- WHAT IS COLD CALLING?
- TURN YOUR VEHICLE INTO A BILLBOARD
- HOW TO INCREASE OUR PRICES?
- WHAT IS A BRAND EXTENSION?
- WHAT IS THE BRAND IMAGE?
- WHAT IS CAUSE MARKETING?
- WHY DO YOU NEED A SOCIAL MEDIA POLICY?
- WHY HAVE A CMS?
- HOW TO RESTART OUR ADVERTISING ACTIVITIES?
- THINGS TO REVIEW DURING THE CURRENT CRISIS!
- REMOTE WORK AND ITS IMPACT ON OUR OPERATIONS
- MARKETING IS A BATTLE
- WHY DON'T I TAKE COMMISSION ONLY MANDATES?
- HOW TO MARKET TEST A NEW PRODUCT OR IDEA?
- EXECUTION - WHY DO GOOD STRATEGIES SOMETIMES MISS THE TARGET?
- AN ENTREPRENEURIAL EVENING AND EXCELLENT BUSINESS IDEAS
- HOW TO NETWORK THE RIGHT WAY?
- IS NEGATIVE PUBLICITY ALWAYS NEGATIVE?
- WHAT IS THE SUCCESS RATE FOR START-UPS?
- WHAT SHOULD YOUR MARKETING BUDGET BE?
- PRICING STRATEGY: PRICE SKIMMING!
- PRICING STRATEGY: GIVING YOUR PRODUCT/SERVICE FOR FREE
- SHOULD WE COMPARE OURSELVES?
- WHAT SHOULD WE MEASURE WHEN WE EVALUATE OUR MARKETING EFFORTS?
- WHAT IS THE VALUE OF A CUSTOMER?
- DOES CONTENT MARKETING WORK?
- WHAT IS THE DIFFERENCE BETWEEN A BRAND, BRANDING, A PERSONAL BRAND AND A COMPANY/PRODUCT NAME?
- WHAT IS GROWTH HACKING?
- HOW MANY « P » CAN BE FOUND IN THE MARKETING MIX?
- THE CUSTOMER VALUE CHAIN
- HOW CAN YOU PROTECT YOUR UNIQUE PRODUCT OR SERVICE?
- CONFERENCE ON FINANCING - MAY 2, 2017
- WHAT IS DRIP PRICING?
- WHICH AMOUNT SHOULD YOU CHOOSE FOR YOUR PRICES?
- DETERMINING YOUR HOURLY RATE BASED ON THE VALUE YOU THINK YOU HAVE
- IS LOWERING YOUR PRICES A GOOD IDEA?
- TO OFFER OR NOT TO OFFER FINANCING?
- HOW TO PROTECT YOURSELF AGAINST EXCHANGE RATE RISKS
- WHEN IS A GOOD TIME TO INCREASE YOUR PRICES?
- DEMAND BASED PRICING
- WHAT IS A LOSS LEADER?
- HOW TO ORGANIZE A DRAW THE RIGHT WAY?
- HOW TO HAVE REMOTE EMPLOYEES
- IS IT GOOD TO BE FIRST IN A MARKET?
- THE THREE TYPES OF CUSTOMERS
- EXPORTING TO MEXICO - QUERETARO REGION
- DEFINING BUSINESS SUCCESS
- ARE YOU USING REBATES? WATCH OUT FOR THESE
- IS THE CUSTOMER ALWAYS RIGHT?
- EXPORTS AND QUEBEC COMPANIES
- COWORKING SPACES
- YOUR PLACE OF BUSINESS AND INTERNET
- WHY IS SOCIAL MEDIA IMPORTANT FOR YOUR BUSINESS?
- HOW TO USE FREEBIES
- WHAT IS THE MAGICAL FORMULA FOR HAVING SUCCESS IN BUSINESS?
- DO YOU HAVE EXPERIENCE IN MY FIELD?
- WHEN CAN WE STOP OUR MARKETING?
- WHAT IS A CALL TO ACTION?
- WE ARE ALL SALESPEOPLE; HERE'S HOW TO GET THERE
- HOW CAN MARKETING AND SALES COLLABORATE?
- HOW TO SELL MORE TO YOUR EXISTING CLIENTS
- WHAT IS CROSS-MARKETING?
- WHY SHOULD I SEGMENT?
- WHO IS RESPONSIBLE FOR MANAGING YOUR COMPANY'S IMAGE?
- HOW TO CHARGE FOR YOUR PRODUCTS / SERVICES?
- HOW TO DEFINE YOUR PRICING STRATEGY: PRICE POSITIONING
- HOW TO DEFINE YOUR PRICING STRATEGY: MARKET PRICING
- WHAT PRICE SHOULD YOU SELL AT? - COST-BASED PRICING
- WHAT IS A PRODUCT?
- HOW TO MARKET YOUR NEW BUSINESS?
- IS BUYING A FRANCHISE A GOOD WAY TO START A BUSINESS?
- HOW SOCIAL MEDIA HAS CHANGED WORD-OF-MOUTH
- HOW SOCIAL MEDIA HAS CHANGED PUBLIC RELATIONS
- WHAT IS BRANDING?
- WHY INCREASING SALES IS NOT THE SOLUTION
- HOW TO SELECT YOUR COMPANY NAME?
- WHY HAVING A WEBSITE IS ONLY THE BEGINNING?
- WHAT IS MARKETING?
- HOW TO MAXIMIZE THE VALUE OF YOUR SOLE PROPRIETORSHIP BUSINESS
- WHY SELLING IN MEXICO?
- LOW COST MARKETING INITIATIVES
- WHY IS PRODUCT DIFFERENCIATION IMPORTANT?
- hOW TO PRESENT OUR COMPANY
- WHAT IS THE DIFFERENCE BETWEEN MARKETING AND PUBLICITY?
