Rethinking Marketing: Create Consumer Value through Brand Extensions

“Products” as Brand Extensions

There is a marketing opportunity to create value-added brand extensions. Value added brand extensions provide utilitarian benefits to the consumer.

There has been an uptick of brand extensions by way of mobile applications, microsites, web tools, and more. A couple examples:

• Benjamin Moore’s Paint Calculator: Know how much (Benjamin Moore) product to purchase using the paint calculator. It’s super simple to build (and use), keeps the user on the Benjamin Moore website, and nears the user to making a purchase decision (converting). This is the simplest example I’ve found.
• Nike+ Running Application: Nike doesn’t sell shoes, athletic wear, or basketballs. It sells athletic culture. And Nike+ was a great way to extend the brand into the athletic experience.

Brand extensions that provide these benefits extend the product lifecycle, builds the relationship, and creates an enchanting experience. But most of all, they are a staple of customer-centric marketing program development.

Entrepreneurs Capitalize Where Brands Neglect

But there are some companies that run ahead of the pack and capitalize on brand markets. These entrepreneurs create free consumer value, then invite brands into the party at a cost. A couple of examples:

• Mint.com: The banking industry tanks and bleeds brand equity while Mint use continues gaining credibility. Mint seizes the opportunity to leverage massive amounts of very personal consumer data by selling hyper-qualified advertising to banks and other financial services companies.
• iTunes, Pandora, Spotify: Record companies keep kicking and screaming with each evolution of iTunes. But they continue giving away opportunities to own the next evolution.
• Groupon: Small Business Associations, even SBA, could have owned this and sky-rocketed the value of their entire organization.
• Evernote: Where was Post It on this? Or are they really just selling paper?

This is easy for brands, but there’s a significant opportunity cost being late to the party. The entrepreneurs own the consumer data, access points, and relationships. Brands gain…advertising channels.

Check mate? Or are more brands going to stand up and own their markets?

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Tagged as: benjamin moore, branding, evernote, groupon, itunes, mint, nike, pandora, spotify