Choose the right name for brand extensions

If you want to be a bad product manager, put your well-known brand name on any new related product. You should leverage the brand equity that you’ve built up. Even if the new product is not really that similar to your current product, the fact that it uses the same name will help attract attention. For example, Research in Motion should leverage the Blackberry name they ever start producing MP3 players, and Salesforce.com could launch a subdomain which handles online payroll services should they decide to add on to their current online CRM service. Why build a new brand from scratch when you can just piggyback on an existing name which has high awareness in the market? Take the money you save from establishing the brand and use it to add more features to the product, since that’s what will really matter to customers in the long run.

If you want to be a good product manager, be smart about how you use your brand name for product line extensions. While building recognition of a new brand from scratch can be expensive and time-consuming, it often is the most logical option due to how the current brand name is perceived in the market.

The consumer packaged goods industry is usually very smart about when to reuse brand names and when to create new ones. As an example, Woolite is smart about their brand extensions; they all support the product concept of “keep all the clothes you love looking like new.” Wash bags, ironing cloths, and special hangers are all consistent with the mission of the original Woolite product. If the product manager for Woolite wanted to enter the market with a new product designed to clean large loads of heavily-soiled laundry, it would make sense to use a different name.

Though this seems like common sense, companies and product managers still get it wrong, either by coming up with good product ideas and forcing their brand on to them, or by coming up with ideas that don’t fit their brand at all. Laura Ries provides some good examples as she discusses eBay’s new fixed-price purchase option, which has not been too successful:

I could have told you that months ago because the idea of EBay going beyond auctions violates a fundamental law of branding. And when you violate a fundamental law your brand suffers.

The Law of Expansion states that the power of a brand is inversely proportional to its scope. In other words, expansion weakens a brand. When you try to stand for everything and appeal to everybody your brand loses its meaning in the mind.

EBay owns online auctions in the mind, a powerful and profitable position to own. EBay owns it because online auctions created the category by being first in the mind.

EBay selling goods at fixed prices make no sense for the brand or to consumers. EBay Express is totally confusing and contradictory concept.

She also has some good examples of how Volvo, Kids “R” Us, and IBM have suffered the same fate. In situations where you want to launch a new product but it could contradict with your current brand, launch a new brand “As Toyota did with Lexus. As Sony did the PlayStation. As Apple did with iPod. As MTV did with VH1.”