In the last couple of decades, brand extension has increasingly become marketers’ default growth strategy. Nowadays there are very few one-product brands and more and more brands stretch across categories and markets. An un-stretched brand can seem to the exception to the rule.

One category however where the jury is still out as regards to the benefits of brand stretch is the car industry.

When Mercedes announced its stretch into the small car market with the A class many were horrified. The launch of the Lexus brand as Toyota went into the luxury car market just seemed to highlight some car brands’ limitations. However Porsche‘s move into 4×4 market with the Cayenne re-opened the debate, where its success is countering the gainsayers’ initial scepticism.
 
But the announcement of BMW’s plans for the Mini brand seems to have opened the debate again. Mini is launching a souped up 4×4 Mini and looks like its considering Mini-vans and electric scooters, but many in the industry are not convinced: are these true Minis?

It’s a debate that highlights the key issues marketers need to think about when considering extending their brands. What is the core, the DNA of your brand and how does any extension fit with that? At The Value Engineers we have always said that ideas aren’t the only problem, structure, strategy and vision are equally if not even more important. Extension that are on brand are much more likely to succeed.

But from a business perspective it is also worth considering your organisations’ capabilities. Extension may be right for your brand but do you have the capabilities to deliver what would be required? Building new capabilities increases the cost and risk of an extension and out-sourcing or licensing your brand cuts potential margins. Using existing capabilities within your organisation (even if they are not currently used on that particular brand) has to be a better option.

So looking at the car brands it is not surprising that a number of the car brands stretch into other transportation markets – BMW do motor boats, whilst Honda’s engine expertise stretches across cars, motor bikes, boats and even lawn mowers.

So in discussing Mini’s planned extension two questions that have to be answered are:

Are they on brand?
Are they on business?

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