How Brand Extensions Strengthen Brands

Larry LightFebruary 16, 20214 min

During a pandemic might not seem to be a good time to create a brand extension. However, creating a brand extension in uncertain times is a smart move. Some say that brand extensions weaken brands. This is wrong. Well-managed brand extensions strengthen brands.

A really good brand extension shares character with its parent brand. At the same time, brand extensions provide a relevant and differentiated benefit from the parent. A really good brand extension will extend the frequency with which customers experience the overall brand promise. Repeated positive experience with the brand family strengthens a customer’s conviction in the brand promise. The increased brand connection, along with more frequent use, increases customer loyalty.

An excellent example of the power of a brand extension is Tide. Original Tide powder is now extended across different product types, different customer needs and different formulas. Tide’s website sorts Tide’s brand extensions by type (Pacs, powder, liquid, stain remover, etc.), needs (deep clean, odor removal, whitening, etc.), and products (Tide Hygienic Clean Heavy, Duty 10x Collection, Tide PODS Odor Defense, Tide PODS Plus Febreeze, etc.)

How Panera Extended Its Value

Panera implemented Panera Grocery on April 8, 2020. Panera Grocery has been an extraordinary companion to Panera’s restaurants. Panera, the fast casual bakery-café with pastas, sandwiches, soups and specialty beverages, went full tilt into generating a brand extension when coronavirus hit. Panera saw an immediate customer need.  This customer need complements the bakery-café while addressing customers’ new behaviors.

The guiding idea behind Panera Grocery is making good, clean eating available to all. Through Panera Grocery, customers can buy high-demand grocery items such as bread, milk and fresh produce. Customers can also purchase Panera favorites such as sandwiches, soups and salads. Panera Grocery’s brand promise is “From Our Pantry to Yours.”

At its debut, Panera’s CEO, Niren Chaudhary said, “From limited choices on grocery shelves to the growing need to limit the number of trips outside of the home, it is an incredibly stressful time when it comes to putting wholesome food on the table, and we knew Panera could help.” Mr. Chaudhary continued, “With this new service, we can help deliver good food and fresh ingredients from our pantry to yours, helping provide better access to essential items that are increasingly harder to come by.” The upshot of these comments is this: Panera Grocery “… is just one of the ways that Panera has created to help people with an easy, wholesome meal everyone will love.”

Panera’s grocery items have prices comparable to grocery stores. This is because Panera buys in bulk for its in-store dining. Of course, in-store dining is moribund right about now. So, rather than have these wholesome foods go to waste, let’s offer these to our customers. This approach also keeps Panera’s supply chain in business.

Sara Burnett is Panera’s vice-president of wellness and food policy. Ms. Burnett told Canadian Press, “… the decision to sell groceries is a reaction to the unprecedented crisis our country’s going through right now.”

According to BXP Magazine, a packaging industry magazine, Panera is leveraging its existing supply network of clean ingredients. Panera Grocery helps keep Panera “… top-of-mind for its loyal customers by alleviating their concerns about the fragility of the food supply chain.” Additionally, BXP magazine writes, “Panera is able to further reinforce its brand message as a social champion of clean food and healthy eating.”

The Panera Grocery PR announcement said that Panera Grocery extends Panera’s commitment to items that are clean. Clean means, free of artificial preservatives, flavors, sweeteners and colors from artificial sources. As with really good brand extensions, Panera Grocery delivers the Panera brand promise in a different and relevant manner. Panera Grocery products are in “mindful packaging” with all orders sealed for added protection.

Panera Grocery is also available via multiple channels. Panera Grocery items can be ordered on the Panera app or website. You can select contactless delivery, Rapid Pick-Up, Drive-Up, Drive-Thru or Grubhub.

Panera introduced another new brand extension. Panera at Home is packaged retail products: soups, chili, mac & cheese, pasta, bottles of salad dressings, sliced bread, coffees, artisan brand and rolls. These are Panera favorites that a customer can buy at select grocery stores.  Panera at Home items are also available online at Shipt, Peapod, Amazon, Keurig and Instacart.

A survey by Innova, a global knowledge leader in food and beverage, found that 46% of consumers perceive restaurant-branded items to be a convenient way to have a restaurant experience at home. Innova calls this “omnichannel eating.” Panera provides Panera-labeled favorite items available across multiple channels.

Six in ten consumers surveyed by Innova want to know about the source of the food they are purchasing. Innova calls this need “transparency.” Transparency includes “ethical, environmental and clean label” demands. Panera already owns transparency. Panera promises “… a commitment to transparency and options that empower our guests to eat the way they want.” This statement meshes nicely with Panera’s overarching promise, “Food As It Should Be.”

Sixty-four percent of Innova respondents indicated they had found ways to tailor their life and products to their individual style, beliefs and needs. And, six in ten are looking for foods and beverages that support personal immune health. Panera states, “…(Panera) continues to find ways to be an ally for wellness to our guests.” With Panera, a customer does not have to compromise to eat well.

Brand-businesses that survive and grow throughout the coronavirus crisis have to be flexible. They must have a laser focus on their customers. They must use common sense.

Rather than build an entirely new brand in a crisis, a brand extension is a great idea. Panera is a terrific example of how brand-businesses can build their franchise during a time of general decline.

Contributed to Branding Strategy Insider by: Larry Light, CEO of Arcature

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