- 50% OF YOUR ADVERTISING BUDGET DOES NOT PRODUCE AS MUCH AS THE REST
- RIGHT SELL AND OVER DELIVER
WHAT IS A BRAND EXTENSION?
Why is it important to have a brand? We regularly talk about this topic, and several reasons are given. But here is another one: because you can take advantage of your brand to market new products or services by doing a brand extension.
What is a brand extension? This is when a company decides to market a new line of products or services under a brand that has already been established. The company can produce the products itself or can choose to partner with other companies through a brand licensing agreement.
The explanation is not very clear? Let us look at examples.
When I started in marketing, I worked for one of the better-known brands in Canada: Kodiak. If you are a worker in Quebec, you know those branded boots. Plus, if you were in high school in the '70s and '80s, those yellow/beige boots were part of the unofficial school uniform.
The Kodiak brand was (and still is) very well known. But what do you do when you have reached that level of notoriety? De we simply make more boots? Certainly, this is the best option. The company is working hard to promote its products to have more sales by increasing its market share.
But who says more sales, says more investments: labor, equipment, raw materials, support team, etc. Of course, this is a nice problem to deal with: there are more sales, so everyone is happy right? Not always. Some investments are fixed and not variable costs. This means that if the increase in sales is temporary, some of the costs incurred will remain. At least, they will not come down as fast as the sales. This is the case with equipment. To meet the increased sales, do you need to have a new production line? The purchase of machines, conveyors, the increase in floor space, the layout of this space (electricity, wiring, heating/air conditioning, etc.) will remain in place even if there is a decrease in sales. It is a calculated risk, but a risk, nonetheless.
Is this the only way to increase sales? No! There is a brand extension. Let us go back to Kodiak, our example. When I was with the company, it was starting with its brand extension strategy. Up until then, Kodiak only made work boots. However, the clientele that bought work boots also bought other items at the same places, such as work gloves, work clothes, socks. The goal was to find manufacturers of the products we wanted to have and sell them the idea of ??having the Kodiak brand, which would help to sell more. In return for this use, Kodiak would receive royalties. This way of thinking about our diversification was less risky than the other option, which was to manufacture such products ourselves. The risk would have been very high, both from a financial standpoint, as well as with the learning curve, the achievement of quality, the risks to our brand erosion if our new product line was not up to par, etc.
Thanks to these agreements, men could go to work, dressed from head to toe in Kodiak branded products. But should we have stopped there? What about casual wear? What about women? Children? And recreational activities? When I was with the company, the Kodiak brand was on casual clothing for men and women, of course, work boots, winter boots, but also shoes, sandals, socks, gloves, and backpacks.
Several advantages come from this strategy:
This strategy is not without risk.
To be effective, you must choose your partners wisely. Ideally, your partners should be comparable to your business in quality, respect, presence, value, size (in some cases), and vision. The chosen company must put the same quality in the manufacture of your branded products as if you would make them yourself.
You must also be careful not to dilute your brand. Two main factors can be responsible for this: too many products on the market and too much variation in price positioning.
For the first point, it is important to determine the niches that will be targeted by your branded products because being everywhere is not a good idea. While the financial appeal may be attractive in the short term, being on all products is like being nowhere; we lose what we have worked so hard to build: our competitive advantage.
The other point is to stay in the same price positioning. If your products are at the high end of your market, partnering with manufacturers who make budget products lowers your brand value. For example, if your boots are at the high end of the spectrum price-wise, then your socks should not be the cheapest. This would harm your brand value.
Another essential point is the quality of the licensing agreement between the parties. You must clarify points like:
As a small business, how can this help you?
First, this illustrates the importance of having a brand. So, if you are wondering why to invest in your brand awareness, here is one more reason to start.
More importantly, this should give you ideas for your marketing strategy.
If you are in the field of service and you have built a good customer base, this network can be “rented” to professionals with complementary specializations. Of course, this needs to be done properly, and not all “rentals” are financial. For example, there can be referral reciprocity, which would help fill up your schedule. There may be other considerations. But no matter what type of agreement you make with your suppliers, from your customers’ point of view, you are offering an "all-inclusive" approach, even if the professionals are not part of your team. All the above considerations come into play; choose suppliers who have the same level of professionalism as yours. Who knows, if this division of your business grows, they might become employees or partners.
What if you selling products? There are very good arguments for having reputable brands from companies other than yours in your business. These help position your business. But imagine having your own branded product lines. Several manufacturers offer “white label” services, which means that the manufacturer will put your name on products. There will always be minimum quantities to be had, but for some of your top sellers, check your sales volume and see if they are approaching that minimum.
What would be the benefits of having your own branded product line? You would have “exclusive” products. No more price battles over the same products sold in different places. But this strategy is valid if:
White label manufacturers are sometimes offered by companies who have not yet achieved a dominant position in the market. This is one of the ways they can stand out and increase their sales volume. The good news is that does not mean the product is not good. But the company may be newer, and it is making itself known. Some companies position themselves in this niche; they make products exclusively for other companies. So, there are several quality options on the market.
If you have your own branded products, what should you do? Well, you should market them to your customers through your various communication channels. Another advantage is that the advertising so invested will benefit not only for the sale of the product but also will reinforce your brand as it has your name is on it. For example, imagine that you are negotiating with a paint manufacturer for a line of anti-rust paints with your name on it. When you advertise, instead of promoting "Tremclad" for example, you will have all the advertising for yourself. Yes, sometimes companies will have co-op advertising budgets because you are helping to build THEIR brand awareness. But, there are several advantages to doing it for yourself.
If you have any questions or comments, please do not hesitate in contacting me.
Stéphane Elmaleh-Riel, B.Ed., MBA