Sometimes there just isn’t anyone you can acquire to extend your coverage of the market. Either your competition is entirely incompatible with your organization or it would just be cheaper to start from scratch than incorporate another entity. In this case, it is easiest to establish an entirely new brand for the new segment of the market or category of product.
Many companies make the mistake of extending their own brand to cover new products. This can be dangerous because it can lead to consumer confusion, decreased brand equity, and a lower level of customer loyalty in the market. Take the example of Wilson Sporting Goods. Wilson is active in almost every sport, but remains most well known for its tennis products. By entering other sports like baseball and basketball, Wilson runs the risk of confusing its customers. Its strength lies in tennis, why would anyone want to buy an expensive baseball bat or basketball equipment from a tennis company?
The other end of the spectrum is Toyota. Already successful with economical family cars, Toyota wanted to target a younger, edgier segment of the market. Rather than creating a new line of Toyotas and forcing a change to their existing brand image, Toyota created the Scion brand. Still made with the same technology and designed by the same engineers, Scion is marketed towards an entirely different segment of the market. One juxtaposition of a Toyota and Scion advertisement, or just a side-by-side comparison of their cars, shows the difference.
Extending your brand over new products or a new market might look easier, but it can be dangerous for your company. You already know how to build a strong brand, else you would not be in the position of expanding at all. Take the time to practice your marketing skills and build a second (or third?) brand under your corporate umbrella. It will be well-worth the investment!
