Understanding Brand Stretching in the Fashion Luxury Industry
Brand development is an essential aspect of business management that helps avoid stagnation and use the company’s potential. However, growth has risks that should be considered when undertaking expansion, stretching, or other types of brand development. One should remember that brand stretching can be performed only under certain conditions. These circumstances include:
- stable development;
- increased income;
- absence of potential problems;
- adequate resources;
- sufficient brand potential;
- an influx of customer base.
Moreover, it is necessary to consider the company’s philosophy, the range of products, and why customers like the products. Maintaining the fundamental principles of products is vital since the customer base may turn away due to significant changes. In addition, customers get used to certain features of the brand’s services or products. Therefore, it helps to build confidence in the company and customers’ trust since one knows it is necessary to turn to this company for certain services.
Thus, the changes introduced by brand stretching can violate the established principles of the company. The launch of the manufacturing of new products by the company implies certain risks since the brand lacks experience and established strategies. At the same time, gaining experience and building the most effective strategies can take a company’s valuable time.
Risks Associated with Brand Stretching Strategies
Luxury brand stretching includes a variety of development methods, including minor additions and significant changes. For example, a company may only redesign the packaging of its products, which can be an additional marketing incentive. It will remind existing customers of the product and attract new ones as people become interested in the renewed product. Package redesigning is the least risky method of brand stretching since the product’s primary characteristics remain unchanged, and only the packaging is updated.
In addition, luxury brand expansion may occur when the company gets a new target audience. In this case, the products do not change their main essence and purpose, but new units appear to meet new customers’ demands. An example would be a luxury menswear company that decided to start making clothes for both women and children. Consequently, the essence remains the same, such as sportswear, but women’s and children’s models may differ in color and size.
Furthermore, brand stretching can occur not by introducing new goods but by updating old services or products. Due to this, one avoids the risk of an outflow of the customer base due to changes in the product. At the same time, the brand name is used, and updated services are offered while maintaining the old principles. It can help attract new customers and has minor risks, although it should be carefully considered.
Finally, the riskiest type of brand stretching is completely replacing a product or service while retaining the brand name. The risks lie in the fact that the target audience, accustomed to one category of goods, encounters new ones while trying to maintain confidence and trust in the company. This type of stretching can be done only in case of emergency or stagnation when there is a critical decline in income or an outflow of customers.
Disadvantages and Limitations of Brand Stretching
To effectively construe the term brand stretching, it is necessary to analyze its pros and cons. The primary concern is the potential depreciation of key products when a brand launches new product categories. In other words, there are marks that one can immediately recognize by name and remember the products they make. It makes the brand unique and more focused, allowing all resources to be spent on the quality of a single product. Moreover, people tend to choose one firm for any product, and if their needs are satisfied, they will prefer this particular mark. However, if new product categories are introduced, resources can be spread over several aspects, resulting in none of them will stand out in the market. There will be several categories, but all of them will be of average quality and unable to compete adequately.
Advantages of Brand Stretching for Luxury Fashion Brands
However, brand stretching has many benefits that can help one achieve greater business success. The most apparent privilege is the simplicity of marketing a new product category due to the brand name. In other words, a potential client may ignore the appearance, for example, of new chips from a new company.
However, when a customer notices that one’s favorite French fry company has started making chips, the likelihood of a purchase becomes much higher. Accordingly, the next advantage is the reduction of risks when investing in new products of a well-known brand. Primarily, it is due to high confidence and trust in the company, which allows one to attract more resources. Finally, due to the name’s popularity, one can weaken or force competitors out of the market in the chosen niche.
The Future of Luxury Fashion Brands Without Brand Stretching
Talking about what will happen to luxury fashion brands in the future that do not adopt brand stretching strategies, in my opinion, formulates risks for companies. In other words, one might notice that the rate of change in the market is significant, and the positioning of companies is unstable. As a result, one needs to adapt to changes and be in constant motion and development. Therefore, those companies that do not undertake brand expansion risk falling into a state of stagnation and being destroyed by competitors. In addition, most luxury fashion brands have expanded their product catalog to several categories. Brand stretching allows one to cover a significant number of potential customers and attract the attention of new ones.
Reference
Massi, M., & Turrini, A. (2020). The artification of luxury fashion brands: Synergies, contaminations, and hybridizations. Springer Nature.