The implications for brand extension when the extension is later sold: using member perceptions to investigate brand extension

Heading into the third millennium much has been written about the effects of branding and in particular, brand extensions, on equity. However, little research has examined the impact of the sale of a brand extension. Further, little is known about the impact of brand extensions in organisations that have on-going members rather than customers. Subsequently, this paper examines the effects of a company selling off a successful brand extension on the members' perceived brand equity. The members' perceptions of the parent company and the newly sold brand extension were examined through a series of 21 focus groups throughout Victoria. The brand extension studied did have clear, beneficial links with the core brand. However, the sale of the successful extension introduced confusion into the minds of the members, causing damage to not only the core, parent brand but also to the previously successful extension. Upon analysis, it appears that the key linkages between the core brand and its extension were not explicitly addressed. That is, while the links were there, they were not leveraged. At a practical level, the firms' marketing activities should explicitly leverage the key characteristics of the brand to maximise the success of an extension.