Extending service brands is not significantly different from extending brands found on products. I have had a number of clients that wanted to extend their service brands. In general, services provide experiences and it is the understanding of what these experiences are that form the basis of what is extendable. Of course, people have experiences with products too so again it is a similar exercise to study service brands.
NBC asked me to help them extend the Today Show brand. Prior to conducting any research, the company provided a brief of the situation of the show at the time. Unlike most products which change in only minor ways over time, services like a television show can change radically. There are different hosts, different competitive shows, different changes on competitive shows and different audience members over time. Thus, the important task is to identify what the brand “owns” in a basic way rather than a cursory way dictated by temporal circumstances. The underlying benefits and experiences people received from watching the show appeared to change little and there were core elements that remained since the show started.
To illustrate how service brands can enter new categories, here are three service brand extensions leveraging different elements to enter the same category – airport convenience stores. Historically, many of the general shops in airports that carried newspapers, magazines and packaged food had generic branding. This has changed as companies have extended their brands in a logical way to open stores in airports.
Other Brands Taken from Products to Services or Services to Products
Fender is a manufacturer of guitars. They launched a service to teach guitar lessons to potential guitar buyers. Some companies can move from a product to a service especially if it enhances the chance that it will increase product sales.
Another famous brand that long ago went from products to services is Disney. Originally making animated movies, Disney moved into service areas such as theme parks and cruises. Note the size of the categories Disney selected for extending their brand. This enhances the probability of being successful even with a small share of the cruise market.
The Westin Hotel chain launched a successful brand extension, The Heavenly Bed which took them into a product category from a service. Historically, hotels at the time had beds and bedding that were of commercial quality, meaning cheap. Westin redesigned their beds to be comfortable and plush and introduced them into their chain. Westin's internal survey of overall guest loyalty and satisfaction increased dramatically. The Heavenly Bed reached near iconic stature, and sparked a bedding revolution in the hotel industry. Thousands of guests insisted on taking the all-white bed and linens home. It was so successful that competing hotel chains were forced to offer their own plush bedding available for sale to customers. This brand extension not only generated additional income, but enhanced the parent brand’s reputation rather than diluted it.
Amazon is a clear example of a brand that redefined itself over and over. Starting as an online bookseller competing with brick and mortar stores, it moved away from the simple definition of online bookseller to a larger definition of the business of the brand – online ordering and fast delivery business. Every type of product is now sold by Amazon and delivered online by streaming (movies and music) as well as delivered at home. A further redefine moved Amazon into brick and mortar stores.
As mentioned in the introduction, the underlying premise of brand extension was stated: In any organization, the opportunities for growth depend on how management defines what business they are in. The revised definition has allowed Amazon to expand its business dramatically. There would be no growth without the redefinition which led to newer Amazon brand extension products (Alexa) and services (Amazon Go Stores).
Motor Trend Channel
Motor Trend is a well-established automotive magazine. Unfortunately, all print media have been in decline for a number of years. Without re-defining what business they are in, the company was headed for extinction. Instead, the company launched the Motor Trend TV Channel. The President of the company said: “Motor Trend Network represents the next great content innovation for (an) underserved audience. With this network, the Motor Trend app, and MotorTrend.com, we’re going to provide deeper, richer, more engaging experiences for consumers on any device, any time.” Sometimes brand extensions are a necessity to stem the decline of an existing business. In every case, the goal is still to achieve growth by entering new categories.