Monday, 22 November 2010

Advantages of Brand extension and risks of line extension -National Geographic, Ferrari and Aston Martin’s Cygnet 1.

The shopping district of London’s West End is now in full flow. Its Christmas Season started several weeks ahead of the official Christian season ahead of Advent next Sunday.

The Christmas street lights of Oxford Street and Regent Street take premier position in the capital’s lights. This year Regent street promotes the Narnia films.

The crowds are out in force looking for Christmas gifts for friends and family. Opposite the flagship toy store Hamley’s in Regent Street are two relative new kids on the block that have now established a very strong presence in the West End scene.

Both are examples of brand extensions where their brand name is placed on a variety of goods and gifts which themselves have become impressive revenue streams for their organisations.

The iconic yellow-framed National Geographic magazine has extended its brand in a store selling branded toys, clothing plus a coffee shop.
Click for on line for National Geographic if you can’t get to Regents Street.

Just a few street numbers from the National Geographic’s store is the Ferrari store.
Ferrari’s branded products are described by the Modena HQ based luxury car manufacturer as “solde trovati” –found money.

This revenue stream represents allegedly some £ 1 billion from their retail and licensing operations. The Regent Street store is one of thirty Ferrari operate.

Just to put this second ‘found money’ revenue stream into perspective the sales of Ferrari cars is £1.5 billion.

On sale in the shop was a wide array of licensed goods watches, bath robes, golfing towels, a laptop, trainers, phones etc. Ferrari red goes well at this time of the year when red is a Yule-tide colour.

No doubt they might come up with an adapted bathrobe with white cuffs for an upmarket Santa Claus outfit. Click for on line Ferrari store if you can’t get to the Regents Street Store.

Not to be outdone by the stores of the West End the Top stores of the Knightsbridge district such as Harvey Nichols and Harrods are disporting their Christmas campaigns.

Harrods shop windows have taken theme of Peter Pan with one incongruent exception. Aston Martin has a window display of their eco responsible Cygnet car.

With models such as the Vantage V8 emits 320 g of CO2 per km they will fall foul of EU regulations new emission standards due to come into force in 2012.

For average car emissions those who exceed 130 kg of CO2 per km will be levied fines. Hence the Cygnet is being introduced into the Aston Martin’s stable.Click for on line Aston Martin if you can’t get to Harrods.
During 2011 Aston plans to produce 2000 of these young chicks.

Ferrari is able to ‘dilute’ their poor CO2 emissions under the balancing contribution of the volume of smaller cars in their parent Fiat Automotive group.

Aston Martin as a single brand organisation and does not have such a strategic option.

Aston has neither the funds, time , core specialism or production capacity to manufacture their own economy car to meet the 2012 emissions deadline. It has therefore chosen to import and adapt Toyota’s IQ mini car.

The risk to Aston Martin is whether the sales of the Cygnet 1 line extensions could damage the Aston Martin brand image as an elite, high performance hand-made British icon. Time will tell.
Click for details of TACK International‘s Marketing for Business Professionals.

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