Issues to consider when stretching your brand
It is common for brands to stretch into new categories. However, identifying the most appropriate categories can be a complex area. The issue at the heart of the matter is the double ended question: Will the brand benefit the parent, and can the parent benefit the variant?
Strong business basics is one key requirement; can the product be produced and distributed in a cost-effective means? Economies of scale are difficult to achieve, particularly when relatively small variants are being considered. For example, one brand saw an opportunity to produce razors, a completely new category for it. However, while the concept appealed to consumers, the price tag put on the product was too high for the brand to achieve sufficient sales.
Consumers will allow brands to move more easily into new categories where there is a functional fit between the brand's existing offer and the needs of the new category. Gillette successfully moved into male grooming products some years ago because its experience with one aspect of grooming — shaving — gave it credentials in other areas of male grooming, such as moisturizers and deodorants. Consumers can readily appreciate this. For instance, in one U.S. study, the most appropriate stretch was seen to be AT&T making mobile phones, while one of the least appropriate stretches was Dell making liquor. Extremes highlight the potential problems: Johnnie Walker automobiles and Kentucky Fried Chicken skincare were both considered completely inappropriate!