Editorial: Stretching the Brand

A strong brand can branch out successfully-or rebound if it doesn't work.

By Mary Boltz Chapman, Editor-in-Chief -- Chain Leader, 11/1/2007

I had an e-mail conversation the other day with a reader who wanted to pick my brain about creating and launching retail products borne out of restaurant-chain brands. Like how you can pick up a Taco Bell taco kit (just add beef and toppings) at the supermarket and serve dinner with some refreshing T.G.I. Friday’s margaritas.

Chi-Chi’s "restaurant-style" tortilla chips are still available, while the chain is no more. And the reader reminded me that Stouffer’s frozen foods are what’s left of another restaurant brand. Folks in different regions and age groups can probably come up with many more examples.

Name-Brand Merchandise

Beyond food items, chains license products like clothes, cookware and toys. I played with a Weebles McDonald’s store as a kid. The cash register rang when you pushed it. I have a Burger King toy food set from the ’80s tucked in a safe place so nobody tries to sell it at a garage sale. I see the same A&W mugs that we used growing up on shelves at antique stores. Maybe they don’t count, because they’re more premium than brand extension. But I wonder if my mom still has them in the basement?

And the list is long of companies that have created brand extensions in the form of restaurant chains: NASCAR, Harley-Davidson, Lipton Tea, Nestle Toll House, American Girl, Fox Sports, ESPN.

A brand extension is less risky than launching a new product, because consumers are already familiar with the name. It can reinforce a brand’s assets and build equity.

But there are plenty of brand extensions that have failed for various reasons. Harley-Davidson debuted a line of boots one year to great success, but the next year it introduced a cake decorating kit. Really. Hooters Air struggled with the rest of the airline industry after 9/11, but would it have ever had a large enough customer base to support it? And Mattel launched a line of adult accessories under the Barbie brand.

Take a Chance

So do you take a chance and launch a product that might hurt the brand? According to a research report from the Anderson School of Management at the University of California-Los Angeles, the risk is low: "Research suggests that brand dilution seems to occur only under very specific circumstances.…In other words, a strong, diagnostic and inconsistent extension experience is necessary for consumers to update their feelings towards the parent brand."

The report says a strong brand not only has the best chances of achieving successful extensions, it has the best chance of overcoming an unsuccessful one. Harley-Davidson, Hooters and Barbie didn’t suffer from their missteps because they have powerful brands able to absorb the failure and move on to try something else.

Brand extensions should make sense for the brand and its priorities. There has to be some correlation between the brand and the extension. It makes more sense for Subway to launch a line of yoga balls than a line of golf balls. Ted’s Montana Grill is known for its sustainable bison-herding practices, but customers would not go for a line of belts and handbags. And, of course, they should be done with a carefully chosen partner.

Then, like Chi-Chi’s and Stouffer’s, the extension could live beyond the original product.