2004 TippingSprung Survey of Top Brand Extensions

Summary Report
25 September 2004

Brand extensions seem to be everywhere these days footwear from Harley-Davidson, a baby stroller from Jeep and, yes, even the kitchen sink from Jacuzzi. TippingSprung, a Manhattan-based brand consultancy, observed that there are no major brand surveys focusing on brand extensions. This survey of branding and marketing professionals was designed to help address this powerful phenomenon.

2004 TippingSprung Survey of Top Brand Extensions

Summary Report
25 September 2004 Compiled by Peter Makula, Robert C. Sprung, and Martyn Tipping TippingSprung, LLC

Executive Summary......................................................................................................................... 3 About the Brand-Extension Survey ................................................................................................. 5 The Results: Top Brand Extensions ................................................................................................ 7 The Results: New Ideas in Brand Extension ................................................................................. 14 Analyzing the Results: Trends and Themes in Brand Extension ................................................. 15 Appendix I: Detailed Responses, New Brand Extensions............................................................. 17 Appendix II: Sample Respondent Companies............................................................................... 24 Appendix III: Alternate Nominees from Respondents ................................................................... 25 Appendix IV: Full Text of Survey Questions.................................................................................. 26 Acknowledgments.......................................................................................................................... 28 About TippingSprung..................................................................................................................... 28 Press Contact ................................................................................................................................ 28

2004 TippingSprung LLC, all rights reserved

ts_brand_extension_report_2004_FINAL.doc

Executive Summary
Brand extensions seem to be everywhere these days footwear from Harley-Davidson, a baby stroller from Jeep and, yes, even the kitchen sink from Jacuzzi. Brand extensions are flourishing for a number of reasons. Companies are finding that in many cases, their most valuable asset is not their technology or other tangible assets, but rather their brands, including all the loyalty, emotion, and associative power that they command in the marketplace. TippingSprung, a Manhattan-based brand consultancy, observed that there are no major brand surveys that focus on the powerful phenomenon of brand extensions. Consulting with a panel of branding experts, TippingSprung designed a brand-extension survey to determine top brand extensions, gather ideas for potential brand extensions, and analyze trends. What are the top brand extensions? Respondents voted on winning brand extensions in eight categories, including: Winner Apple iTunes online music store Callaway Golf apparel Harley-Davidson footwear Donald Trump in The Apprentice Hooters Air airline Runner-Up Jeep stroller
Best and worst brand extensions: Apple iTunes Music Store, and Hooters Air airline.

Best overall brand extension

Best extension of a known brand into apparel Best extension of a known brand into footwear Best extension of a celebrity brand Worst brand extension

Victorinox (Swiss Army) apparel Caterpillar footwear Madonna's The English Roses children's book Maxim Magazine Haircolor

Other questions included: Best high-end brand extending to a mass market (won handily by Isaac Mizrahi at Target) Best brand extending into ice cream (won by Godiva) Most overdue brand extension (why didnt they think of that sooner?), won by Mr. Clean cleaning tools.
66.8% 47.3% 35.6% 37.1% 43.9% 65.9%

39.5% 27.8%

Summary of top brand extensions.

music store Mr. Clean Davidson Godiva Mizrahi at Hooters Air Apprentice Callaway cleaning

footwear

Trump in

apparel

Harley-

Donald

iTunes

Target

Isaac

tools

online

Apple

1. most distinctive

2. apparel

3. f ootw ear

4. ice cream

5. celebrity 6.overdue

7. mass appeal

8. misstep

2004 TippingSprung LLC

-3-

TippingSprung Brand Extension Survey 2004

airline

golf

The

Which brands are most extendible? Respondents also voted on which brands they would like to see extended. Some of the proposed extensions were eye-opening: Fisher-Price should brand day-care centers Volvo should transfer its credibility in protecting lives into child seats or home-security systems. Nike should brand water. There should be a Harley-Davidson beer. Kleenex should have its own brand of nasal spray. Victorias Secret should extend into other indulgences like chocolates and so said one respondent oysters.
Apple Nike Starbucks BMW Sony Target Bang & Olufsen Ben & Jerry's Coca Cola Crayola Mercedes Prada Rolex Virgin Volvo 3 3 3 3 3 3 3 3 3 4 4 4 5 8 16

