How to Position Your CPG Brand Extension for Market Success.

Brand and/or product line extensions represent one of the most compelling paths to growth for CPG brands. Because they leverage existing brand equity, they require less marketing investment than from-scratch launches. And since it’s difficult to steal more market share within an existing product or category, a product or brand extension could be your best bet to achieve rapid growth.

But making this move is not exactly straightforward. When executed poorly, brand extensions can lead to watered down brand equity, confused consumers, and — ultimately — a market flop. 

So how can you reap the benefits of a brand extension while avoiding the inherent risks? 

First, dig into the strategic value of an extension while assessing the risks involved with a clear eye. Then, leverage consumer insights to ensure you’re extending your brand in ways that will resonate. 

When do brand extensions make strategic sense?

Brand and product extensions encompass everything from tight line and SKU extensions — such as expanding from pasta-based ready-to-eat meals into rice-based offerings — to broader category expansions that target new consumer segments. 

A brand extension could be the right move if:

• There are obvious complimentary categories to move into. For instance, it was completely logical for Campbell’s soup to extend beyond their traditional stove-top soups into on-the-go, microwavable options. Likewise, a brand known for its disposable diapers could easily extend their product line by offering wipes, rash creams, and washable/reusable diapers. 
• You want to create sub-categories for your products. Many brands successfully extend their offerings by, say, launching organic, vegan, or gluten-free products — or otherwise leveling up their ingredients to appeal to health-conscious audiences. The key here is to make sure your existing brand equity will translate into these new areas.
• You’ve taken the time to figure out your brand equity and architecture (and ensured your packaging matches up). Before any brand extension can be successful, you must be certain you truly understand your brand’s equity and strategically plan the hierarchy of the brand so you don’t confuse consumers.

That last point is particularly important. Many large, established brands find the growth they’re looking for not by launching new categories or extensions, but by going in and looking at their brand architecture and product packaging to create more clarity for shoppers. 

So before you do anything, it’s worth considering whether your current brand architecture and product packaging are designed to win.

Portfolio redesign drives mainstream growth for plant-based leader.

Our stage-gated process improved taste and quality perception and strengthened brand trust, delivering a 9-point increase in purchase intent for Vega.

Read The Case Study

What are the risks of brand extensions?

The biggest mistake brands make when extending a brand is failing to look at it from the consumer’s point of view. 

What does your brand stand for or mean to consumers? What do consumers think of when they think about your brand? Can consumers connect the dots from the brand as they know it today to the new products, categories, or platforms you’re exploring?  

If you don’t answer these questions, you could dilute your brand rather than strengthen it. Brand dilution manifests as consumer confusion in three primary ways.

Cognitive dissonance.

Extensions that move beyond the familiar can create jarring disconnects between consumer perceptions and brand reality. Consider the reaction shoppers might have to the idea of a diaper brand launching baby food products — or even offering products like pacifiers and teething toys. Yuck. Even less obvious disconnects can erode brand trust and confuse consumers about what the brand truly stands for.

Navigation confusion.

As portfolios expand, consumer overwhelm becomes a real threat. Poor navigation occurs when brand leaders fail to create a strong strategic framework for managing brand architecture. This is particularly challenging when products within the same category have subtle differences that aren’t immediately apparent to consumers in the crucial five-second shelf review. Take specialty surface cleaners as an example. When products have similar packages and claims but different use contexts (e.g., industrial versus home use), consumers struggle to differentiate between options, leading to decision paralysis.

Brand equity erosion.

Brand innovations can also weaken a brand’s core proposition when not well thought out. Think about a powerhouse like Coca-Cola. How far could they reasonably stretch their equity? New soda flavors? Sure. Coke-flavored gummies and candies? People go for that. But what if Coke tried to launch a juice line? That kind of extension could potentially undermine decades of brand building.

It comes down to this: Your brand makes an implicit promise to consumers that transcends any product or offering you develop. Therefore, it should never extend in ways that don’t fit within that higher paradigm of what it stands for.

Furthermore, consumers create their own perceptions of the brand and what they think it means. And that’s why any decisions you make about extending your brand should fundamentally be rooted in consumer insights. 

Path to Performance™

Taking a results-obsessed approach to CPG package design

Learn how SmashBrand’s proprietary process – rooted in scientific principles, informed by data, and validated by your target audience – takes the guesswork out of package design and delivers guaranteed results.

 

