Make Extensions Work for You

Brand extensions are a popular promotional tactic with marketers. It just feels safe to promote a new product by piggy-backing it with a proven winner. But what type of extension ads work best? Here's an interesting study that might help with your next promo.

Researchers ran three experiments to test consumer reactions to advertised brand extensions. The first showed participants four iterations of an ad for a Xerox digital camera and a "new" brand extension. Two targets (a digital camera and a digital-photo printer) were similar to the parent company's products, and two (a snowboard and snowboard boots) were dissimilar. The two subsequent experiments introduced factors such as two different parent companies (say, Xerox and IBM) and options such as a target extension advertised alone, or multiple extensions.

Across the board, researchers found one formula got the most positive consumer response: those ads that presented the extensions as completing a set. In other words, a digital-photo printer offered as an extension to the digital camera, completing a set of tools for the photographer, scored the highest. Products from the same parent company also scored best.

The researchers say this phenomenon supports the "set completion hypothesis," which suggests that "a related set of products from a single manufacturer is viewed as inherently appealing" by most consumers.

The Po!nt: Next time, think in sets. Instead of promoting your next brand extension as a value-add, consider presenting it as "completing a set" with the favorite brand-name product.

Source: "Brand Synergy Effects in Multiple Brand Extensions," by Byung Chul Shine, Jongwon Park and Robert S. Wyer Jr. Journal of Marketing Research, 2007.

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