Top brands chosen for new extensions

Emerging trends in brand extension The following are a few of the key trends observed in the survey, discussed more fully in the attached report: Technology is more about the brand than the gadgetry. People seem to be looking for brand extensions from their favorite technology brands Apple, Nokia, BlackBerry and B&O. This shows that consumers (or at least the professionals we spoke with) fully understand that technology is about more than functionality it is about embracing a digital lifestyle. Were looking for the brands we grew up with to grow with us. A number of respondents happen to mention Crayola as a candidate for brand extensions. Is this a case of nostalgia making brands that we loved in our childhood relevant to us as adults? Barbie is capitalizing on the huge goodwill that adult women feel toward the brand with their launch of adult fashion and fragrance brands. Could other childrens brands "grow-up" in a similar way? Brands that stand for a single idea in consumers' minds are also ripe for extension. Everybody knows that Volvo stands for safety, so baby car seats and strollers is a perfectly logical extension. Likewise, Ben & Jerry is a socially responsible, "grassroots" brand so why not sell a B&J clothing line made from allnatural fibers? IKEA is about fun, cheap, funky furniture with a side of Swedish meatballs, so why not go whole hg and launch an IKEA chain of cafes or fast food restaurants? The survey showed that people are highly receptive to brand extensions. In fact, many consumers are looking to the brands they trust and love to fill other niches in their lives, said Peter Makula, one of the surveys authors. The survey demonstrated that brands are defined by things far less tangible than form. When people can visualize Harley-Davidson beer or Singapore Airlines financial services, it shows the intangible and emotional power of brands.

2004 TippingSprung LLC

-4-

TippingSprung Brand Extension Survey 2004

About the Brand-Extension Survey

Why TippingSprung Conducted the Survey
Brand extensions seem to be everywhere these days footwear from Harley-Davidson, a baby stroller from Jeep and, yes, even the kitchen sink from Jacuzzi. What is a brand extension? Broadly defined, it is a case of a company moving from what is perceived as its core business, into a new product or service. Brand extensions are flourishing for a number of reasons. Companies are finding that in many cases, their most valuable asset is not their technology or other tangible assets, but rather their brands, including all the loyalty, emotion, and associative power that they command in the marketplace. How else can one explain the success of Barbie apparel or Caterpillar footwear? Of Lycra nail polish or Olay vitamins? Of Disney wall paint or a Jeep stroller? We designed the survey to help marketers think about their brands in new ways, and potentially uncover new opportunities for brand extension, said Martyn Tipping, one of the surveys authors. The cost of creating a brand from scratch is extremely high in time and money; it is often much more effective to leverage the brands already in a companys portfolio. Of course, extensions can go too far, raising the eyebrows of consumers or even weakening the core brand. The jury is still out, but this might end up being the fate of brand extensions like the Ferrari laptop, Hooters airline, and Maxim Magazine hair color. TippingSprung, a Manhattan-based brand consultancy, observed that no major brand surveys focus on the powerful phenomenon of brand extensions. The idea was born to survey industry experts, in order to identify top brand extensions and spot emerging brand-extension trends. How the Survey was Designed Given the extraordinary breadth of brand extensions they affect almost every industry and product category as well as the difficulty in precisely defining what constitutes a brand extension, TippingSprung focused on two areas: 1) Determine top brand extensions in specific categories. Consulting with a panel of industry experts, we determined eight key categories of brand extension (e.g., brands extending into apparel, or celebrities extending their brand into products). For each category, the panel then nominated and voted on a list of finalists that were included in the final survey. To make the cut, a nominee had to be: Timely. Currently active, launched within the last two to three years. Distinctive. We tried to avoid categories filled with me-too extensions (e.g., celebrity fragrances). Pioneering. An extension got extra points for being the first in a new area. 2) Poll branding professionals on new directions in brand extension. Respondents were asked to list one or two favorite brands, and how they might be creatively extended into new categories. The responses were one of the most intriguing results of the survey, and yielded many points of departure for analyzing brand-extension trends.

2004 TippingSprung LLC, all rights reserved

ts_brand_extension_report_2004_FINAL.doc

The panel of experts. TippingSprung consulted with 15 experts in designing the survey and selecting the choice of brand extensions offered as options in each category. Panelists needed to be active in the field of branding or brandextension/licensing. We also needed reasonable confidence in the experts objectivity. TippingSprung is a New York-based branding company with practices in brand licensing, brand strategy, naming, design, and linguistics. The survey was organized and analyzed by these TippingSprung principals: Martyn Tipping. A veteran of the branding industry, formerly director of verbal branding at Landor Associates. Martyn is a graduate of the University of Cambridge in modern languages and social psychology. Peter Makula. Peter has worked in the brand-licensing and extension industries for almost 15 years. He is a graduate of Harvard College. Robert Sprung is a professional linguist who focuses on issues in global branding. He is also a Harvard graduate.

