Brand Extension Examples

Published by Colin Finkle on

Good examples of brand extensions can put a company in a better strategic position. Bad brand extensions are just ugly.

A brand extension is when a brand is known for one type of product starts selling a different type of product.

Some brand extension examples are:

  • Apple: from personal computers into MP3 players.
  • Callaway: from golf clubs into footwear, apparel and golf accessories.
  • Ferrari: from exotic sports cars to theme parks.
  • Google: from search and extended into a hosted email service.
  • Fender from guitars and amps into earbuds.
  • Cosmopolitan: from magazines into yogurt.
  • Snoop Dogg: from rap into a smoke-able book.

We elaborate on all of these examples below.


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Brand extension examples. Apple. iPod to iPhone. Cool. Callaway: Golf clubs to umbrellas? Questionable.

Brand extensions should be towards adjacent product categories. For example, Apple started by making personal computers (Mac), and then jumped into personal audio (iPod) and then jumped again into smartphones (iPhone). Those were all good moves because now 62.21% of Apple’s sales come from iPhone.

But sometimes the products from brand extensions stray pretty far from the original product category the brand is known for. Callaway started by making premium golf clubs, but now they make umbrellas, watches, towels, etc. These are all products are for golfers but have entirely different engineering and construction methods than golf clubs. It’s a bit of a stretch.

Brand extensions can be beneficial.

A well thought brand extension can increase brand awareness and reduce costs.

The benefits of brand extensions can be increasing brand awareness, and lowering total marketing spend per unit.

Brand extensions are a popular marketing strategy because the marketing costs of creating brand awareness can be spread over multiple product lines. Instead of building a brand from scratch, established brands can leverage their brand awareness in one product category to gain a foothold in a new product category. This strategic advantage is part of the reason I recommend tracking and investing in brand equity through brand marketing.

Costs drop once both categories have been established. Once both product lines are selling, both benefit from spending on activities to build brand awareness, such as sponsorship, short video ads, and influencer shout-outs. The costs can be divided between all the product lines under the brand.

For example, Proctor & Gamble’s costs associated with Gillette.com, sponsoring Gillette Stadium, and their recent viral video campaign are spread over all of Gillette’s product lines: razors, shaving creams, soaps, skin care items, and deodorants.

But sometimes brand extensions bite back.

The big risk: overextension.

To understand the difference between a good brand extension and a bad one, you need to understand
Brand Dilution

Brush up with our Definition of Brand Dilution

The risk from brand extensions is that the brand and company can become overextended. Brand extensions do not eliminate the competition; in fact, the company is now competing on multiple fronts with twice the competitors. This is costly and capital intensive.

Brand dilution is also a problem. Brand marketers, particularly with luxury brands, should use brand extension cautiously in order to avoid diluting the core brand. For example, luxury brands often put their logo on unrelated types of products and confuse what the core brand really means. Low quality merchandise in the new product lines can reflect poorly on the quality of the original product.

For example, Diane von Furstenberg built her brand on an innovative wrap dress, and then extended her brand into beauty products, fragrances, luggage, eyewear, jeans, and books. The extensions killed the sales of the core brand because people didn’t know what the Diane von Furstenberg brand meant if they made crap like luggage.


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Not a pivot or a line extension.

A full brand pivot, or extending an existing line with a new product are NOT brand extension.

Note that a brand extension is not a pivot. A brand pivot is when a company, typically a startup, completely gives up making a type of product to compete in another category.

A line extension is when a brand introduces a new product in the same category. For example, Crayola starts making a new color of marker or Mercedes makes a wagon version of their C-Class car line.

A brand extension is the when a moves into a new product category while still competing in their original category.

Ferrari
Exotic Cars to Theme Parks

Original product category:
Exotic cars

The front of a Ferrari 488 GTB in red.

Exotic car products:
Ferrari 488, Ferrari 812 Superfast, Ferrari Portofino

Destination product category:
Theme parks

Ferrari roller coaster at Ferrari land

Theme park products:
Ferrari Land (Spain), Ferrari World (Abu Dhabi)

History. Ferrari is an Italian company that has been producing sports cars since 1947. Ferrari’s co-missions of producing expensive, exotic, high-performance sports cars as well as dominating racing (particularly Formula 1) has created a brand synonymous with speed, excitement, luxury, and engineering excellence. Their consistent use of a specific shade of red (Rosso Corsa / racing red) has made their brand instantly recognizable.

