Sara Lee, Apple and Corona Show Success
These three brand extension strategy examples show a proven approach to growth, across products and categories. Brand extension can deliver several benefits, including:
- Leveraging the existing brand name means the extension capitalizes on existing brand awareness and imagery, e.g., for quality, reliability, service, etc., without having to prove itself in these areas initially
- Contemporizing the brand’s overall equity and image by bringing it into new, growing categories and or channels, such as online. Brings a sense of growth and expansion to the brand
- Making the brand more salient again, and reminding the consumers to purchase the brand in its core or traditional product categories
- Expanding the base of consumers who use the brand. These may be consumers who have positive regard for a brand, but who do not use the historical product or service categories
- Increasing the impact of marketing spending, i.e., economies of scale
A few of the disadvantages of brand extension include:
- Damaging the brand’s core business if the new product extension is not successful
- Damaging the brand imagery and reputation from lower product or service quality of the new product extension
- Diluting the value of the brand
In our experience, consumers are often more open to a brand’s extending into new product categories than the brand’s management team.
Brand extension strategy examples like Apple, Starbucks and Google are:
“Masters of brand extension because they are always moving into new businesses without changing their brand identity.”
Along with Apple, we’ll explore two additional brand strategy extension examples, Corona and Sara Lee.
Corona Brand Extension Strategy Example: Corona Hard Seltzers Along with Beer
Corona Hard Seltzers were launched in 2020, bringing the beer brand into the hard seltzer category. Fox News reported that Constellation Brands:
“decided to put the Corona name on the new seltzer due to the brand recognition.”
The timing for this extension was excellent as hard seltzer was:
“proven the most resilient segment within the entire alcoholic beverage category.”
Upbeat TV advertising invites consumers to go to a beach “calling your name” and say “hola” to the beach vibes of Corona Hard Seltzer, and “adios” to “whatever holds us back.”
In 2020, the Corona brand reported sales increases of $382 million, driven by both beer and seltzer products. Recently, the Corona brand announced that it is the official hard seltzer for the FaZe Clan gaming organization, with marketing tactics including cobranded merch, a national gaming tournament, localized consumer market activations, and more. Rene Ramos, vice president of experiential and lifestyle marketing, Constellation Brands, said:
“To successfully bring the iconic Corona brand into the esports world, we had to seek out the most prominent and influential team in the space. FaZe Clan’s approach to the sport and crossover culture will bring Corona’s refreshingly chill perspective to the game and FaZe Clan fans.”
Corona Hard Seltzer is competing in the highly-competitive hard seltzer category with hard seltzer specialist brands including:
- White Claw (from Mark Anthony Brands)
- Truly (from Boston Beer Company)
- Bon & Viv (from InBev, rebranded from Spiked Seltzer)
- Vizzy (from Molson Coors)
And with brand extensions from other beer, vodka and hard soda brands including:
- Bud Light Seltzer from Bud Light beer
- Smirnoff Ice from Smirnoff vodka
- Henry’s Hard Sparkling Water from Henry’s Hard Soda
Sara Lee Brand Extension Strategy Example: Sara Lee Premium Meats Along with Baked Goods
The Sara Lee brand was built on high-quality bakery products, with origins in frozen desserts, and its iconic pound cake and other frozen desserts. In 1949, Sara Lee founder Charles Lubin changed the company’s name to “Kitchens of Sara Lee” (his daughter’s name was Sara Lee). Sara Lee’s rich brand heritage in the sweet snacks and desserts categories is now Sara Lee Frozen Bakery, operating as a private firm with a wide range of foodservice and retail desserts, bought in 2018 by Kohlberg & Co.
The Sara Lee brand also successfully extended into fresh bread, and that business is now part of Bimbo. With Bimbo, the Sara Lee brand continues its “rich baking heritage,” offering Sara Lee-branded bread and bagel products. A recent Sara Lee Delightful bread stresses its taste and health benefits, while Sara Lee Artesano promises a bread that can build a better sandwich.
An initial brand strategy extension assessment might have limited the Sara Lee brand to baked goods, whether frozen or fresh, breads or desserts. However, Sara Lee long ago expanded the brand into Premium Meats sold in the supermarket deli. The brand’s richness and premium quality provided equity to bridge from desserts to meats. Now owned by Tyson Foods, Sara Lee offers turkey, chicken ham and beef products.
Execution of the brand extension includes this Chicago-specific example from the Sara Lee Deli website:
“It is time to celebrate some of the best things about Chicago including the beloved Chicago-style hot-dog, Italian Beef sandwich, the classic gyro, and Sara Lee® Premium Meats.”
The enduring power of the Sara Lee Brand and its successful extension into new categories beyond frozen desserts has outlasted the Sara Lee company, as the brand now is owned by three separate organizations.
Apple Brand Extension Strategy Example: From Computers to Watches
Famously starting in Steve Jobs’ garage, the Apple brand’s origins are in the personal computer category. The brand now operates over 500 retail stores and brings its powerful brand equity to many product and service categories, including phones, watches, TVs, tablets, podcasts and future categories including cars. The brand has a strong emotional connection with its consumers, described as “humanistic, beyond-business relationship…cult-like.” Other important brand equity attributes include “imagination, design and innovation.”
Recently, Apple announced that it would require apps to get user’s permission to track their activity. Recent TV advertising celebrates new products. According to iSpot TV, Apple’s spending placed in #87 compared to all other advertisers.
Historically, many of Apple’s brand extensions have been met with skepticism. In 2001, the original iPod received this review:
“Apple has introduced a product that’s neither revolutionary nor breakthrough, and they’ve priced it so high that it’s reminiscent of the Cube,” a post on MacSlash said.
The original iPhone was launched in 2007. Many didn’t see the appeal, including then-CEO of Microsoft Steve Ballmer:
“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.”
The Apple Watch saw similar response on its launch in 2015:
“The Apple Watch, when it was finally announced, looked like a rather attractive (if too thick) solution in search of a problem.”
Time has shown all of these products to be ultimately popular with consumers and significant drivers of Apple’s growth.
Brand Extension Strategy Examples that Don’t Work Out
Not every brand extension strategy is meant to be. From our experience, moving food and beverage brands into categories like clothing and furniture has proven challenging. Similarly, but not identical, it will be interesting to see how successful the Levi’s homeware launch with Target proves to be. The brand will be offering glassware, soft furnishing and table linens.