How the Survey was Conducted and Analyzed The final survey administered by TippingSprung consisted of 10 questions (reproduced below). Questions 1 through 8 offered a number of selections in answer to a broad category in the field of brand extension. Respondents were given the opportunity to write in candidates if their choice in a given category was not offered (question 9). These write-in responses are given in Appendix III of this report. Question 10 was more open-ended, giving respondents the opportunity to suggest new brand extensions based on their favorite brands. This question produced a wealth of suggestions for potential brand extensions, which also form the basis for some of our comments on emerging trends in the field of brand extension. The survey was sent to 2,659 people. This was a select list of branding professionals at branding or similar creative agencies, and branding professionals (typically with a VP Marketing title). Of these, 208 branding professionals responded within the time limit. Respondents came from a representative cross-section of addressees. Companies represented by the survey results included such companies as Avaya, Avon, Campbell Soup, Daewoo, Dell, FutureBrand, GlaxoSmithKline, Johnson & Johnson, Landor Associates, L'Oreal, NBC Universal, Nissan, Philips Electronics, Procter & Gamble, Siegel & Gale, The Beanstalk Group, Timberland, The Wharton School, Time Inc., WPP Group, and Young & Rubicam. (A more complete list of respondent companies is given in Appendix II.) How the survey was administered. The survey was sent as an email form. Only responses from original email addresses were accepted; duplicates were not counted. The survey was sent in the first week of August 2004, and results were collected until August 21, 2004.

2004 TippingSprung LLC

-6-

TippingSprung Brand Extension Survey 2004

The Results: Top Brand Extensions

Question 1. BRAVE NEW BRANDING (for the most distinctive extension in a new category)
votes 1 2 3 4 5 6 7 8 Apple iTunes online music store Jeep stroller Olay vitamins Nickelodeon Family Suites by Holiday Inn Starbucks Hear Music CDs and Coffehouses Disney Color by Behr (paint sold at Home Depot) Polaroid flat-panel TVs Lycra nail polish 97 28 19 16 13 13 12 7
Jeep stroller 13.7%

Olay vitamins 9.3% Apple iTunes 47.3% Nickelodeon Family Suites 7.8% Starbucks Hear Music CDs/stores 6.3% Lycra nail polish 3.4% Disney Color by Behr 6.3%

Polaroid flat-panel TVs 5.9%

Notes on the extensions:

Apple iTunes Music Store. In its first year of operations, iTunes reportedly sold over 70 million songs. It is the first large-scale online music store. Disney Color by Behr (paint sold at Home Depot). The new Color Center at Home Depot has paints in lively colors and themes inspired by Disney characters. Jeep Liberty Stroller. The popular Jeep stroller is distinguished by its smooth ride and four-wheel suspension and, of course, its Jeep look. To fully prepare infants for a Jeep lifestyle, parents can also choose from the Jeep Liberty Renegade Walker, the Jeep Baby Station Diaper Bag, the Jeep Sahara Travel Playard and, if the stork calls again, the Jeep Wagoneer Tandem Stroller. Lycra nail polish. Coty Cosmetics has licensed Lycra for a Lycra-branded nail polish. The Lycra in the polish is claimed to adhere longer and reduce chipping. It is also claimed to offer superior color and shine. Nickelodeon Family Suites by Holiday Inn. The first childrens cartoon company, to our knowledge, that has tried to compete with Disney in the hotel business. The hotel has Nickelodeon-themed rooms, live entertainment with Nickelodeon characters, and a food court. Olay vitamins. Olay now makes vitamins that promote womens health, often with a focus on the connection with their core business (e.g., vitamins that claim to hydrate skin). Polaroid flat-panel TVs. Polaroid has moved into the television business; their flatpanel TV has built-in speakers and a 160-degree viewing angle. Starbucks Hear Music CDs and Coffeehouses. Starbucks has opened a Hear Music Coffeehouse in Santa Monica equipped with a Listening Bar (the place for insightful discussions and the digitally enabled exploration of music), a custom CD-compilation service, live performances, 10,000 CDs, and Hear Music experts. A second location has opened in Berkeley, California.

2004 TippingSprung LLC

-7-

TippingSprung Brand Extension Survey 2004

Question 2.