Taking a page out of Disney’s playbook, Ferrari has started putting its name on theme parks. In 2010, Ferrari World was opened on Yas Island in Abu Dhabi in the United Arab Emirates with the claiming to have the fastest roller coaster in the world: Formula Rossa. In 2017, Ferrari land was opened as an extension of the Spanish entertainment resort PortAventura World. Ferrari Land is home to Red Force, the tallest and fastest roller coaster in Europe.

My take. I don’t see a problem with this brand extension, even if it is far from the original category. It maintains and leverages all of the Ferrari brand associations: speed, excitement, luxury, and engineering excellence. The tactic of opening both parks with record-shattering roller coasters correctly builds the Ferrari brand.

Ferrari is also a fantasy for most of its fans. It reminds me of Disney in that sense; their movies takes us all on an adventure in a fantasy world. Maybe that fantasy is the secret ingredient to make for a fun theme park.


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Google
Search Engine to Email

Original product category:
Search engine

Woman typing a search into Google onto a laptop

Search engine:
Google.com

Destination product category:
Web based email

man typing into a laptop working on Gmail

Email product:
Google Mail, Gmail

History. Google launched their search engine in 1998 to early internet users who were eager to access the entire web. At the time, Yahoo and Lycos were navigating people through lists of links and poorly ranked search pages. No one could truly search the internet.

Email was different. It was never the intention founders of Google, Larry Page or Sergey Brin, to launch an email service. The Google team worked on it as a secret project, and it famously first ran on a handful of Pentium III computers that no one wanted.

When nearly the entire company was using Google Mail as their email client, the executives wondered if this was something worth sharing with the world. They introduced it slowly by restricting signups through invitations and growing peoples server disk space over time. Gmail was a beta release for years, signalling to users that is wasn’t fully developed. Launching it was a risk; many people forget the leap of faith Gmail was for Google.

My take. Gmail has been a good thing for Google. It was their foray into creating free services for people in exchange for personal information to target ads. Google makes the vast majority of their money from ads appearing next to search results, and only Gmail (and subsequent web apps) have been the only activities that have significantly contributed to the revenue of Alphabet, Google’s parent company.

Google is an example in this article is because they has used brand extensions more eagerly than any other company. Gmail, GDocs, Google Chat, Android, Made by Google, Google+, and many many more all try to leverage the Google name to find the next big revenue source.

Google restructured to be Alphabet in 2015 so they can get into product categories like medical devices, longevity, and space exploration without the Google name. Some product categories just don’t make sense for brand extension, and Alphabet knows that.


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Snoop Dogg
Rap to Smokable Book

Original product category:
Rap music

Snoop Dogg on stage

Rap albums:
Doggystyle, The Doggfather, Bible of Love

Destination product category:
Book made of rolling papers

Snoop Dogg Rolling Papers smokable songbook

Smokable book product:
Snoop Dogg “Rolling Words: A Smokable Song Book”

History. Calvin Cordozar Broadus Jr., better known as Snoop Dogg, has been a songwriter, music producer, and actor but he is known for his rap. Along with Eminem, he was one of the first to be produced by Dr. Dre, founder of Beats by Dre. The three rappers were thrust into the mainstream in the mid-90s when rap went from the inner city to the suburbs and beyond. Right place, right people, right time.

Snoop has never hidden his love for marijuana, and smoking was the topic and feature of many of his songs. Weed connected him to a lot of fans who loved the counter culture movement of smoking the then illegal drug.

In 2012, Snoop Dogg released Rolling Words: A Smokable Songbook. It was the idea of the advertising firm Pereira O’Dell as a promotional activity. It is not on the market anymore but does sell as a collector’s item for $50 to $150. People loved it, and further connected Snoop to his core fans.

My take. This is an excellent example of how a brand extension needs to consider the tribe of followers of the brand more than the adjacency of the product category. A smokable book has nothing to do with music, but everything to do with Snoop’s people, message and brand associations.

