What is a line extension?
Taking a brand name in one category and using the same brand name in another category. Example: Tostitos are tortilla chips and now they make Tostitos salsa.
Top 5 Line Extensions of 2007
5. American Idol Camp
An extension of the hottest reality show on television. Now kids 10-15 can live their dream and learn about the music business from the pros.
4. Virgin America Airlines
An extension of Richard Branson’s successful Virgin Atlantic Airlines. Virgin America has a unique and focused position (low-fare, long-haul airline servicing the coasts) with a coolness factor of 10 and Sir Richard to boot.
3. Newman’s Own Wine
Paul Newman started with Newman’s Own salad dressing in 1982. And today Newman’s Own sells a wide variety of products that are focused on being better for you and better for others with 100% of the companies profits being donated to charities.
2. Curves Cereal
An extension of Curves the hottest brand in fitness and largest chain of gyms in the US. Many women include cereal in their diet plan. In a category with many small brands Curves on the box makes the position crystal clear.
1. PetSmart’s PetsHotel
The way to win is by being first. PetsHotel is not the first doggie hotel, but it is the first national brand. Budweiser was the first national brand of beer.
PetSmart has the brand savvy, operational expertise and real estate connections to make PetSmart a big success. If there is one thing we love more than our kids, it is our pets, and in some cases even more.
Why do some line extensions work and others fail?
Line extensions can work when a brand moves into a complementary category that has weak competition.
Virgin Cola didn’t work because Virgin is an airline and has no credibility in cola. And Coke and Pepsi are such dominant brands there is little room for anybody else even if Richard Branson will jump off a mountain naked to promote it. Same for Virgin vodka, Virgin wedding dresses and most of the crazy Virgin line extensions.
Many people assume we are against all line extensions. Not true. Most are foolish, faulty or forgetful. But some succeed and are savvy business moves. Sometimes a brand is so powerful it is OK to dilute it with expansion especially when the competition is weak.
Just remember, the real power in branding and business is in launching new brands.