Brand extensions

Team Interbrand

Extending a brand requires an understanding of its core perception and how this, and demand drivers, chime with those of the new segment.

Twenty or so years ago, where your brand sat on the spectrum from value to premium was largely fixed and predictable. In the UK, Marks & Spencer was the middle-class favourite for clothes and Virgin was the plucky challenger, some way apart from the premium territory owned by British Airways.

Today, the picture is far more blurred, as brands have extended upwards and downwards in an attempt to capture market segments on the periphery of their traditional core.

Hence, M&S trying to upscale its clothing offer with designer-led sub-brand ranges and Virgin going for BA's base with its clubhouses and limousine ‘Upper Class’ services. Upstretching is an established tactic to boost the value of a brand, but the practice is not without risk. Often brands extend too far, into inappropriate areas, and dilute the core idea. In the long term, this can lead to erosion of brand value and can even destroy some brands.