According to Branding Strategy Insider, one of my co-authors, Nigel Hollis shared three basic ways a brand can change the brand name to its advantage:
Give Colgate for example: Not only have they been successful in disrupting the category by adding Colgate® Total® to their line of toothpaste, but also they have been extended the brand category with products such as Colgate® Peroxyl®, a rinse of minor mouth irritations and Colgate® Orabase®, a pain relieving paste. By extending the brand experience, Colgate also extends the consumer experience while increasing their overall brand awareness through additional shelf space in the retail aisle.
There are several ways for a company to extend a brand. Enterprise can choose to manufacture or source (often from less expensive manufactures overseas) the new category of product. These two methods require existing sales and marketing teams to drive demand and customer commitment. However, if the company is not familiar with the extended category, they will have to invest in building a minimal level of competence or risk a possible failed brand extension.
There is another option if the new category is a perfect fit for the brand but the company has no expertise. In this instance, the company can choose to acquire a company that currently manufactures or sources the product or they can choose to license their brand to a third party. Through licensing a rand owner or licensor can extend a brand into a new category without having to make a capital investment and go through months of business integration. The third party manufacturer in exchange for rights to the brand in the category, become responsible for all manufacturing, distribution, marketing and sales. Moreover, the company (now called a licensee) is required to pay the brand owner a loyalty (normally a percentage of net sales) on the net revenue for the total sale of branded products in the category that they have licensed.
Source: brandingstrategryinsider
Author: Pete Canalichio
- Expand the category
- Disrupt the category
- Exceed the category
Give Colgate for example: Not only have they been successful in disrupting the category by adding Colgate® Total® to their line of toothpaste, but also they have been extended the brand category with products such as Colgate® Peroxyl®, a rinse of minor mouth irritations and Colgate® Orabase®, a pain relieving paste. By extending the brand experience, Colgate also extends the consumer experience while increasing their overall brand awareness through additional shelf space in the retail aisle.
There are several ways for a company to extend a brand. Enterprise can choose to manufacture or source (often from less expensive manufactures overseas) the new category of product. These two methods require existing sales and marketing teams to drive demand and customer commitment. However, if the company is not familiar with the extended category, they will have to invest in building a minimal level of competence or risk a possible failed brand extension.
There is another option if the new category is a perfect fit for the brand but the company has no expertise. In this instance, the company can choose to acquire a company that currently manufactures or sources the product or they can choose to license their brand to a third party. Through licensing a rand owner or licensor can extend a brand into a new category without having to make a capital investment and go through months of business integration. The third party manufacturer in exchange for rights to the brand in the category, become responsible for all manufacturing, distribution, marketing and sales. Moreover, the company (now called a licensee) is required to pay the brand owner a loyalty (normally a percentage of net sales) on the net revenue for the total sale of branded products in the category that they have licensed.
Source: brandingstrategryinsider
Author: Pete Canalichio