How far can you really extend a brand?

I recently read an interesting article on one of my key interests – the motor industry - and how manufacturers are extending their brands in a number of ways to try to appeal to as many audiences as possible.

As all car fans will know the master of this, but certainly not unique, is Volkswagen. Did you know for example that the Volkswagen group manufactures brands as diverse as Skoda, Lamborghini, Suzuki, Audi, Bugatti, Seat, Porsche and Bentley (along with many more, including Volkswagen itself of course!).

Now, with such a wide range of brands Volkswagen has managed to create a super-group of cars which appeals to a wide demographic. And, with many of these cars built on the same core platform Volkswagen saves significant sums in the R&D and manufacturing processes. It’s a win-win really?

But, does this approach always work or does it dilute each brand and product making them a jack of all trades, but a master of none? Jump into a Bentley Continental (hand-built excellence) and you will see parts, some quite significant, which are shared with cheaper brands in the portfolio. Now, if I have just spent £160k on a car, do I really want to be pressing the same buttons as the road warrior in a mass-produced ‘box’? Sorry, not being a snob but the answer is no.

Also, how does this hierarchy impact on the marketing and product portfolio of each brand? In theory, each brand has its own target demographic and never the twain shall meet. But in the real world is this right and don’t the different brands sometimes step on each other’s toes? Well frankly, yes they do.

By trying to push a certain demographic to a particular brand aren’t they making grand assumptions which don’t always hold water? I might be a certain age, gender, live in a certain area that doesn’t mean I want to drive a brand of car which is typical of my demographic. Look at the latest ad for the VW Polo, all modern, funky salsa dancing for a car which let’s be honest is a bit ‘safe’ and predictable – wouldn’t that ad better suit one of the Seat cars? After all Seat is the brand which is supposed to have ‘emotion’. Talking of Seat and their emotion, their latest motorway cruiser, the Exeo, is based on the old Audi A4 – now how does that position a brand which is supposed to be targeting buyers who enjoy driving and want something different from the norm – confused? I am.

At the end of the day the Volkswagen Group is a great success and looking at their global P&L they seem to know where they’re at! However, for their marketing teams it must be a nightmare trying to shoehorn a particular car into a niche segment and being restricted in its product development by what other brands in the portfolio are doing. Sometimes, trying to be all things to all men can be a mistake and we shouldn’t assume that what works for one member of a demographic will necessarily work for another – under developed market segmetation? Or a drive for market domination at all costs? What do you think….?