Why Brand Extensions (Sometimes) Fail

Brand Extension 9 minutes reading
Words: Oliver Dyer. Illustration: Midjourney
Toothpaste lasagne
TLDR: There are three reasons that your brand extension plan will fail. A lack of understanding about your own IP and WHY people love it. A lack of understanding about your market. Poor execution. ""


Embrace and Extend

For most Brand Extensions to flourish there are a lot of stars that need to align. Going all the way back to basics, the business case for brand extension needs to be first. It could be revenue driven, marketing driven or community driven or a combo but the IP owners need to be clear up front about the ‘why’ to extend. Then the DNA of the IP needs to be fully understood so that judgements can be made about how to extend, what the extensions will be and why the fan base will love them. Next, the market needs to be understood. What is the competitive space like? What categories are working well, at what price points and how are they being promoted? Obviously the product or service needs to be brilliantly executed from concept to shelf. And finally the fan base needs to know about it.

Pick your metaphor: planets need to align, needles need to be threaded and tightropes have to be walked.

Failure to get this right can vary from spectacular, media friendly market implosions to receiving a far quieter but no less devastating shrug of the shoulders from a buyer signifying the death knell of your nascent extension programme. Let’s take a look at a few examples.

Not Aligning Your Brand DNA - Virgin Pure

(The Virgin Group)

Have you heard of Virgin Pure? No. Nor had I before I started researching for this piece. Virgin Pure is a water purification system for the home. One issue here and why, compared to other Virgin initiatives, it might have been received with such a massive ‘meh’ is that the product and the brand DNA don’t match.

Virgin is a disrupter brand - taking an existing market that people are fed up with and taking it on as a pioneering challenger brand. Virgin Atlantic took on the stiff upper lip and stuffy image of British Airways with innovative service offers aimed at a younger, affluent audience. Virgin Active took the same approach to smelly, male orientated gyms and attempted to make them more widely accessible. Virgin Pure carries over none of the Virgin DNA and doesn’t seem to make sense to the consumer as a result. It reminds me of Virgin Cola. Remember that?

Not Understanding the Market - Dasani

(The Coca Cola Company. 2010)

The most dramatic fail is when an extension is bizarre or bad and goes viral. We’ll stay with drinks and Dasani. Though not strictly meant as a brand extension of Coke, Dasani was nonetheless inextricably linked to The Coca Cola Company. It was doing great in the US and across the EU but its UK launch bombed when the DNA of the design presented the beverage (without ever saying explicitly) as a mineral water and story hungry pre-social media newspapers caught wind that it was just filtered tap water. A bottled tap water scheme had been pioneered by a much loved UK comedy years before and so Dasani was ready made tabloid fodder. It was mercilessly ridiculed for weeks as further PR disasters compounded.

I can’t 100% verify this but the apocryphal story is that the media first caught wind of it because The Coca Cola Company allowed the use of the US promotional strapline “Water With Spunk” in the UK. Canny UK readers will have spotted the hilarious cultural faux pas here and can understand what happened next. Everyone with the stomach for it is welcome to Google “Water With Spunk” but be warned - NSFW.

Ultimately, not understanding the culture of the market led to the product being withdrawn from the UK.

Saturated Market, Lack of Differentiation - Pre-school TV

The children’s pre-school licensing market boomed in the mid 00’s and 10’s. Everyone in TV was after a slice of the £200m in revenue and 50m in merchandising that Teletubbies reportedly made following its launch on the BBC in 1997.

Anne Wood (Teletubbies), Keith Chapman (Bob The Builder), Neville Astley, Mark Baker and Phil Davies (Peppa Pig) all made fortunes with their IP and left in their wake a retail landscape that was awash with copycat products.

There’s no need to throw any one show under the bus here. Too many licensees got burned placing bets on children’s TV brand extension. The market was littered with high profile launches from well respected and talented producers with an amazing track record into an over saturated market. Remember, this was also at the dawn of multi channel TV and time shifted. Too much content with too little shelf space.

You Shall Not Pass!