What distant product would connect your brand to your tribe? Take a page out of Snoop’s book and smoke it (pun intended).


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Fender
Guitars to Earbuds

Original product category:
Electric guitars

Fender bass close up shot.

Guitar products:
Stratocaster, Telecaster, Jazzmaster, Jaguar, Mustang

Destination product category:
Headphones

Fender Puresonic Bluetooth Earbuds in recording studio.

Headphone products:
PureSonic™ Wired Earbuds, PureSonic™ Wireless Earbuds

History. Fender was started in the Californian sunshine of 1938 by Leo Fender. He was an electronics technician and saw flaws in how the sound waves from electric instruments were captured and amplified. He introduced a lap steel guitar and amp with innovative pickups and electronics in 1945, but the brand didn’t take off until he designed a more conventional guitar with the electronics.

Fender introduced its first headphone, the Fender Pro In-Ear Monitors, in 2016. This was their first consumer electronics product; this was a long-term strategic move from Fender executives. They acquired Aurisonics a year previous to design top quality products in-house. Now they offer the Puresonic line of earbuds in both wired and wireless format.

My take. I am impressed with the way Fender went into this market
strategically. I am sure personal audio companies have approached Fender to put their logo on white label headphones. Fender must have turned them down to save their respected brand name for a product that would be up to their high standards.

Great audio and great electronics are in Fender’s brand DNA. This is a great brand extension assuming the earbuds have great audio quality.

I’d buy them, except earbuds never fit my ears quite right; I’ll take over ear headphones every time. Does anyone else have this problem?

Cosmopolitan
Magazine to Yogurt

Original product category:
Magazines

Magazine products:
Cosmopolitan, Cosmo Girl

Destination product category:
Single Serving Yogurt

Cosmopolitan Yoghurt single serve

Yogurt product:
Cosmo Yogurts

History. We had to end on a funny one.

What is there to say? Cosmopolitan has been a very long-running magazine (starting in 1886!) and has grown a readership of women looking to improve their lives.

Cosmo tried to leverage their connection with young adult women, and launched quite a few products in the 90s. Yogurt was one of those products.

The yogurt launched in 1999. This wasn’t even a license play; they opened a new division called Cosmo Yogurts. The executives were very committed to this questionable strategy.

My take. Maybe a Cosmopolitan executive in 1999 was visited by the ghost-of-Christmas-future, because predicted the massive decline in revenue and profit the publishing industry would soon face. Print was crushed when digital media went mainstream.

Their readership of the magazine had the same demographics as yogurt eaters: young adult women. It seemed like a good strategy on paper… doesn’t it?

But why does Snoop Dogg’s Rolling Words work and Cosmopolitan Yogurt fail? Aren’t they both are just selling to an audience they already have an established relationship with?

Up Next
To understand whether a brand extension is good or bad, you need to understand
Brand Dilution

Read Our Definition of Brand Dilution

The answer is brand associations and credibility. Snoop Dogg’s brand associations play right into a book you can smoke, and his fans would trust him to make sure it’s awesome.

The things that people associate with the Cosmopolitan brand (self-improvement, gossip, sex tips, beauty, etc.) do not apply at all to yogurt. What makes Cosmo good at media does not make them good at yogurt. They have no credibility in that space.

But thanks for trying out.


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Colin Finkle

Colin Finkle is a brand marketer and designer with ten years of experience helping Fortune 500 companies tell their story at retail. You can see his work at finkle.ca

6 Comments

Ralph Beach · September 29, 2018 at 7:52 am

Great information. Thank you.

Thomas Schlagla · November 8, 2018 at 6:36 am

Good article

Bunmi Adeleye · January 16, 2019 at 2:38 pm

I had to laugh at the Cosmopolitan yoghurt too. Seriously? They’d have stood a better chance if they’d gone into sex toys or perhaps an anonymous, online radio show maybe. I call dibs on the suggestions for Cosmopolitan in case it blows. Lol! Thanks for the write-up Colin.

    Colin Finkle · January 30, 2019 at 11:33 am

    Thanks Bunmi! Yeah… the yogurt is ridiculous. As if a magazine has any credibility in food products.

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