6 Examples Of Brand Extension Failures And Successes
A brand extension occurs when a company uses its established brand to introduce a new product category, leveraging its reputation and customer base to a new market, with great potential to go right. But also, there is just as much potential for brand extension to go wrong – not only for the new brand but the existing brand’s reputation and products.
But how does this happen? In this article, Real Business will go over several examples of brand extension successes and failures, including insight into why and how they went wrong.
Table of Contents
Three Successful Brand Extensions
The following are three successful brand extension examples, as well as the brand extension strategy that worked for them.
1. Apple Extension Into Wearable Tech
Apple launched the Apple Watch in April 2015, marking its first major product category expansion since the iPad in 2010.
Apple developed the Apple Watch as a multi-functional and highly customisable device, serving as both a fashion accessory and a tracker for your fitness and health. It was meant to be a lifestyle product with a broad appeal and incorporated features for communication and seamless integration with other Apple devices.
It became one of the most successful brand extensions seen in economics today:
- Sales Performance: By 2019, Apple Watch sales had outpaced the entire Swiss watch industry in volume.
- Customer Adoption: The Apple Watch resonated strongly with Apple’s existing customer base, quickly achieving high adoption rates, especially among iPhone users.
- Market Dominance: By 2020, Apple held over 50% of the global smartwatch market share, far ahead of competitors.
The brand extension strategy was a major part of the success. The parent brand had a huge loyal customer base, paired with a brand image of being masters of tech, proven by the integration and overall feeling of an Apple ecosystem. Furthermore, by ensuring that the watch was mainly for fitness and health alongside being a status symbol, they were able to target a niche in the market that still had much potential.
2. Dove’s Brand Extension Into Men’s Care
Dove is primarily female-focused in its core brand, but in 2010, the Dove Men+Care brand extension was initiated to tap into the male skincare and hygiene market.
The launch was part of the broader industry trend of personal care slowly opening up to men. The established brand saw the opportunity and pounced on it, offering a product category that specifically was designed for men, focusing on hydration and skin health while keeping the same brand feel of being soft, gentle and moisturising.
It gained quick traction in the market:
- Sales Growth – Within a few years of launch, Dove Men+Care became one of the fastest-growing segments in Dove’s portfolio. The line extension helped Dove become a key player in the men’s personal care market.
- Positive Brand Reception – The line resonated well with male consumers, in part due to Dove’s straightforward, practical approach to men’s care.
- Market Penetration – Dove Men+Care achieved significant market penetration, capturing a notable share of the men’s personal care segment.
The brand extension strategies that worked for Dove included keeping the brand consistency of being soft and gentle on skin, but tough on dirt. It also managed to differentiate itself from other brands, which emphasised hyper-masculinity over gentler, more caring roles.
3. Tesla Energy Solutions
Tesla expanded its focus in 2015 toward energy solutions over their core brand of electric cars. This move was part of Tesla’s mission to clean its brand, promoting sustainable energy in a world afflicted with climate change. The Powerwall allowed the string of energy generated from solar panels or the grid, adding versatility to the use and preservation of green, environmentally friendly energy.
Tesla’s entry into the energy sector saw significant growth in its energy storage deployments due to an effective brand extension strategy:
- Leveraging Existing Brand Equity – Tesla utilised its established reputation for innovation and sustainability to introduce energy products that align with its brand values.
- Integration with Existing Products – The Powerwall and Solar Roof are designed to integrate seamlessly with Tesla’s electric vehicles and energy ecosystem.
- Commitment to Sustainability – By expanding into energy solutions, Tesla reinforced its commitment to reducing reliance on fossil fuels and promoting renewable energy sources.
3 Unsuccessful Brand Extensions
The following three brand extensions failed, despite having great brand loyalty.
1. Cosmopolitan yogurt
Cosmopolitan, published in 36 languages and distributed in more than 100 countries made the incredulous link between their readership and dairy products. Apparently, a Cosmo study in 1999 highlighted that 65 per cent of Brits used edible products in the bedroom. This is what prompted them to launch a product line of yoghurts in 1999, packaged at a premium price and positioned as a luxury item.
It failed, horribly, for the following reasons:
- High price point – The price point was simply too high, more expensive than competing yoghurts.
- Confusing brand messaging – The connection between the lifestyle magazine and a yoghurt line was strange, and made little sense.
- Lack of relevance – Although the study may have convinced the company that yoghurts and their magazine was a good connection, this link was missing with its audience.
This brand extension strategy was a failure due to the complete lack of proper marketing.
2. Colgate Kitchen Entrees
Colgate, which is known for its toothpaste, once launched a line of frozen ready meals named “Colgate Kitchen Entrees” in the 1980s. The idea was that after eating the meal, you would then go on to brush your teeth, creating an eating and hygiene experience revolving around the company.
There were two problems with this:
- Consumer disgust – Colgate is associated, rightly, with toothpaste. So when a prospective customer sees food labelled with Colgate, they associate the acidic taste and slight burning sensation that comes with toothpaste.
- Product launch failure – The previous sentiment transcended the initial market tests, as it failed immediately. It never expanded beyond the US and didn’t last long.
The marketing strategy failed due to Colgate failing to demonstrate the link that the company had made between food and health. The strong brand image that Colgate had created around toothpaste was so strong that it was a barrier that needed to be tackled, and it simply wasn’t.
3. Harley Davidson Cake Decorating Kit
The Harley Davidson cake decorating kit was launched in the early 2000s, allowing fans to decorate cakes with Harley-themed icing and decorations. As an established brand name associated with motorcycles with heavy masculine themes, it was certainly a strange choice, and it inspired immediate backlash.
- Consumer rejection – The core customer base of Harley Davidson was known to be loyal to the freedom and ruggedness that the company valued. The cake kit didn’t align with the iconic image and seemed like an unnecessary intrusion.
- Criticism – Branding experts found that it was labelled the worst brand extension in history, viewed as a misaligned product line that was so bad it was to be immediately forgotten about.
Conclusion
Overall, the messaging is a major key that makes or breaks brand extensions. Ensure that if you’re considering one, you align it with a story that ensures comprehension and relevance. Otherwise, you may find yourself seeing what happens when you put a disastrous marketing strategy into play.
The Harley Davidson fan is by no means your average customer. They are loyal beyond belief and follow a set of ‘freedom and macho’ associated values. So whoever thought that Davidson perfume disappointed the fans, clearly didn’t hear about the cake decorating kit.
Licensed by Bakery Crafts, the icing kit was too ‘Disney-fied’, according to a survey done by branding experts Tipping Sprung. It was immediately voted the worst brand extension when it was launched.
Be careful if you’re considering a brand extension for your business, and take note of what worked for the success stories, and what didn’t for the failures.