Attempting to launch ‘Spunk Water’ into the UK market is eye-catching but brand extensions typically fail quietly, long before they get to market. Famously in Brand Licensing circles, a Brand Extension programme gets one shot at the market. If a commercial partner passes once they’ve typically passed forever. So getting under the skin of the brand DNA is critical. Understanding the market is critical.

Misjudge either then it follows that the strategy, the creative execution and ultimately the pitch isn’t going to land well. It’s… a lot.

10 reasons your extension may not make it over the first hurdle

  1. Rigid IP Owner. You or your client are too rigid with the brand. This is brand extension not promotional merchandise. Loosen up and move with your fan base. By definition, brand extensions FLEX.

  2. Deluded IP Owner. The opposite is also true. Extensions can be pushed way too far from the core WAY too soon. IP owners can have high minded ideas about how far it can stretch when all the buyer wants is a big logo. No. A REALLY big logo. Nope. Still not big enough.

  3. Picking the wrong licensee. A DNA mismatch. A well intentioned licensee. A deal memo on the table. It’s hard to let that pass even when you know the product isn’t going to live up to the promise the brand makes to the consumer. Brand Extension is a long game in a world that needs quick wins.

  4. Budget. Let's be clear - there's a lot of IP out there paying for shelf space. Paying for the marketing. Paying for exposure. It takes more than you think to properly support a launch. Go back to the business case - why are you doing this?

  5. Not enough reach. The fan base isn’t big enough for the mass market.

  6. No defendable story. This is like 2010’s pre-school TV properties. Way too much competition to make differentiation possible. If a commercial partner doesn’t like your pitch there’s twenty others in line that are almost interchangeable.

  7. Stale Creative. One guide developed years ago for another market isn’t going to set the world alight. Consider developing less, updating more often and making it bespoke for the prospect.

  8. Approval chain is too long. I’m not even talking about PD approvals. I’m talking about making ANY decisions about anything. You need an individual or small team with authority to sign-off strategy, deals, promotion and PD without running it up a chain so long it crosses international time zones.

  9. Insufficient organisational buy-in. Similar to the above. The whole licensor organisation needs to be fully signed up from the start to make this work.

  10. Pitch Fail. Generic pitch deck, delivered in haste without considering the needs of the buyers own audience. This is consultative selling. Bring prospects into the process, let them into development if possible and get their buy in before you try a binary close.

And finally - the BIG one

There’s one brand extension fail that gets cited everywhere from respected marketing publications like ‘The Drum’ to academic papers to thousands of marketing ‘consultants’ hungry for content and no time to fact check. Yes you guessed it - it’s Colgate Beef Lasagne.

I’ll leave you to feast your eyes on this beauty in the comment. Just one thing. It isn’t real. It’s just a meme that is endlessly circulated as real. The story of the meme is more interesting than the fake fail itself.

What a viral fake lasagne taught me about failure.

Like What You Read? Let’s Talk Next Steps.

The Brand Extension Accelerator is Skew’s answer to an out-dated and inefficient model. Style guides have been the brand licensing industry’s creative hammer for over 30 years and we think it’s about time we rethink and revolutionise the way we do brand extension. Find out more about our unique subscription service and be part of the future of brand licensing.

Don’t just take our word for it though …

“The Paddington franchise has been a huge undertaking, we’re thrilled with everything we have produced together – you have all been fantastic!”""
— Demi Patel, Vice President Creative Services at Copyrights Group""


Check out how Skew worked with Paddington on their franchise brand identity, overall strategy and sub-brands development in our case study here.

I'm obsessed with effectiveness and championing creatives; check out my LinkedIn to find out more.

P.S.

A quick message from the marketing team at Skew. The illustration for this blog was created in Midjourney and inspired by the fake Colgate lasagne brand extension that went viral. The prompt was, 'a lasagne made of toothpaste with teeth'. We've used Midjourney in this instance to create an image because we didn't want to have yet another stock image of a person in beige office wear laughing at salad, we think the internet has enough of those. We appreciate the complex issues that come with 'creative' AI and want to use this new technology to enhance what we do, not replace it.

Oliver D, Skew
Written by
Oliver Dyer
I make Fan Brands, connect brands to fans and make creative that fans of brands love. Some people call this 'Licensing', those people are wrong.

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