Brand extension doesn’t click

Last week Jack Dee announced to the world that he didn’t like finding Venessa Feltz’s hair extensions lying around the Big Brother house. Similarly, Lego has had problems with unwanted extensions recently in the form of watches and clothes. Customers haven’t liked what they’ve seen and some pretty poor company results have resulted.

Fundamentally Lego’s roots lie in bricks that click. The core to a brand that has recently become increasingly difficult to understand is a simple, unremarkable moulded plastic brick that clicks together with other bricks, to become something only a child can dream up. Parents may purchase the brick for its utility in improving hand-eye co-ordination, but to a child it’s about seeing the physical manifestation of what’s going on in their own imagination. Lego’s essence is about “imaginative construction”.

In an era where children are becoming more and more demanding, toy purchasing is now driven more by the child than the parents. It’s an added bonus if a parent feels good about the purchase as well.

Lego’s version of seeing the brand visible in the everyday family landscape has led them to extend into areas that have less and less to do with imaginative construction. Visibility seems to have been taken too literally in the family context, rather than the brand being there when relevant and where value can be added through its core benefits.

Brand extensions can be good vehicles for adding shareholder value if they fulfil a customer need through the brand’s core competencies and values without diluting the brand. Extensions that appear in unwanted or misunderstood situations tend to receive little sympathy from customers and shareholders alike.

Lego beware. If you want to retain the crown of Fortune magazine’s toy of the century in the next hundred years, be true to your brand essence and use extensions with care. As an irritated Jack Dee showed by nominating Vanessa for eviction, unwanted extensions can lead to rejection by those closest to you.

Mark Gilmour

Senior consultant

The Value Engineers

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