Marketing gurus would certainly call it suicidal! Because classic marketing theory suggests that a new brand must first be made to stand firmly on its two feet, before it can give birth to or carry another new born on its shoulders. And this process of building sufficient equity could take much, much longer than 9 months, perhaps years too.
So, what does it take for a new brand to be ready to roll out an extension, leave alone an unrelated one?
First and foremost, a new brand must enjoy a sufficiently high awareness level within its intended target group, starting with spontaneous and them slowly moving the needle on to top-of-mind. Then, having gone through the rounds of trial and repeat purchases, it achieves some degree of brand preference vis-à-vis the established players in its segment, leading to a reasonably good regular user base that keeps growing month on month. But, beyond just sales and market share, a brand must ascertain, whether or not it has been able to build a position and image, strongly entrenched in the minds of consumers, as well as the stated brand values. This ultimately will dictate whether or not, consumers buy into the brand extension when introduced.
But what about the case of an unrelated extension under the same mother brand?
It would be pertinent to discuss a live example of a recently launched brand that courageously embarked on an unrelated brand extension, with surprisingly good results.
The brand is LuckyStars – a free to download mobile app for Android and iOS, launched about 9 months ago. Registered users can win big gifts for free, by playing lucky draws held practically everyday. Participation in the draws is free and there is no purchase of any kind either. Everything is absolutely free.
In a short span of 9 months, LuckyStars crossed 600K downloads and currently has a Daily Active User base of over 100K – an incredible performance, given that the brand has only been promoted in the digital and social media. The other reason for the stellar growth is the big, valuable gifts given away to winners of the draws: a Vespa scooter, Bajaj motorbike, Samsung & Panasonic LED TVs, Digital cameras, iPad, iPhone 6S and 7 Plus, Smart watches, Music systems and Firefox bicycle, to name a few.
About a week ago, LuckyStars launched its E-commerce module called ‘Deals’, housed within the app. It offers users various kinds of deals, across a niche range of branded products: Deals of the Day, Deals of the Week and Deals of the Month. Further, going forward, certain products featured as gifts in the lucky draws will be offered to non-winners, for purchase at special rates. So, if one didn’t win the product in the lucky draw, but really want to own it, you can do so at a good price at ‘Deals’.
The advantage that Deals enjoys is that it caters to a readymade captive audience built by LuckyStars for its Draws product. Although it is rather too early to send an out and out success verdict, the initial response has been extremely encouraging in terms of offtakes. What’s more is that LuckyStars has also rolled out a Loyalty Rewards Program called Stars, which over time will be linked to Deals, enabling users to redeem the Stars earned against purchase of products.
So, while Deals may be an unrelated extension, it has seamlessly been integrated with Draws and the Stars Loyalty Rewards program, thereby giving the mother brand a shot in the arm, so to speak. The key reason why LuckyStars has been able to successfully introduce such an unrelated brand extension is the fact that there is a captive audience ready to be tapped.