DRESSED TO IMPRESS (among brands extending into apparel, where does the brand most enhance the offering?)
votes
Victorinox apparel 25.4% Barbie apparel 20.5% Callaway Golf apparel 35.6%

1 2 3 4 5

Callaway Golf apparel Victorinox apparel (Swiss Army brand) Barbie apparel Teflon denim apparel Samsonite Blacklabel apparel

73 52 42 25 13

Teflon denim apparel, 12.2% Samsonite Blacklabel apparel 6.3%

Notes on the extensions:

Barbie fashions. Barbie now has a young girls apparel line, cosmetics, accessories, and a fragrance. Callaway Golf apparel. In 2003, Ashworth developed Callaway, an up-market line of golf apparel. The Callaway line sold some $30 million in fiscal 2003, its first full year of sales. Samsonite Blacklabel apparel. Samsonite has developed a Travel Wear apparel line, which includes mens and womens apparel, accessories, and footwear. Teflon denim apparel. Teflon has created a fabric protector, used in Teflonbranded clothing, that is claimed to help clothing look new longer and cause spills to roll off the fabric. They have also created Teflon fabric protector with wrinkle release. Victorinox apparel (Swiss Army brand). The Swiss Army brand licensed out its trademark crest to create the Victorinox line of apparel, which is sold in the US, Canada, and the Caribbean.

Question 3.

BEST FOOTWEAR FORWARD (among brands extending into footwear, where does the brand most enhance the offering?)
votes

1 2 3 4 5

Harley-Davidson footwear Caterpillar footwear Oakley footwear Kangol footwear Hummer footwear

76 71 34 14 10
Hummer footwear 4.9%

Harley-Davidson Caterpillar footwear footwear 34.6% 37.1%

Kangol footwear 6.8%

Oakley footwear 16.6%

2004 TippingSprung LLC

-8-

TippingSprung Brand Extension Survey 2004

Notes on the extensions:

Caterpillar shoes. Caterpillar had worldwide success when they launched their footwear brand. Their boots make a tread pattern reminiscent of that of Caterpillar tractors. Harley-Davidson footwear. Harley-Davidson makes footwear for men and women distinguished by its buckles and rugged soles. These intricate details create the spirit of freedom that is the heart and sole of Harley-Davidson footwear the consumer is told. Hummer footwear. Hummer footwear is meant to combine comfort, style, and performance. They use Himalayan leather, which is treated to make it strong, comfortable, yet soft to the touch. Kangol footwear. Kangol, originally known for hats and berets, has a licensing agreement for footwear that has helped extend the brand into mens and womens footwear in the US and UK. Oakley footwear. Oakley is known for premium lenses and Iridium-coated designs. Having developed an assault boot for US Special Forces, the company now offers a similar model to the public. Oakley also makes men and womens tennis shoes and sneakers.

Question 4.

HOTTEST ICE CREAM (among brands extending into ice cream, where does the brand most enhance the offering?)
votes

1 2 3 4 5 6

Godiva Starbucks Atkins Endulge Weight Watchers Smart Ones M&M Tropicana

90 37 35 25 16 2
Tropicana 1.0% M&M 7.8%

Godiva 43.9%

Starbucks 18.0%

Atkins Endulge 17.1% Weight Watchers Smart Ones 12.2%

Notes on the extensions:

Atkins Endulge. Atkins Nutritionals has come out with its own ice cream, sold in Safeway, Albertsons, BJs, Save Mart, and other supermarkets. Flavors include butter pecan, chocolate, vanilla, and vanilla fudge. A four-ounce serving is said to have 3 grams of net carbohydrates.

2004 TippingSprung LLC

-9-

TippingSprung Brand Extension Survey 2004

Godiva. Godiva now sells ice cream in flavors like Chocolate Covered Cookies and Cream, and Chocolate Raspberry Truffle. M&M. M&M/Mars has a relationship with Dreyers ice cream. They introduced six products in the $1.6 billion premium packaged ice-cream market in the spring of 2004. Starbucks. Starbucks, who also partnered with Dreyers, has launched eight flavors of Starbucks ice cream, plus two coffee ice-cream bars. Flavors include Biscotti Bliss and Java Chip. Tropicana. Tropicana, the world leader in fruit juices, has two flavors of Tropicana Swirls: vanilla ice cream with raspberry sorbet, and vanilla ice cream with orange sorbet. Weight Watchers Smart Ones. CoolBrands International introduced a new Giant Fudge Bar for Weight Watchers in late 2002. Totaling 1 point in the Weight Watchers system, the bar sells itself as rich and chocolaty.

Question 5.

