Since my blog post about Rights and Wrongs of Brand Extension, I have had lot of interesting discussions on this topic. Some very good thoughts came forward and we were able to classify all the brand extensions we talked about in right and wrong buckets using the three things mentioned there – creativity, innovation and link to existing product line. One point that again and again came forward, which is also the reason for me writing this post, was how a company that had wrong brand extension could have done it correctly? So let’s pick the two wrongs mentioned in the previous post – Amazon and Dell.
Amazon missed two (of the three) very important things in its brand extension, and that were the link to the existing product line and innovation. Here’s an online book store that got famous for its long tail and recommendations. Logically thinking, brand extension for this online store would have been selling products where the long tail and recommendations matter the most. Another logical brand extension would have been showcasing products similar to books to customers who came to their site looking for books. This suggests Amazon should have evolved into an online store selling and renting (in some cases) books, music, videos, computer and video games and software. I think by keeping this link to existing product line in mind, they could have fixed brand extension to a large extent. Trying to sell products like shoes, jewelry, grocery and pet supplies from their online store just broke this link and made it loose its essence. One could argue that this could have limited Amazon from going into a large part of 35 product categories they are involved in today. Well I think, keeping Amazon the extended book store to the products suggested above and spinning partner stores for these other product categories would have been a better idea. Amazon could have had distinct links to these stores from their original store landing page and search results in order to use the credibility and dependability of Amazon, may be shared the shopping accounts and user information and applied some of its innovative shopping experience to these other buckets. The important thing to note here is the segregation to prevent bad experience for a customer coming to the book store.
Another area that Amazon could have fixed during brand extension is innovation. Amazon, which rided on its innovative stinct all through the dot com boom and bust came up with no major innovation in brand extension. Along with creating an extended book store and partner stores, one innovative step Amazon should have taken in brand extension is segmenting its stores more on the customer intelligence and less on product categories. For example, a customer looking for Mystery novels would feel Amazon is a store for me where I can find all Mystery based books, videos and games to buy or rent, a community to get involved with others with similar taste and an extended search feature with categorized results around what I am looking for. Amazon does it to a great extent, but its not well meshed across products due to the wrong brand extension.
Moving on to Dell…I know lot of people believe that Dell did not fly off with electronics because Dell’s primary customer base was enterprises and not home customers. But I think, if Dell would have brought the kind of innovation and creativity they brought in selling computers in the field of electronics, they would have done much better in their brand extension. Dell evidently missed creativity and innovation in its brand extension to electronics. Dell is known for two things – Direct marketing to the end customer and build (or configure) your own personal computer. It went on to brand extension to electronics, a somewhat natural next step for the biggest computer maker in the World after already extending its brand in servers, storage and printers. It did link back to its computer product line by selling directly to the end customer, but the build your own stuff was not there. Well if you are Dell, you got to have that personalized experience in there to satisfy your customers.
How about trying to add it to electronics? I think it will be really creative if you ask your customer to take steps with you to build a digital camera instead of asking them to choose one from the given list of cameras. Literally speaking you don’t have to build one for each customer out there, what you can do is start from the most basic feature (say megapixels) and provide options (like optical zoom, digital zoom, screen size and memory type) to choose from to reach to a final model. It’s basically bringing the customization experience from the personal computers and applying it to electronics. In order to make this happen, Dell will have to (or make the equipment manufacturer they are partnering with) support enough options in each category to meet the customer needs. If Dell is successfully able to do this in electronics like cameras, MP3 players, televisions and so on, it will be a real innovative step to empower customers configure their own electronics leading to a successful brand extension.
Exercise to the reader ;-) please send me cases of brand extension, both successful and unsuccessful, which you think contradicts my thinking on this topic.