By Peter L. Getman, Principal Brand Director

It’s common knowledge that when a brand extension strategy is not sound, it can drastically weaken your brand’s equity when it’s overexploited. “New Coke” and the new Red Bull Cola come to mind as “Classic” cases. Pun intended.

So when does it make sense anyhow?

WHEN the same product formula is dispensed or packaged in different sizes for the purpose of ease of use. Today, I changed the Arm & Hammer® deodorizer “stick-on puck” because it told me it was time to do so (versus the open box of baking soda). Then quickly made a sandwich, squeezed Miracle Whip on one slice of bread and a couple slices of KRAFT American Singles® from the family pack size on the other and snagged a GoGurt® on my way out the door. Earlier, I noticed my 4-year old son pumping Crest® toothpaste on his toothbrush. Later, I drank a 16oz Red Bull, started zinging and quickly realized this brand extension was aimed at a younger demographic. Yet, still all logical extensions—taking the original product formula and dispensing it in sizes that target and appeal to new market demographic — or, taking the original formula and dispensing it in an “easier to use” applicator.

WHEN the new innovation leverages the existing brand difference, and by extending the brand it further demonstrates your commitment and leadership in this overarching category. Heinz® owns the Tomato Ketchup market and launched mustard and relish eons ago, but just this weekend, I enjoyed Heinz Hot Relish on my hot dog. The World’s strongest Gorilla Glue leveraged its known equity to create the World’s strongest tape. 3M’s duct tape brand managers need to get unstuck, and quickly.

WHEN extending the brand positions it for consumption/adoption by appealing to a new customer with the existing market. Although I valued finding the brand with the “Kills germs that cause bad breath®” promise, I never used Listerine {original flavor}—until they launched the Cool Mint.

WHEN you can cost effectively leverage your current Internet marketing and marketing communications investments to promote and educate your new brand extension. How many times have you seen advertising that says, “Now available in _________.”? In my experience it costs 3 times more to launch a new brand versus launching a new brand extension.

WHEN you have negotiation muscle with your existing distribution channel—or this channel is already excited about the sell-through performance of the current brand. In both scenarios, the channel is more apt to “create” shelf space and allocate to your new brand extension.

In sum, when the brand extension is strategically positioned, targeting a new consumer preference and driven by the “Big 3″:

• The product’s technology
• The original formula
• An arena of domain expertise

… then the odds for a successful consumer adoption are greater than launching a new brand.

Now, what if …

… your brand extension strategy is leveraging a philosophical belief system that delivers a specific emotional benefit? “You’re In Good Hands With Allstate®” comes to mind. In these cases, the brand extension strategy is not as clear-cut, simply because marketing’s philosophical manifestation of this belief is often different than that of the product development team. Which probably differs from the CEO’s vision. Which is certainly not what the sales team sells. Your brand team must lead your internal teams to collectively determine the attributes, personality, purpose and soul-extended meaning as well as long-term vision, potential and ultimate value of the next brand extension.

A recent example of a philosophical brand extension is by Holley Performance Products. Since the beginning of automobile production, they’ve been producing high performance automotive products, mostly engine modification technologies, including a carburetor for Henry Ford’s Model T. Today, one of the company’s popular brands is Nitrous Oxide Systems (NOS), which gives a high performance boost in a muscle car’s horsepower.

It is also the inspiration for a successful brand extension. This NOS brand is well known by young males throughout the US for delivering a high performance boost in horsepower. In fact, Holley licensed their BRAND and assets to Fuze Beverage® company and they launched NOS Energy Drink. A logical brand extension since this widely known core benefit [a high performance boost] is leveraged into the energy drink’s brand position and is valued by the primary consumer of energy drinks in America … by young males. I imagine they launched this drink at a major NASCAR event as well via sponsorship and street teams.

Kudos to Fuze for affiliating with a high performance brand in a different, unrelated industry and knowing they needed to launch an entirely new brand to enter the energy drink market category as opposed to extending their Fuze brand. I suspect Fuze Beverage® company went to Holley to pitch this brand extension strategy and licensing agreement as opposed to vice-versa.

I’m sure they were handsomely rewarded for this decision. In 2007, NOS Energy Drink® and Fuze Beverage® company was acquired by Coca-Cola®.

I love this brand extension and execution — it is lucrative and sensible. Nicely done. Considering leveraging a brand extension? Consider a brand extension specialist.