CELEBRITY IN A NEW SPOTLIGHT (for the extension that has most positively influenced how a celebrity is perceived)
votes
Donald Trump in The Apprentice 66.8%

1 2 3 4

Donald Trump in The Apprentice Madonna's The English Roses children's book Dr. Phil's Shape Up nutrition bars Jessica Simpson's Dessert Beauty cosmetics

137 43 13 12
Jessica Simpson's Dessert Beauty cosmetics 5.9%

Madonna's The English Roses children's book 21.0%

Dr. Phil's Shape Up nutrition bars 6.3%

Notes on the extensions:

Dr. Phils Shape Up bars. Dr. Phil has extended his own Shape Up diet plan with a line of nutrition-oriented foods, sold at major retailers like Wal-Mart, CVS, and Rite Aid. Jessica Simpsons Dessert Beauty cosmetics. Jessica Simpson created a line of beauty products that taste good; flavors include sun-ripened strawberry and chocolate.

2004 TippingSprung LLC

-10-

TippingSprung Brand Extension Survey 2004

Question 6.

WHY DIDNT THEY THINK OF THAT SOONER? (for the most intuitive extension from a trusted brand)
votes

1 2 3 4

Mr. Clean cleaning tools Xerox paper shredder Maytag air conditioner Heineken/Krups BeerTender

81 74 32 18

Mr. Clean cleaning tools 39.5%

Xerox paper shredder 36.1%

Heineken/Krups BeerTender 8.8%

Maytag air conditioner 15.6%

Notes on the extensions:

Heineken/Krups BeerTender. A draught beer system for home use, launched in the Netherlands and now being sold in the US. Maytag air conditioner. Nordyne secured the rights to manufacture Maytag air conditioners in August 2002. They include an ultra-premium line featuring what was claimed as the best warranty in the industry, including 10-year coverage on parts. Mr. Clean cleaning tools. One reason for inclusion in the survey, according to one expert who voted for it: Mr. Clean used to be targeted at just women, now its also reaching out to men. Xerox paper shredder. Sold at Staples and elsewhere, the shredder is a significant perceptual departure from the core Xerox technology business.

Question 7.

MEETING THE MASSES (for the most interesting "high-end" personality extending to a mass market)
votes

1 2 3 4

Isaac Mizrahi at Target O Oscar Simply Shabby Chic Bisou Bisou at J.C. Penney

135 31 23 16

Isaac Mizrahi at Target 65.9%

O Oscar 15.1% Bisou Bisou at J.C. Penney 7.8%

Simply Shabby Chic 11.2%

2004 TippingSprung LLC

-11-

TippingSprung Brand Extension Survey 2004

Notes on the extensions:

Bisou Bisou at J.C. Penney. Bisou Bisou gained prominence through its celebrity clientele that includes Sharon Stone and Britney Spears. A line is now sold mass-market at J.C. Penney. Isaac Mizrahi at Target. Isaac Mizrahi has teamed up with Target to create a clothing line. Launched in August 2003, the line is priced from $9.99 to $69.99. O Oscar (from Oscar de la Renta, soon to be at Macys). The designer is slated to unveil his womens sportswear line, O Oscar, at Macys in the fall of 2004. Simply Shabby Chic (Rachel Ashwell) at Target. The patterns, beloved of celebrities like Jennifer Lopez, are a mix of English elegance and California casual. The line, introduced at Target in spring 2004, ranges from $19.99 to $99.99.

Question 8.

HOW'S THAT AGAIN? (for the extension that least fits the brand's core values)
votes
Maxim Magazine Haircolor 24.4% Ferrari laptop 22.9% Hooters Air airline 27.8%

1 2 3 4 5 6

Hooters Air airline Maxim Magazine Haircolor Ferrari laptop Sunkist pistachios Vera Wang Cologne for Men Jacuzzi kitchen sinks

57 50 47 22 17 12

Jacuzzi kitchen sinks 5.9%

Sunkist pistachios 10.7% Vera Wang Cologne for Men 8.3%

Notes on the extensions:

Ferrari laptop. The Ferrari laptop is a limited edition computer from Acer. It is bright red and sports the Ferrari logo. The computer received negative press for its relatively slow speed not what one might expect from the Ferrari name. Hooters Air airline. Hooters Air started in 2003. The airline features Club Class seating, food, and a crew that includes a few Hooters girls. Not everyone may agree with the companys claim to A great experience that enlivens the senses and puts the fun back in flying. Jacuzzi kitchen sinks. Jacuzzi has five styles of kitchen sinks; the company has also diversified into showers and bathroom fixtures. Maxim Magazine Haircolor. Maxims hair coloring is for men only, and is sold in food, drug, and mass-merchandising stores. The dye has vitamin-enriched conditioners claimed to protect hair. Sunkist Pistachios. Known for fruit, Sunkist has gone into a new area, putting its name on bags of California pistachios, grown in Sunkist orchards. Vera Wang Cologne for Men. Launched in January 2004 at Saks Fifth Avenue. Vera Wang did the package creative; the bottle is from Heinz Glas.

