BRAND EXTENSIONS STRENGTHEN BRANDS
The more ways a customer experience the delivery of a brand promise, the stronger the brand connection. Well-managed extended brands build brand loyalty. For example, having great experiences with Samsung mobile phones as a young adult can influence your choice of a Samsung washer and dryer later in your life.
Apple is enjoying the fruits of an attractive extended brand. Barron’s recently reported on PiperJaffray research indicating that among 6,000 US teenagers, in Spring 2018, 82% said they own an Apple iPhone, while 84% said they intend to buy a new iPhone the next time they buy a mobile phone. Compare these numbers to Spring 2014, when about 60% of 6,000 US teens said they own an iPhone, and about 66% said they intend to buy an iPhone.
Additionally, PiperJaffray asked about Apple Watches. Of the 6,000 teens in the study, 20% said they already own an Apple Watch, while 20% said they intended to buy an Apple Watch. Considering that the smart watch category is still taking hold, these are respectable numbers.
A favorable experience with an iPhone and/or an Apple Watch and/or an iPad increases the probability the same customer will by an Apple laptop. Apple is building an over-arching power brand by connecting with younger cohorts. As Barron’s states, “Getting more people into the Apple network early can be extremely valuable, especially if they sign up for services that make them unlikely to switch to other phones. And, finding that interest in the Apple Watch is also growing would only help.”
Amazon is another brand that is building a strong branded multi-product and service portfolio. According to The Toronto Star, Amazon has strong relationships with Millennials and older customers because these demographics have access to financial services. Many Gen Z individuals are still using the bank-of-mom-and-dad.
“Teenagers, otherwise known as generation Z, with their lack of debit and credit cards, their absence of bank accounts and their overwhelming preference for actually putting on clothes and going to physical stores to buy things they could purchase online, pose a big challenge to Amazon. Amazon’s answer: The internet behemoth is in early discussions with banks including JPMorgan Chase Co. and Capital One Financial Corp. to create a product similar to chequing accounts. Amazon aims to tailor the accounts to appeal especially to youngsters and those who own no plastic in their wallets.”
Airbnb is creating a portfolio of branded products and services for young people including rental apartments. The brand has created Airbnb Experiences with Generation Z and Millennials. CEO Brian Chesky sees Experiences as the future, as Millennials and Gen Z customers live in smaller urban spaces where amassing things becomes superfluous. It is the experience that matters. Currently, Airbnb offers 5,000 Experiences, and Mr. Chesky says there are 55,000 on the waiting list.
Extended brands that offer multiple product and service experiences strengthen the customer’s commitment and conviction in the brand promise.