How is a Rolex sippy cup perceived as a brand extension?

It is the rare company nowadays that hasn’t developed brand extension product lines. For example, Harley likely sells as much in clothing and similar merchandise as it does in motorcycles. John Deere has a line of toy tractors that mimics their full-size products. Starbucks sells branded packaged coffee, as well as mugs and travel accessories. The list could go on and on.

For these companies, the brand extensions remained consistent in terms of company image. Harley creates clothes that are meant to be worn while riding a motorcycle and embody the same quality, toughness, and rugged style as their bikes. John Deere agricultural toys are high-quality, working scale models of their full-size equivalents. Starbucks’ packaged coffee is the same quality as is served in the stores; the packaging as well as the blends offered mirrors the upscale image of the chain.

As Fu, Ding, and Qu (2009) discovered, these companies understood the fundamental rule of brand extensions as perceived by customers: “image consistency is considered a far more important criterion than functional similarity in evaluating extensions.” If consumers feel that the extensions match both the quality and overall image of the parent brand, they are more likely to embrace the extensions.

However, if the brand extension doesn’t fit both of those criteria, i.e. Rolex developing a gold-plated sippy cup (high quality, low image match) or a silver-plated bracelet (lower quality, lower image match), consumers are apt to reject the extensions.

Fu et al. (2009) also researched the relationship between current brand owners and their acceptance of extension products, in particular luxury brand owners. They found that “brand owners tend to have more favorable attitudes toward the parent brand”, which then appeared to influence their attitude towards the brand extensions.

From a marketer’s perspective, there seems to be two core lessons:

  • Only create brand extensions that mirror the perceived quality levels and brand image levels of the parent brand.
  • Messaging to existing product owners should play off that favorable attitude towards the parent brand when explaining the product extensions.

References:

Fu, G., Ding, J., Qu. R. (2009). “Ownership effects in consumer’s brand extension evaluations.” Brand Management. 16 (4) pp. 221-233.

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