2004 TippingSprung LLC

-12-

TippingSprung Brand Extension Survey 2004

Question 9.

If your top choice for any question wasn't listed, please feel free to write it in here (please specify the question numbers).
36 respondents (17%) offered a write-in vote as an alternative to at least one of the questions. Only one of these brand extensions was mentioned more than once: Kelloggs Eggo Syrup received two mentions (it is an extension of the waffles associated with the advertising catchphrase Leggo my Eggo). Jack Daniels received two separate write-in votes, one for its electric guitar, and one for its barbecue sauce. Complete results to this question are given in Appendix III below.

Summary/Analysis
Among the winners in each category, we looked for brands which clearly distanced themselves from the runners-up. In this context, the following stand out:
66.8% 47.3% 35.6% 37.1% 43.9% 65.9%

39.5% 27.8%

Apple iTunes online music store

Mr. Clean cleaning tools

HarleyDavidson footwear

Godiva

Isaac Mizrahi at Target 7. mass appeal

1. most 2. apparel 3. distinctive footw ear

4. ice cream

5. celebrity 6.overdue

8. misstep

Apple iTunes (47.3% in its category) the most distinctive extension Godiva ice cream (43.9% in its category) the brand that most enhances the offering (in the ice cream category) Donald Trump in The Apprentice (66.8% in its category) the brand extension that most positively influenced how a celebrity is perceived Isaac Mizrahi at Target (65.9% in its category) most interesting high end celebrity going mass-market

These winners illustrate a number of the larger brand-extension trends discussed below.

2004 TippingSprung LLC

-13-

TippingSprung Brand Extension Survey 2004

Hooters Air airline

Donald Trump in The Apprentice

Callaway golf apparel

The Results: New Ideas in Brand Extension

Question 10 of the survey reads: List one or two of your favorite brands, and how they might be creatively extended into new categories. Here are the brands that respondents nominated most frequently:
Apple Nike Starbucks BMW Sony Target Bang & Olufsen Ben & Jerry's Coca Cola Crayola Mercedes Prada Rolex Virgin Volvo 3 3 3 3 3 3 3 3 3 4 4 4 5 8 16

Here is a sampling of the many fascinating ideas submitted by respondents: Apple Computer was mentioned by a disproportionate number of respondents (which might be due, in part, to the disproportionate representation of the Apple among branding and design firms). Milton Bradley and Fisher-Price should brand day-care centers, or have their own airport-based entertainment centers. Kohler (bathroom fixtures) should extend into decorative ceramic tile. Volvo should transfer its credibility in protecting lives into homesecurity systems. Lennox (makers of furnaces) should brand water heaters. Nike should brand water. Ocean Spray should get into frozen novelties (popsicles, ices, etc.). Lancme should brand apparel. There should be a Harley-Davidson beer.

2004 TippingSprung LLC

-14-

TippingSprung Brand Extension Survey 2004

Ben & Jerrys should come out with its own brand of chocolate bars, candy, etc. Kleenex should have its own brand of nasal spray. Victorias Secret should extend into other indulgences like chocolates and so said one respondent oysters. Starbucks should have a brand of spas. (Survey organizers were a bit surprised that the Starbucks brand did not come up more for example, it scored low with its ice-cream brand since the name is almost universally recognized and people tend to love it or hate it.) The following brands were mentioned by at least two different respondents: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. BlackBerry Callaway Golf Fujifilm Harley-Davidson Hewlett Packard IKEA Jaguar Jeep JetBlue MAC cosmetics Nokia Panera bread Pottery Barn Samsung Snapple Volkswagen Weight Watchers Whole Foods Oprah Absolut Atkins Nutritionals

A complete detail of responses to this question, one of the most interesting aspects of the survey, is given in Appendix I below.

Analyzing the Results: Trends and Themes in Brand Extension

Technology is More About the Brand than the Gadgetry People seem to be looking for brand extensions from their favorite technology brands Apple, Nokia, BlackBerry and B&O. This shows that consumers (or at least the professionals we spoke with) fully understand that technology is about more than functionality it is about embracing a digital lifestyle. Of course, loyalty to technology brands across categories is nothing new look at Sony. But what's interesting is that all of the brands mentioned in the survey are renowned for their design as well as their functionality.

