Robust brand extension strategies are vital to maintaining relevance in today’s hyper-competitive marketplace. To a degree, brand extendibility represents the most logical way to achieve profitable brand growth, however, many companies struggle with how far to stretch, where specifically to extend, and how to ensure success. This perhaps explains why the failure rate is as high as 80 to 90 percent. Play it too safe, and the likely result will be boring, short-lived line extensions that underwhelm consumers. Stray too far from your brand’s core positioning, and you risk diluting valuable equity and trust in the parent brand; extended brands should make sense and be a logical step from the flagship product. If not, consumers are left scratching their heads asking, “OMG, what were they thinking?”
Increasing brand proliferation (i.e., too many varieties of the same product) has resulted in recent decisions by several global multi-brand portfolios, including Coca-Cola, SAP, and Hershey, to unify under a master brand or corporate brand strategy. Multi-brand portfolios with multitudes of positioning platforms to manage have made strengthening and maintaining brand equity increasingly complex.
What separates today's most successful brands from the merely average ones? More and more consumers expect brands to have not just functional benefits but a meaningful social purpose. Consequently, companies are taking social stands in very noticeable ways—Airbnb used a Super Bowl ad to seal its commitment to diversity publically. Brands increasingly use social purpose to advise marketing, inform product innovation, and direct investments to social programs.
Brands with Purpose Are More Attractive to Consumers
If you’ve read Simon Sinek’s book “Start With Why” or heard his popular TED Talk, you probably recall one of the most famous quotes: “People don’t buy what you do. They buy why you do it.” People don’t connect to a company’s products or services. They buy into the reasons why these companies exist—the idea that a company exists for something larger than themselves.