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Daily RC Article 155

Evolution of Branding: From Extension Strategies to Personal Brands


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In the 1980s companies often paid stratospheric prices to acquire established brands. With many of the best brands snapped up, extending existing brands is becoming popular again.

From booze to lipstick, consumer brands were the prizes which sparked some of the biggest takeover battles and grandest break-up schemes of the 1980s. Bidders and break-up artists thought they could sell well-known brands or exploit them better than existing managers.

The steam has gone out of the takeover market, and few big brands still carry "for sale" signs. After a massive reshuffle of brand portfolios, managers in consumer goods industries are returning to an old standby of marketing: brand-stretching.

Brand stretching – using the recognition value and reputation of a brand-name in a new product area – is often a quick and cheap way for a company to invade a new market. But brands are not endlessly elastic. Stretching can also undermine the credibility of the original product. Consumers either may not believe that the new product shares any of the characteristics of the old, or they may simply forget what was attractive about the original item.

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Nevertheless, many companies are beginning to stretch their brands for the same reason that they once scrambled to buy established brands at ever-higher prices: launching a new brand can be even riskier and more expensive. Nielsen found that, of America's top twenty-two brands back in 1925, nineteen still led their product categories 60 years later. Britain's top ten grocery brands have an average age of forty-two.

Brand-stretching can save money. OC & C recently studied five years’ worth of new-product launches by one multinational client. Its findings? The advertising and promotion costs per consumer persuaded to try out each new product were 36% less for stretched brands than for completely new ones. Not only did stretched products need less advertising, but consumers were also more willing to give names they already knew an initial trial.

Even well after a new product's launch, stretched brands have a higher survival rate. OC & C found that, of products launched by the same multinational six years ago, only about 30% of new brands exist today, while over 50% of stretched ones do.

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Another concept which has caught on in recent times is personal branding. This is the practice of people marketing themselves and their careers as brands. While previous self-help management techniques were about self-improvement, the personal-branding concept suggests instead that success comes from self-packaging.

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Personal branding often involves the application of one's name to various products.

Branding is all about product perception. And when that product is you, it's even more critical the branding process be so perfect that the decision can't be anything but in your favour. A personal brand is 'a personal identity that stimulates precise, meaningful perceptions in its audience about the values and qualities that person stands for, personally and professionally.' And it's not the same as advertising and PR. The purpose of creating a personal brand is not to make you famous. It's about enhancing your sphere of influence, because that's what generates wealth. A personal brand is about keeping you and your business top-of-mind, telling people you can create value and helping business come to you, rather than have you scout for work. Personal branding is a reflection of reality…



In recent times, the resurgence of brand extension strategies and the emergence of personal branding reflect shifts in marketing paradigms. While brand stretching?leveraging established brand equity in new product areas?offers cost-effective market entry, it risks diluting the original brand. Simultaneously, personal branding, focused on projecting individual identities akin to corporate branding, emphasizes the creation of influential and authentic personal brands to attract opportunities and business prospects. Both strategies center on creating distinct perceptions but carry unique challenges and benefits.
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