2004 TippingSprung LLC

-15-

TippingSprung Brand Extension Survey 2004

This is why we think that this is a lifestyle issue rather than just a gadget issue. What the gadget does is still important, but how it looks and what it says about your taste and style is even more important. Determining Which Brands Are Ripe for Extension A number of respondents happen to mention Crayola as a candidate for brand extensions. Is this a case of nostalgia making brands that we loved in our childhood relevant to us as adults? Barbie is capitalizing on the huge goodwill that women feel toward the brand with their launch of adult fashion and fragrance brands. Could other kids brands "grow-up" in a similar way? Brands that stand for a clear, singular idea in consumers' minds are also ripe for extensions. Everybody knows that Volvo stands for safety, so baby car seats and strollers is a perfectly logical extension. Likewise, Ben & Jerry is a socially responsible, "grassroots" brand so why not sell a B&J clothing line made from allnatural fibers? IKEA is about fun, cheap, funky furniture with a side of Swedish meatballs, so why not go whole hg and launch an IKEA chain of cafes or fast food restaurants? Brands like Starbucks that have insinuated their way into the fabric of our lives are also strong candidates for extensions. Some of the suggestions are obvious and reflect areas where the brand may be currently underperforming - Starbucks branded food, for example. Others are a little more out there but show that Starbucks is about much more than coffee - you wouldn't expect the same brand that gives you a get-up-and-go caffeine buzz to also offer you a soothing relaxing massage. But, if you acknowledge that Starbucks is about a welcoming environment, cool music and outstanding service then perhaps the concept of a Starbucks spa seems less crazy. Apple Leads the Way This brand gets a lot of mentions and suggestions that the brand should diversify into other products like cell phones, digital cameras, PDAs, and home-entertainment products. Of course, this could be caused by the inherent bias of our sample (marketing and other creative professionals often prefer, or even idolize, Apple), but it is also a testament to the brands leadership position in some cool new categories (portable music), and the companys effective use of design. Rubbing Off the High-End High-end, or luxury brands, were disproportionately represented among respondents (Tiffany wall paper and fabrics; Bang & Olufsen air conditioners; Rolex into anything high end). This is a natural instinct in brand extension find a fancy name and spread around its prestige halo. Respondents likewise wished to allow high-end automotive brands (Mercedes-Benz, BMW, Rolls-Royce) entry into other areas in their lives, including home appliances, bicycles, and jewelry. In a way, Donald Trump is a luxury brand, with The Apprentice emblematic of the power of success in the American business world. Celebrities or Brands? Todd Oldham is designing La-Z-Boy furniture, but this is just an illustration of a larger trend: brands hooking up with great design to make themselves stand out and protect their pricing and market position. This trend is spreading across categories and classes of retail (cf. Isaac Mizrahi at Target). Increasingly, celebrities are branding themselves and, as brands, they are crossing over into new categories. George Forman, best known for grills, is now promoting mens apparel (Big & Tall). Russell Simmons, who started out as a band manager (Run DMC), has become an arbiter

2004 TippingSprung LLC

-16-

TippingSprung Brand Extension Survey 2004

of fashion taste, with a handful of urban apparel brands (Phat Farm, Def Jam, etc.). Funk Master Flex, a radio DJ, has a television show promoting automotive appearance strategies. One respondent suggested that Jimmy Buffet should consider branding vacation packages (why didnt the Beach Boys think of that?). This trend should continue as Americans remain preoccupied with personalities and entertainment.

Appendix I: Detailed Responses, New Brand Extensions

10. List one or two of your favorite brands, and how they might be creatively extended into new categories. Responses are given verbatim from the survey (in some cases edited for brevity).
ADT Security Services All-Clad cookware American Express Apple Drink mixers (sweet & sour, etc.) for combining w/Absolut. Perhaps their own version of a Red Bull energy drink, made to mix w/Absolut? Olives and other premium 'martini-related' condiments Compete with OnStar offering automobile, boat, motorcycle protection services (fire, theft, medical emergency) Tools Corporate jets After creating the iPod, they should venture into other integrated products such as a wirelessly-connected iTunes alarm clock or an answering machine that can be accessed from a computer, remotely, to pick up messages. Apple - would like to see them extend their product line to include that of a PDA or organizer. Cell phones Digital cameras High-tech consumer electronics - stereo/sound Home entertainment--DVRs, TVs iPod to PDA market Maybe they should design PDAs that included Internet access, cell phone and iPod capabilities. Telephones, mobile phones iPod cell phones Could do a line of slimming clothing - full of Lycra and Spandex so that it continues to fit you as you lose weight. Need to infiltrate more restaurants or open one of their own Car interiors

Absolut

Atkins Nutritionals Baker Furniture

2004 TippingSprung LLC

-17-

TippingSprung Brand Extension Survey 2004

 Bank of America Bath & Body Works

Air conditioners Furniture & household furnishings Laptops Professional legal consulting, how to avoid trouble with the government, shareholders and customers Clothes that match their relaxed and comfortable image -bathrobes, fleece sweatsuits, knit tops and pants, etc. All-natural clothing line Chocolate bars/candy. Could consider extending into the healthy snack food category. I think B&J's equity and distinction as a quirky, wholesome, natural, progressive, eco-friendly brand has enough elasticity and appeal to succeed. Power boats Up-market dining set Card-game accessories (shufflers, casino/betting chips, money clips, card game racks, etc.) Byte-size style guides Footwear BMW, Mercedes-Benz, or Porsche would be a lot more fun on a stroller than Jeep.

