Over the years, the business environment has changed quite a bit. Thus, we no longer conduct business as we used to, nor do we market our services and products in the same way. In fact, a lot of those changes have to do with the emergence of Internet marketing. It has drastically changed conventional marketing, so much so that marketing is incomparable to what it used to be.
In terms of brand managers, things have also changed. Now, they are not just in charge of product and service marketing promotion. Nowadays, they also work as business managers and share the responsibility for the brand. Moreover, they are responsible for growth, sales, and profits.
Thus, a powerful brand usually has a team of brand managers all over the world, as global brands are present pretty much everywhere. What’s more, with the workload only getting bigger, it’s vital to build the right management team and the right structure, taking into account local factors and sensibilities. Only then will the managers be able to take care of the brand on both micro and macro levels.
Brand extensions today
Of course, one of the most popular strategies right now is using brand extensions to exploit brand value. Hence, in most supermarkets, we can come across all sorts of products that use the same brand but are in different categories. A good example is Coca-Cola and their Coke.
However, even though brand extensions are the standard nowadays, we have to ask ourselves whether they are worthy of our time and money. Are they even necessary?
In today’s marketplace, the competition is fierce and ready to do everything in their power to gain an advantage. Thus, brand managers are under pressure to deliver incremental value and high revenue, not to mention retain the brand’s market share.
Moreover, management teams have also raised the expectations regarding the market share, bottom line, and revenue growth. Therefore, brand extensions are sometimes needed if a company wants to create product differentiation and boost revenue streams. Some niche markets also depend on these extensions, as the parent brand hasn’t reached them yet. Thus, they also help the brand gain more market share.
A natural progression
Since most companies have spent tons of money, time, and effort to build the parent brand from scratch, creating a brand extension is a natural progression. After all, they can easily capitalise on what they’ve already achieved and maximise their ROIs.
However, are these extensions actually beneficial for the brand? What kind of an effect will they have on the parent brand?
As always, it’s very difficult to predict what will happen in the future. Over the years, some brands have made highly successful brand extensions. Others however, have failed and destroyed the consumers’ perceived value of the brand with just one poor extension.
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