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Excessive Brand Extensions Can Dilute Your Brand

by Susan Gunelius on September 2nd, 2007

Last week, I published a post called Top 5 Risks of Brand Extensions.  The number one risk on the list was: too many brand extensions can dilute your brand overall.  Also this week, Mark Ritson published a post on Branding Strategy Insider that provides a great example of that risk.

In his post, Big Mac or Coke: Who’s Got It Right?, Mark presents two different branding strategies being used by McDonald’s (NYSE: MCD) and Coke (NYSE: KO).  While McDonald’s is dropping businesses and brands to focus more heavily on their core McDonald’s brand, Coke is doing just the opposite.  Coke is in the midst of a flurry of brand extensions in an attempt to offset the changing habits of consumers who are looking for healthier alternatives to carbonated sodas.  Mark poses the question: which strategy is better?

My initial reaction would be to prefer McDonald’s more focused branding strategy.  I’m not a fan of over-extending a brand, because I think it leads to oversaturation and ultimately confuses customers.  I think over-extending a brand can dilute the brand’s strength and image leaving it open to attacks from a myriad of competitors and angles.  However, a too narrowly focused branding strategy puts you at risk of missing opportunities and allowing your brand to grow and thrive.

So which strategy is better?  Naturally, striking a balance between the two might be ideal, but every situation is different and needs to be analyzed to ensure the most appropriate strategy is implemented.  Bottomline, make sure you do your research before you jump into too many brand extensions or turn your back on too many branding opportunities.

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POSTED IN: Brand Extension