There is no trade-off between building a brand and boosting sales. These two strategic intents are highly complementary in fostering the corporate presence in the market. The more we sell, the more likely are people able to experience the brand. And the more people like our brand, the more likely they will continue to buy from us. Promoting sales is a daily and ongoing concern to any corporation. The three most common branding strategies corporations adopt to expand their market presence are Line Extension, Brand Extension, and Flanker Brand. These branding strategies are not mutually exclusive and can be orchestrated to work synergistically to achieve a stunning business result.
A brand often consists of several product lines. For many years, BMW used to operate with merely three product lines – the 3 series, the 5 series and the 7 series. The 3 series was a smaller sedan, relatively more affordable, and probably catered more to younger drivers. The 7 series was the top of the range, a luxury sedan for accomplished individuals. The 5 series was positioned somewhere in between the previous two product lines. These three key product lines still account for a significant share of the total sales of BMW worldwide, yet the corporation has stretched its product portfolio to cover a much broader spectrum. From a production and operation perspective, it would be much more manageable with just three product lines. However, to preempt or counter competitive moves, a visionary brand will challenge its status quo and surprise the market with new offerings. The new product lines of BMW are not only designed to fulfill the different demographic segments. The decision-making of modern consumers is a complex process that will take various factors into consideration. This is particularly true for high involvement and high ticket items such as automobiles because a car is more than a means of transportation – “You are what you drive” can be a dictating psychological factor that motivates the consumer to aim at a particular car model.
Product line extension is very common to fast-moving consumer goods. Introducing new packaging and new flavor are usually a combination of push and pull factors. In a nutshell, with a more abundant product assortment, a brand will legitimize the occupation of more retail space [both online and offline] and provide compelling reasons for more consumers to buy or the same consumers to buy more.
Toyota is an established brand and is famous for its reliable and practical image. To compete in the premium market segment, however, it may require more than introducing a premium product line, as Toyota has already occupied specific product and user imageries in the mind of the consumers. As a result, Lexus was launched in 1989 to allow the corporation to enter the premium vehicle market without any baggage. This is an excellent case of how a flanker brand can add tangible business value to a corporation. The successful launch of a flanker brand will enable the corporation to escalate its business growth both in terms of breadth and depth. Besides offensive moves, a flanker brand strategy can also help defend a brand’s market position to fence off any new opponents. For example, the introduction of the COOL brand by Watsons Water was precisely a strategic response given the increasing penetration of low-cost rivals into the bottled water market in Asia.
Montblanc is synonymous with premium and stylish writing instruments. However, if it had restricted itself to selling pens only, it would not have been such a successful and lucrative brand today. Montblanc is still committed to creating new styles of pens, but customers now go to the Montblanc boutique to shop for other merchandise, such as leather goods, eyewear, watches, and jewelry. Having its own physical stores and serving the same group of discerning customers are not the only factors that contribute to the success of Montblanc’s brand extension. Most importantly, Montblanc was able to re-position its brand from just about “a writing instrument” to “writing your own success story”. The key to the success of brand extension is the ability to offer products and services in a new arena and yet staying true to its core brand values and promises.