Extendability

Abstract

For a strong brand, extendability is how you reap the real benefits of your investment. A meaningfully different brand can extend to new usage occasions, product categories, and geographies without every step of the process needing to be mapped out from first principles. Adaptation will no doubt be necessary, but knowing that what the brand stands for already resonates in one category will make that adaptation easier. Brand extension should not be limited to product lines and geographies. Licensing is an attractive option for companies that aim to boost revenues with little immediate risk. Some brands—like Virgin, Disney, and Ikea—possess the strength to compete effectively in widely differing categories with little functional similarity. For others, in situations in which strong brands have become lost inside a bigger conglomerate, spinoffs may offer the best way to create increased value.