DelVecchio’s article deals with the effects of brand extensions on company sales, especially with regard to the affected brands. Brand extension is hereby taken to mean how companies offer completely new products under the existing brand names. The target market could be the existing customer base or completely new one.
Companies extending their brands are especially interested in increasing sales revenue by offering more products. According to DelVecchio (2000) the extensions could be a double edged sword to the implementing companies; it could increase sales to higher levels or could reduce brand loyalty to brands formerly dear to consumers. Marketing executives in companies intending to extend brands therefore have a hard task of investigating the level of brand loyalty before thinking about extensions.
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Understanding the risks involved with brand extensions should therefore be taken as the first step laying strong foundation for future sales. DelVecchio (2000) has specifically stated that having many brands associated with the one being extended increases the possibility of success. This in consideration that respective company brands happen to have already proven themselves in the face of competition.
Extensions are therefore seen by consumers as just another attempt for respective company to meet market needs and demands. Coca-Cola Company is the best example of a company that effectively uses its wide products to improve brand extensionality; its Coke drink is available in Zero, Vanilla, and Diet extensions (Makwana 2008)—all which succeed in their mission of satisfying specific market segments’ tastes.
DelVecchio’s analysis leads to conclusion that brand loyalty is the foundation for successful brand extensions, which explains why companies that exceed consumer expectations succeed in their brand extension initiatives.
Coca-Cola is yet another company whose consumer loyalty has boosted its extended brands, as well as remaining as the world leader in carbonated drinks market. Ralph Lauren is another company that has been able to use its consumer loyalty to extend its Polo brand from clothing to home decor and furnishings. Consumers highly satisfied with the clothing had confidence in the new line of products and immediately embarked on making purchases.
Companies whose products have narrow brand loyalty are on the other hand faced with diluted popularity of products being extended. For instance, Chrysler Motor Company faced with diluting popularity of its Jeep Liberty after extending this product into Jeep Patriot. Fact that Liberty had insignificant consumer base meant that extending it to Patriot would hurt it (Liberty) even further (BusinessWeek 2006). Indeed American car manufacturer’s current declining sales problems develop from extending unpopular products.
These car assemblers go to an extent of one brand’s chassis for product extension purposes, such as Ford’s use of the popular F150 chassis to make more Ford brands. Unfortunately for such businesses, consumers end up understanding what is happening in the extensions and therefore feel cheated.
The only solution is to ditch the affected companies’ products altogether and start patronizing competitors’ products. In retaliation to a point made previously in the paper, it is vital for companies to cultivate consumer loyalty in products they could be planning to extend in the future, failure of which result to loss of business even on well established products.
BusinessWeek, 2006, Jeep’s Misguided Compass, Available from http://www.businessweek.com/autos/content/oct2006/bw20061025_140103.htm
DelVecchio, D., 2000, Moving beyond fit: the role of brand portfolio characteristics in consumer evaluations of brand reliability. Journal of Product and Brand Management. Vol. 9 No. 7, pp. 457-471.
Makwana, B., 2008, Coca-Cola’s Targeting Niche Market through Brand Extension. Available from http://www.ibscdc.org/Case_Studies/Marketing/Brands%20and%20Branding/MA R0089A.htm
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Moving Beyond Fit: Brand Reliability. (2016, Jun 03). Retrieved from https://phdessay.com/moving-beyond-fit-the-role-of-brand-portfolio-characteristics-in-consumer-evaluations-of-brand-reliability/