Extensions and Target Market
It extends your target market:
Gillette’s Sensor for Women leveraged the definition of the
business Gillette’s in and its brand benefit of the “clean shave,” effectively extending its
target market from only men to all adults who shave.
Extensions Should Support Brand Positioning
Extensions are even more powerful when linked back to the customer relationship and how it has been used
as a basis for your brand positioning. This means ensuring that the extension builds off one or more of the
following positioning components:
It extends your business definition:
In launching IBM Consulting, IBM changed the
definition of the business it was in from “technology-based” to “technology-based
solutions.”
It extends your point of difference:
By introducing the benefit of “guaranteed videos in
stock,” Blockbuster has grown its points of differentiation. So has Federal Express by
establishing a new drop-off time for packages of midnight in some locations.
It extends the entire positioning.
This usually occurs when a business is trying to enter a
new market for the first time with a brand whose strengths are recognized beyond its current target market
and current definition of the positioning.
The introduction of Caterpillar Footwear extended Caterpillar’s reputation and brand strength from the heavy
equipment market. And also for that matter Reliance.
It is not only into telecom services but also manufacturers of mobile phones, it is into Departmental stores named Reliance fresh ,also into Consultancy, Insurance etc.
This can be risky, but done right, it allows a company to diversify its range of branded products and take a
true portfolio approach to managing its brand.
Deepening – and Optimizing – the Customer Relationship
Clearly, the proposition of extending a brand and its equity is closely tied with the customer relationship now
and as, ideally, you would like it to develop. Defining and acting on that relationship is more problematic
today than ever before. Evolving business models involve multiple customer touch points, an increasingly
complex range of products, services and content, and multi-layered advertising, commission and margin-
based revenue structures. These demand new practices in not merely managing, but in optimizing the
customer relationship.
The Customer Relationship Optimization (CRO) perspective requires a more holistic and
enterprise-level understanding of the brand as the amalgamation of all customer experiences, and a strategy
for managing multi-faceted relationships.
Further, it requires a clear understanding of the value the customer wants to derive from the enterprise – and
the value the enterprise derives from the customer.
Each business segment and delivery channel has a distinct and separate revenue structure and customer
base.