orange flavoured

o Kit Kat Cubes (small cubes of Kit Kat rather than in the form of a finger biscuit)

o lemon cheesecake Kit Kat, which is sold in Germany and Japan

o curry-flavoured Kit Kat for the UK marketplace.

The introduction of these line extensions has been intended to curb felling revenues within a highly competitive marketplace by keeping the brand prominent in the mind of the consumer. Source: www.nestle.com

Virgin describes itself as the 'third most recognized brand in Britain', claiming that it is now-becoming the first global brand name of the 2lst century. We are involved in planes, trains finance, soft drinks, music, mobile phones, holi­days, cars, wines, publishing, bridal wear - the lot! What ties all these businesses together are the values of our brand and the attitude of our people.

(www.virgin.com)

This is a list of businesses (as of January 2004) that use the Virgin brand name:

Virgin Atlantic Virgin Balloon Flights Virgin Blue Virgin Brides Virgin Cars Virgin Credit Card Virgin Drinks Virgin Express Virgin Home Virgin Limousines Virgin Mobile Virgin Pulse Virgin Trains Virgin Ware Virgin.com Virginstudent.com

Virgin Active

Virgin Air Cargo

Virgin Bikes

Virgin Books

Virgin Business Solutions

Virgin Cosmetics

Virgin D3

Virgin Experience

Virgin Holidays

Virgin Limobike

Virgin Megastores

Virgin Money

Virgin Radio

Virgin Travelstore

Virgin Wines

Virgin.net

Virgin Vacations

As you can see, there is an extremely wide selection of businesses. In addition there are businesses that do not carry the Virgin branding. These include:

o Blue Holidays - innovative package holidays

o Limited Edition - exclusive hotels Necker Island - Branson's own private island in the British Virgin Islands, which can be hired Pacific Blue - daily airline service between

o Australia and New Zealand Radio Free Virgin - digital radio service Roof Gardens - a venue in Kensington, London which includes the Babylon restaurant thetrainline - online booking service for UK rail

o networks Ulusaba - Branson's private game reserve in South AfricaV2 Music - an independent record label.

Another example of brand extensions as described by Kapferer (1998) can be seen in how major iconic fashion brands have diversified into the travel busi­ness. Mini case 7.7 illustrates how some of these fashion brands have extended their valuable brand name into the hotel business.

Another example of brand extension is the French ballpoint pen manufacturer BIC. Mini case 7.8 outlines both the successes and the failures of the company as it extended its global brand name.

However, companies need to be aware that there are risks associated with extending their brands. These include:

o Attaining a critical point where the value of the original brand is severely diluted because of the number of extensions. It could be argued that the French fashion house brand Pierre Cardin has been over-extended through the sheer volume of licences that have been granted to manufacture products under the brand name. According to Czinkota et al. (1998), the label granted 800 licences in 93 countries to create and manufacture a range of items from clothing, luggage and watches to toiletries and pens.

o A problem associated with one product within the extended brand range can possibly tarnish the image of the other products: for example, where one product is the subject of a product recall. Customers may be wary of purchasing other products within that brand range for fear there might also be problems with them. This could be an issue of perception rather that actu­ality. Nevertheless a perceived problem can be as damaging as a real one.

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