Brand Extension - Brand Extension Failure

Brand Extension Failure

Literature related to negative effect of brand extension is limited and the findings are revealed as incongruent. The early works of Aaker and Keller (1990) find no significant evidence that brand name can be diluted by unsuccessful brand extensions. Conversely, Loken and Roedder-John (1993) indicate that dilution effect do occur when the extension across inconsistency of product category and brand beliefs. The failure of extension may come from difficulty of connecting with parent brand, a lack of similarity and familiarity and inconsistent IMC messages.

“Equity of an integrated oriented brand can be diluted significantly from both functional and non-functional attributes-base variables”, which means dilution does occur across the brand extension to the parent brand. These failures of extension make consumers create a negative or new association relate to parent brand even brand family or to disturb and confuse the original brand identity and meaning.

In addition, Martinez and de Chernatony (2004) classify the brand image in two types: the general brand image and the product brand image. They suggest that if the brand name is strong enough as Nike or Sony, the negative impact has no specific damage on general brand image and “the dilution effect is greater on product brand image than on general brand image”. Consequently, consumers may maintain their belief about the attributes and feelings about parent brand, however their study does show that “brand extension dilutes the brand image, changing the beliefs and association in consumers’ mind”.

The flagship product is a money-spinner to a firm. Marketer spends budget and time to create maximum exposure and awareness for the product. Theoretically speaking, flagship product is usually had the top sales and highest awareness in its product category. In spite of Aaker and Keller’s (1990) research which reports that prestigious brands are not harmed from failure of extensions, some evidence shows that the dilution effect has great and instant damage to the flagship product and brand family. Still, some studies suggest that even though overall parent belief is diluted; the flagship product would not be harmed. In addition, brand extension also “diminish consumer’s feelings and beliefs about brand name.” To establish a strong brand, it is necessary to build up a “brand ladder”.

Marketers may follow the order and model created by Aaker and Keller who are authorities on brand management, but branding does not always follow a rational line. One mistake can damage all brand equity. A classic extension failure example would be Coca Cola launching “New Coke” in 1985. Although it was initially accepted, a backlash against “New Coke” soon emerged among consumers. Not only did Coca Cola not succeed in developing a new brand but sales of the original flavour also decreased. Coca Cola had to make considerable efforts to regain customers who had turned to Pepsi cola.

Although there are few works about the failure of extensions, literature still provides sufficient in depth research around this issue. Studies also suggest that brand extension is a risky strategy to increase sales or brand equity. It should consider the damage of parent brand no matter what types of extension are used. Example. BIC Pens tried to produce BIC pantyhose. You can read some more here