"*" indicates required fields

Email*

Country*

United StatesCanadaAfghanistanAlbaniaAlgeriaAmerican SamoaAndorraAngolaAntigua and BarbudaArgentinaArmeniaAustraliaAustriaAzerbaijanBahamasBahrainBangladeshBarbadosBelarusBelgiumBelizeBeninBermudaBhutanBoliviaBosnia and HerzegovinaBotswanaBrazilBruneiBulgariaBurkina FasoBurundiCambodiaCameroonCape VerdeCayman IslandsCentral African RepublicChadChileChinaColombiaComorosCongo, Democratic Republic of theCongo, Republic of theCosta RicaCôte d'IvoireCroatiaCubaCuraçaoCyprusCzech RepublicDenmarkDjiboutiDominicaDominican RepublicEast TimorEcuadorEgyptEl SalvadorEquatorial GuineaEritreaEstoniaEthiopiaFaroe IslandsFijiFinlandFranceFrench PolynesiaGabonGambiaGeorgiaGermanyGhanaGreeceGreenlandGrenadaGuamGuatemalaGuineaGuinea-BissauGuyanaHaitiHondurasHong KongHungaryIcelandIndiaIndonesiaIranIraqIrelandIsraelItalyJamaicaJapanJordanKazakhstanKenyaKiribatiNorth KoreaSouth KoreaKosovoKuwaitKyrgyzstanLaosLatviaLebanonLesothoLiberiaLibyaLiechtensteinLithuaniaLuxembourgMacedoniaMadagascarMalawiMalaysiaMaldivesMaliMaltaMarshall IslandsMauritaniaMauritiusMexicoMicronesiaMoldovaMonacoMongoliaMontenegroMoroccoMozambiqueMyanmarNamibiaNauruNepalNetherlandsNew ZealandNicaraguaNigerNigeriaNorthern Mariana IslandsNorwayOmanPakistanPalauPalestine, State ofPanamaPapua New GuineaParaguayPeruPhilippinesPolandPortugalPuerto RicoQatarRomaniaRussiaRwandaSaint Kitts and NevisSaint LuciaSaint Vincent and the GrenadinesSamoaSan MarinoSao Tome and PrincipeSaudi ArabiaSenegalSerbiaSeychellesSierra LeoneSingaporeSint MaartenSlovakiaSloveniaSolomon IslandsSomaliaSouth AfricaSpainSri LankaSudanSudan, SouthSurinameSwazilandSwedenSwitzerlandSyriaTaiwanTajikistanTanzaniaThailandTogoTongaTrinidad and TobagoTunisiaTurkeyTurkmenistanTuvaluUgandaUkraineUnited Arab EmiratesUnited KingdomUruguayUzbekistanVanuatuVatican CityVenezuelaVietnamVirgin Islands, BritishVirgin Islands, U.S.YemenZambiaZimbabwe

First Name

Last Name

Company

Title

Phone

This field is for validation purposes and should be left unchanged.

Consumer insights are the linchpin of your brand extension.

The difference between successful and failed brand extensions comes down to how strategically brands leverage consumer insights throughout the development process. And that’s why SmashBrand gathers and applies consumer insights early and often — at every critical decision point. 

Take these 5 steps to make sure you’re leveraging consumer insights:

1. Validate category fit.

Does your brand have a natural fit and right to play in the new category you’re considering? How do consumers perceive your brand’s ability to deliver in this new space? What potential cognitive disconnects might exist? And are current consumers likely to follow the brand into new categories?

Before moving forward with any extension, brands must thoroughly explore these questions through comprehensive usage and attitude (U&A) studies and category baseline testing. The answers will give you confidence about your brand’s ability to win in the new category and deliver value there.

Through testing, you may discover that consumers already associate your brand with categories you haven’t yet entered. This is a powerful indicator of extension potential. However, this perceived fit must be validated through careful research rather than assumed.

2. Master visual equity.

Your ability to leverage brand equity via your product pack plays a crucial role in your extension’s success. But which visual elements truly carry meaningful equity? And how do you differentiate your new product’s value proposition while leveraging the right visual elements?

Consider the following questions:

• Which of your ownable visual elements are distinctive and recognizable?
• How might your visual assets transfer to new categories, platforms, and products?
• Will your visual elements stand out among category competitors?
• Will consumers recognize the brand while being able to quickly differentiate between product lines and the competition?

The goal is to identify elements that can bridge the gap between existing and new categories while maintaining brand consistency. However, if you have very low market share relative to your competitors, you might have less to lose and be up for creating more distinctive visual brand assets to help accelerate the brand, steal market share, and create products that are more attractive to consumers. But again, that decision should be made based on consumer insights — not in a vacuum. 

3. Ensure clear navigation.

As portfolios grow, helping consumers navigate between products becomes increasingly critical. Consumer testing must validate that the portfolio organization makes sense to shoppers. Remember:

• Consumers have lower tolerance for confusion within a brand than between competing brands.
• Product differences must be immediately apparent during the crucial five-second shelf review.
• Navigation becomes exponentially more important as portfolios expand.
• Complex categories require especially clear differentiation between products.

Testing is the only way to ensure your extension makes sense to consumers — not just to you as a brand leader.

4. Make smart brand architecture decisions.

As referenced above, brand extensions require careful consideration of your overarching brand architecture. There are three primary approaches to take: 

• Direct Extension. Using the master brand with category descriptors to extend into new products.
• Sub-branding. Creating distinct lines under the master brand (like Campbell’s On-the-Go referenced above).
• Endorsement Strategy. Leading with a new brand while maintaining a connection to the master brand

As you’re choosing among these options, remember that the goal is for consumers to easily and even unconsciously comprehend the logic behind your strategy. Therefore, make decisions based on:

• How differentiated the new products are from core offerings.
• The degree of overlap between target consumers.
• Available resources for building new brand equity.
• The strength of existing brand equity in the new category.
• Life cycle considerations for target consumers.

The success of your architectural approach ultimately depends on striking the right balance between leveraging existing brand equity and creating appropriate separation — a balance that can only be determined through careful consumer research and strategic planning.

5. Test, test, and test again.

Consumer insights remove the guesswork from the brand extension process and add much-needed objectivity and clarity about the best way to proceed. Consumers are the only stakeholder whose reaction to the extension and whose opinion of the change will actually lead to revenue and sales. 

Capturing those insights throughout every step outlined above allows you to make informed decisions and project the likely outcomes of each one.

Ready to leverage a brand extension to grow?

When done right, brand extensions become powerful drivers of sustainable growth in the CPG space. But success requires more than just dreaming up a new product idea or identifying an adjacent category to move into. 

It requires careful planning and rigorous testing — from start to finish. 

SmashBrand knows what it takes to make brand extensions succeed, and we’d love to help you get the market lift you’re after. So what are you waiting for? Let’s talk.