Al Ries and Jack Trout, authors of Positioning and other excellent books, have been religious adherents of not extending brands. We generally agree, but are not as religiously committed. An example where we think it may work well is in Procter and Gamble’s move into branded franchises … using existing P&G brands.
Mr. Clean Car Wash. Tide Dry Cleaners. Could resonate right? If you saw one in your neighborhood, we suspect you’d be inclined to give it a try. And providing it delivered on the expected value … you’d probably continue. The brand identity ties to the concept and that gets trial. If value is received, that can create repeat purchase and potentially loyalty.
P&G has identified concepts that resonate reasonably with one of their brands in a service which is highly fragmented and not generally branded. To wit: car washes and dry cleaners. As you might expect, P&G has worked hard to not only deliver value but to be innovative with these concepts, because the converse problem is also a possibility. If these franchises fail to deliver they could affect the core brand value of the underlying product.
Brand extending based on a brand concept of “quality” is a loser. However, all brand extension is not necessarily bad.