The true test of a brand's growth potential beyond its core product is its capacity to extend into new geographical markets, new product categories or new customer segments. The path of brand extensions however is littered with ill-conceived entry to inappropriate territory.
To ensure the success of a brand extension, managers need to be conscious of the brand"s ability to stretch into related or unrelated markets. Virginís foray into a myriad of brand extensions has not always been the success that the Virgin halo seems to suggest. The extensions that have been successful such as the Airlines business (including Virgin Atlantic and Virgin Blue) have not strayed too far from the core values.
Successful brand extensions require three dimensions - market opportunity, brand relevance and organisational capability. It is the latter that is often overlooked when brand stretch fails.
For more information on brand extension please contact us.
Founder of Ogilvy & Mather