How to Know If a Brand Extension Will Succeed
An article not too long ago in the Journal of Consumer Psychology summed up current research on brand extensions thus:
What factors determine whether or not a brand extension will be successful? The most important factor identified by prior research is perceived fit. Consumers respond more favorably if they are able to perceive a fit between the extension and the parent brand. . . . Perceived fit, no matter how it is defined, is the most important determinant of brand extension success—more important than marketing support, retailer acceptance, and quality of the parent brand.
The last sentence is worth reading again! Marketing support, effective distribution, and even strength of the parent brand matter less than whether buyers think the extension makes sense.
But this is where market research for new product development shines. Consumers may not be able to tell you what they want and what products you should develop to address their unmet needs. But they can tell you whether things “fit” and make sense for them. Not only that, but most consumers love to do it. Remember the Sesame Street song and game?
One of these things is not like the others,
One of these things just doesn’t belong,
Can you tell which thing is not like the others
By the time I finish my song?
So, if you’re doing market research for a brand extension, the single most important question you should ask respondents is whether the new product fits. It is more important than whether they like it, and more important than their (probably unreliable) report of purchase intent.
As a secondary set of questions, you could explore the type of fit that buyers perceive (category fit, complementary usage, attribute transfer, expertise, or image) because marketing efforts can then focus on enhancing the perceived fit as the product is introduced.
–Joe Hopper, Ph.D.