Instead of seeing yourself as a product brand, aim to become a concept brand.

In this article, we’ll explore how brands can evolve from product-focused to concept-driven entities by utilizing strategies like line extension and brand extension within the framework of brand leverage, accompanied by real-world examples.

Line Extension: Diversifying Within the Same Product Category

The first path to brand leverage is line extension, which involves creating various flavors, packaging options, or variations within the same product category under the same brand name. For instance, Danone expanded its yogurt line with light and fruit-flavored options. Most new products enter the market through line extensions. But how does line extension grow a brand?

• By diversifying the brand’s core promise (e.g., new flavors or aromas in jams and juices).
• By addressing a niche need (e.g., shampoos tailored to hair type, age, or scalp conditions like Elidor Shaping Protective Hair Cream).
• By offering complementary products. A brand tackling a specific consumer issue can create a full range of products to address it. For instance, a hair loss prevention brand might expand from shampoo to gels and hair dyes. Through line extension, the brand deepens its relationship with the same consumers by addressing similar needs in similar consumption scenarios. Strategically, the brand works on what it already knows well.

A successful line extension can expand the user base, add variety, revitalize the brand, bring innovation, and fend off competitors.

Brand Extension: Entering New Product Categories

The other form of brand leverage is brand extension, where a brand enters an entirely new product category.

The broader concept of branding allows for extensions beyond the initial category. It involves transforming products, giving them new forms, and adding both tangible and intangible value. For instance, it was feasible for Swatch to introduce a car brand. In this context, the focus shifts from product brands to concept brands (Rijkenberg, 2001).

Key Factors for Successful Brand Extension

1. Strong Consumer Perception: The brand must evoke a mix of tangible and intangible benefits and be highly reliable.
2. Transferable Equity: The brand’s core assets should seamlessly translate into the new category, with consumers recognizing and trusting the associated benefits.
3. Category Relevance: The brand’s values and benefits must align with the new category.
4. Competitive Advantage: The extended product or service must provide a perceived competitive edge to both consumers and the business market.
5. Sustainability: The brand and its parent company should be capable of sustaining competition in the new category over the long term.

Strategic Considerations for Category Selection

Choosing the right category to enter is critical and requires strategic planning:

• What is the allure of the new category?
• Can the company achieve leadership in this category?
• What profitability can be expected after market sharing?

The brand must ensure that the chosen category aligns with its image while addressing these considerations.

Nescafé: A Model of Brand Leverage

An exemplary case of brand leverage is Nescafé, which successfully introduced the world’s first instant coffee and has continued to extend its brand over the years.

By leveraging the above strategies, brands can transcend their product-focused origins and evolve into comprehensive concept brands that resonate deeply with consumers.

Nescafé: A Brand That Connects with All Segments Through Extensions

Nescafé, with its youthful and fun image, has built its foundation on the principles of fast, practical, and hassle-free service and continues to uphold these principles. It is a brand consumed in households across all socioeconomic strata (SES). Despite being a corporate brand, Nescafé’s product branding strategy ensures that it delivers on its promise of “real coffee taste,” making it a guiding brand in purchase decisions.

With sub-brands such as Gold, Classic, and Green Blend, Nescafé caters to different consumer preferences. For example:

• Nescafé Gold offers a smooth coffee experience.
• Nescafé Classic delivers a more intense coffee flavor.
• Nescafé Green Blend, a mix of roasted and unroasted coffee beans, promises a unique taste.

Through these sub-brands, Nescafé has captured diverse consumer bases, diversified its offerings, and minimized the risk of being surpassed by competitors.

Line Extension Example: Nescafé Falcı

Nescafé Falcı represents a line extension, offering the authentic taste of Turkish coffee with the practicality of quick preparation. While targeting a middle-aged and older audience, the purchasing decision is guided by Nescafé as the leading brand. Nescafé Falcı is further divided into three subcategories—plain, sugary, and medium-sugary—enabling the brand to appeal to a wide range of consumers with different preferences.

Sub-Branding Example: Nescafé Express

Nescafé Express is positioned as a delightful blend of coffee expertise and chilled milk, creating the perfect cold coffee experience. This line extension was introduced to make the Nescafé flavor more accessible during summer, meeting the consumer’s seasonal need for refreshment. As Nescafé remains the key driver behind purchase decisions, it serves as the guiding brand.

Brand Extension Example: Mycafé Coffee Machine

The Mycafé coffee machine, capable of making Espresso, Cappuccino, Black Coffee, and Latte quickly, is a successful brand extension by Nescafé. The decision to extend into this category was driven by the strong association consumers have between the Nescafé brand and coffee itself. Mycafé effectively capitalizes on this brand recognition, further reinforcing Nescafé’s presence in the coffee industry.

By strategically implementing line extensions, sub-branding, and brand extensions, Nescafé has not only diversified its portfolio but also solidified its position as a versatile and innovative coffee brand across different consumer segments.

In conclusion, it should be remembered that each strategy has its own advantages and disadvantages. The choice of brand policy is a strategic decision, with the goal of deriving long-term benefits from the brand.