Can a medical device company launch, say, a line of paints or jeans? Can a dress designer also sell computers? Should they? And how would a company assess possible customer response before they started down a path? It turns out companies can extend their brands in varied directions if they’re prestigious. While consumers tend to favor brand extensions that fit with their generally accepted perception of the company, prestigious brands don’t have to play by the rules of customer perception. They can launch seemingly unrelated products and still find success. Prestigious brands tend to have an advantage in brand extension. Would you buy HP wine? What about an Apple car? An electric Apple car? An electric Apple car with iPad like controls? Apple is generally thought of as the more prestigious company. It could probably sell cars, wine and chocolates successfully. Though, it’s hard to imagine Apple chocolates.
Brands that are perceived as more functional are less likely to be successful at brand extensions. Virgin Airlines successfully sells wine and music under its brand name due to the popular notion that it’s a prestigious brand. It can successfully launch products that another airline couldn’t. But that doesn’t mean that companies are failures if they can’t launch irrelevant products. If Intel started on a path with designer dresses, chances are there would be furrowed brows all around. But if it got into the business of chips that cause clothing to show 3D video while being worn, well that fits the generally held perception of Intel as a technology giant. And 3D video on clothing would be nice.
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