Extending your brand by optimizing your customer relationship

Scott Davis, Cathy Halligan
2002 Journal of Consumer Marketing  
Notes that the role of brand as more than just a marketing communications icon is increasingly obvious to leading businesses. Brand drives nearly two-thirds of customer purchases and impacts nearly every function area of the business. It stands to reason, then, that extending the equity of the brand will fuel growth while allowing the business to outpace competitors. This article examines the positioning considerations that will enhance the effectiveness of brand extensions. What is crucial as
more » ... What is crucial as part of the underlying strategy is consideration of the organization's brand customer relationship and how extensions serve to broaden it. It requires combining a strategic view of the entire organization's business drivers with principles and models from traditional and retail marketing to define new tools that will make more of its total customer base. The Martha Stewart brand, synonymous with the notion of raising the quality of living in and around the home, drives diverse and complementary publishing, television, branded merchandise and retail businesses. The largest selection of Martha Stewart branded merchandise ± over 3,000 products ± can be found exclusively at Kmart in the USA and Zellers in Canada. Far fewer products, 1,200, are featured in the company's retail businesses: its catalog, Martha by Mail, and the Internet site, marthastewart.com. The largest segment of its business, representing over 60 percent of the revenue base, is publishing: magazines, books, the syndicated askMartha newspaper columns appearing in 225 US and Canadian publications weekly, and the radio show, broadcast on 285 stations in the USA, covering 93 percent of the total US market. These businesses are diverse, but the Martha Stewart brand is the key asset optimizing the value of the franchise. Martha Stewart Omnicom (MSO) is one in an emerging category of companies characterized by multiple customer contact points, complex product, service and content offerings, and multi-layered advertising and margin-based revenue structures. These companies require new practices in how they develop and manage their most strategic assets ± their brand and their customer base. Martha Stewart's success has largely been due to the understanding that growing the value the brand represents involves more than extending the The research register for this journal is available at
doi:10.1108/07363760210414916 fatcat:lqfgr5dgafaspaxqruoxaaoeeu