Martha Stewart - Extending the Brand
• It extends your target market. Gillette's Sensor for Women leveraged the definition of the company's business and its brand benefit of the "clean shave," effectively extending its target market from only men to all adults who shave.
• It extends your business definition. In launching IBM Consulting, IBM changed the definition of the business it was in from technology-based products to technology-based solutions.
• It extends your point of difference. By introducing the benefit of guaranteed videos in stock, Blockbuster increased its points of differentiation. So has Federal Express by establishing a new drop-off time of midnight for packages in some locations.
• Extending the entire positioning. This usually occurs when a business is trying to enter a new market for the first time with a brand whose strengths are recognized beyond its current target market and positioning. The introduction of Caterpillar Footwear extended Caterpillar's reputation and brand strength from the heavy equipment market. This can be risky, but if done right, it allows a company to diversify its range of branded products and take a true portfolio approach to managing its brand.
Deepening the Customer Relationship
Clearly, the proposition of extending a brand and its equity is closely tied with the customer relationship and how you'd like it to develop. Defining and acting on that relationship, however, is more problematic today than ever before.
Evolving business models involve:
• multiple customer touchpoints;
• an increasingly complex range of products, services and content; and
• multi-layered advertising, commission and margin-based revenue structures.
These demand new practices in managing and optimizing the customer relationship. To achieve customer relationship optimization (CRO), a more holistic and enterprise-level understanding of the brand as the amalgamation of all customer experiences is needed, along with a strategy for managing multi-faceted relationships. Further, it requires a clear understanding of the value the customer wants to derive from the enterprise—and the value the enterprise derives from the customer.
Scott Davis is managing partner of the Chicago office of Prophet and Cathy Halligan is a director with its San Francisco office. Prophet is a strategic professional services firm specializing in brand leadership and brand-driven growth. For more information, visit www.prophet.com.