The New Strategic Brand Management, 5th Edition

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Multi-brand portfolios

There are limits to brand extension: a brand is not a catch-all. BMW values attract only 20 per cent of the premium car buyers worldwide. BMW refuses to dilute its brand and in order to grow it went international. It also bought the Mini and Rolls-Royce brands.

As an alternative to brand extension, the other way in which a company can grow is by creating new brands to meet the demand that existing brands cannot satisfy. But it takes courage to launch and position new brands.

It takes courage because, at a time when extensions are the order of the day, it is difficult to admit that even a mega-brand has its limits. Companies prefer to attribute failure to production problems so that they can try – and fail – again. ...