Evaluate the Viability of Brand Extensions

TWICE reports online that Sears Holdings wants to license the Kenmore, Craftsman, and Diehard brand names to manufacturers as part of the company’s financial recovery plan. Flashlight and battery maker Dorcy has already signed on to use Diehard for some of their products.
     When deciding whether to include such brand names in your store’s limited shelf space, you’re walking into the well-worn consumer psychology research area of brand extensions. A general finding is that the extension should fit with the image of the brand personality. Nike probably would do better with treadmills than with cosmetics.
     It appears that Sears won’t place limits on how the brand names are used, so there might be instances of poor fit which you wouldn’t want to include. In their look at the issue of poor fit, researchers at Rutgers University, California State University-Long Beach, and Ohio State University uncovered the existence of Kodak pianos and Buick aspirin as misappropriated brand names.
     Findings from Georgetown University and Chile’s Universidad Adolfo Ibañez indicate you should look at how well-known the brand names of the competition are. They give the fictitious example of Sony binoculars. With this product line, the prototype brands are Tasco and Bushnell, but those two brand names are much less well-known than the Sony name. Therefore, Sony might succeed here. However, if Sony decided to introduce a line of scanners, they’d be going up against prototype brands like HP and Epson, which are very well-known. Sony’s potential for success would not be as good.
     With a questionable-fit brand extension, evaluate both the amount and the nature of advertising support.
     Researchers at Purdue University, Indiana University, and University of Connecticut find that comparative advertising is particularly powerful. But what comparison type is used makes a difference: With the disinfectant wipe product category as an example, for follow-on entrants, such as those from Lysol and Mr. Clean, the comparison should be made to the pioneer product—in this case, Clorox disinfectant wipes—rather than to the parent brand—Lysol cleanser, for instance.
     For a pioneer entrant, comparison advertising is still great, but at introduction, the comparison should be made not to other ways of accomplishing the same function—in this case, disinfecting surfaces—but rather to the existing products that carry that brand name—Clorox bleach, for instance. The objective with the pioneer entrant is to show a favorable comparison to parent brand items.

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Display Unfamiliar Brands with Prototype Brands
Compare Unknown Brand Extensions