There are two ways to extend a brand; how do you handle them well?

It is estimated that in some consumer goods markets in the developed market economies of Europe and America, nurturing a new brand generally requires 0.5-1.5 billion US dollars. And in China, the investment needed to create a successful agricultural product brand will also reach tens of millions or even over 100 million yuan. But in reality, even with huge financial support, the success rate of new brands is very limited. There are quite a few examples of brands such as Qinchijiu and Taizinai that were famous for a time but then faded away like a fleeting flower. Comparatively speaking, if a brand name with high market recognition is used to launch new products, the investment required will be greatly reduced, and the possibility of success will also be greatly increased.

Therefore, after an enterprise's brand succeeds in the market, customers, through long-term contact and use, will develop a brand dependence with strong emotional coloring. So when launching new products, using the market influence of the existing brand to carry out brand extension becomes a logical path choice. In fact, applying a brand name that has succeeded in one category of products to other categories of products has become a core strategy for many enterprises to achieve growth.

There are two methods of brand extension: one is to apply the brand name to new product categories, or to license the brand name to other companies, allowing them to use it in that category of products. The other is to merge or acquire other companies, and then carry out brand extension through their brand names. A group of well-known domestic agricultural enterprises such as Mengniu Dairy, Yili Dairy, Yanjing Beer, and Huiyuan Juice all successfully achieved brand extension and enterprise expansion through this method.

But it must also be clearly recognized that brand extension is not a “master key” for enterprise development, but more often is a double-edged sword. After some brand names are extended, compared with before the extension, there is not much help; instead, subtle or even negative associations may be produced. Sometimes it may even happen that the survival and growth of the extended brand come at the cost of sacrificing the market share and influence of the original brand, building brand extension on the shrinkage and “pain” of the original product, and the result is often more loss than gain. Therefore, in the process of evaluating brand extension decisions, one must not only look at the promotional effect of the brand's market influence on the launch of new products, but also analyze whether the product's market and social positioning helps stabilize the brand's market and social status, and whether the two can complement each other, and must never attend to one thing and lose another or even drink poison to quench thirst.

⟦NL> For this reason, in the process of making brand extension decisions, one must repeatedly ask from two angles: On the one hand, does the brand name help the brand to be extended? This can be measured from multiple angles such as consumer taste and quality associations. For example, after Sunkist launched Sunkist vitamin C tablets, it strengthened Sunkist's associations with oranges, health, and vitality. Mengniu's “Not all milk is called Telunsu” naturally linked “Telunsu” with the Inner Mongolia grasslands, high-quality pastures, and gold-medal milk. On the other hand, does the extended brand help enhance the core brand image? For example, suppose the core brand is positioned for the demand of high-income groups in large and medium-sized cities for high-end agricultural products; when extending the brand to mass-market agricultural products for wage earners, one must be very careful. Because the original target customers will very naturally question: Is the product quality just average? Otherwise, how could it enter hypermarkets?

In the final analysis, the extended brand and the original brand must match, so that consumers will naturally transfer their good impressions and associations of the original brand to the extended brand. Research shows that there are two ways to improve this degree of match: First, skills can be transferred. For example, Haidilao not only achieved great success in the mass hot pot catering market, but also a series of Haidilao seasonings, hot pot bases, and stir-fry bases extended from it are also popular on the seasoning shelves of ordinary supermarkets. Because people easily believe that Haidilao tastes so good not only because the meat is good, but of course the seasonings are good too. Second, functions can be complementary. For example, a fresh milk brand with high market recognition extends to yogurt and milk powder brands, a tourism food brand extends to beverage brands, and so on.

Brand extension can be carried out through the following steps: First, conduct a brand recognition survey. That is, what do consumers think of when the brand name is mentioned. For example, when “Daoxiangcun” is mentioned, people may associate it with Beijing, gifts, pastries, food, time-honored brand, palace, delicious, and reassurance. Second, conduct a product recognition survey. That is, what products do consumers think of when the brand name is mentioned. Regarding “Daoxiangcun,” they may associate it with snacks, thin pancakes, mooncakes, and other dessert varieties. Third, determine candidate product categories. According to the categories listed in the first two steps, and based on the principle that the extended brand matches the core brand, determine several candidate extension brands. Fourth, conduct trial purchasing. Release a small amount of the extended brand's products into the target market, obtain the trial purchase rate, and on this basis finally determine the brand extension plan.

At present, the overall scale of China's agricultural production and operation entities is relatively small, or in other words, there are not yet many strong brands with high market recognition. Therefore, for quite a number of agricultural enterprises, before the main brand is strong enough, they should be extremely cautious about issues related to the overall brand strategy, such as whether to carry out brand extension and how to carry out brand extension.