Bentley Beverly Hills Polo Club Bicycle (playing cards) BlackBerry

Boeing Borders Brita Cabela's / Bass Callaway Golf Calvin Klein Caterpillar Chico's Chiquita Cirque du Soleil

Motor boats Publish and sell a ""Review of Books"" type printed magazine. Monthly, on magazine stands or by subscription. Brita Water Filters into household purifiers, personal sports bottles w/filtration system Range of consumer products Golf vacation packages. Stationery Pet colognes Work denims Home fashions Fruit drinks, baby foods, popsicles, ice cream Home decor

2004 TippingSprung LLC

-18-

TippingSprung Brand Extension Survey 2004

Coach Cooking Light magazine Corona

Furniture Pantry Essentials Corona beer into Corona aspirin Childrens clothing Room decor E-mail Daycare center business. Cooking utensils Motorcyles, kids' scooters Racing bicycles Line of home linens Space ships, mobile homes Digital printers/photo-related digital products Portable, PDA-like, handheld video receivers Pocket knives Book bags, book covers Beer Sportswear News Lighting Handheld products (diary) Fast food Home delivery Trendy but affordable cafes Housewares Bicycles Sneakers Mountain bikes [Editors note: Jeep is now selling a bicycles under the Jeep name, as well as mountainboards.]

FedEx or USPS or UPS Fisher-Price Food Network Ford Mustang Ford Shelby Cobra Four Seasons Hotels Frank Gehry

Gillette Gore-Tex Harley-Davidson HBO Hunter Douglas IBM

Issey Miyake Jaguar

JetBlue

Ground transportation with customer-focused benefits and low cost

2004 TippingSprung LLC

-19-

TippingSprung Brand Extension Survey 2004

Jimmy Buffett KitchenAide Kleenex/Puffs Kohler Lancme Land Rover Lennox Levi's Louis Vuitton MAC Cosmetics

Jimmy Buffett vacations Clothes washer / dryer Kleenex or Puffs: nasal spray, moisturizer Ceramic tile Apparel Luggage Water heaters Belly-button rings for low-rise jeans, with free piercing Automobile interiors Clothing, footware Airline (fast check-in/no extras/just a seat)

Mercedes-Benz Microsoft Miller Lite Milton Bradley

Home appliances Computers with all software instantly downloaded online Reduced-calorie snack foods: lite beer/lite chips I can see someone like a Milton Bradley creating travel boredom stores where they not only sell games and activities for travelers (and families) but create an experience there. Got a couple of hours to kill at the airport? Go to the MB Travel Shop. Mints Vitamins for kids Rain gear Children's swimwear, related toiletries Computer and telephone accessories Cosmetics Replica Production Cars (so you race like your favorite driver) Energy drinks? Baking pans Yoga or meditation aids Car-care products

Mini Cooper MLB or NFL Morton Salt Mr. Bubble MTV Muji NASCAR Nespresso Nestl New Balance NHRA

2004 TippingSprung LLC

-20-

TippingSprung Brand Extension Survey 2004

 Nokia

Exercise equipment/ treadmills Fitness classes, gyms Home exercise equipment Seat cushions, sport chairs, etc. Water and sports beverages Other electronics (radios, DVD players, computers) Self-development centers. Exploring the relationship with ourselves to become more conscious and proactive in this life. Connecting People! (together and within). First golf clothes, then golf equipment Frozen novelties (popsicles, granitas, ices) Oprah healthful eateries Organic teas, bottled water, energy bars Ketchup, relish, mustard, etc. Kids' apparel Jeans Automobiles Clothing Home Furnishing Channel Cosmetics, skin care for those of us who can't afford a dress or handbag Food and beverages Cleaning products for delicate products like laptops, handheld electronic products, etc. Adventure travel packages Everything high-end Handheld GPS devices Luxury apparel and accessories (cuff-links, tuxedos and suits, etc.) Upscale jewelry/accessories/china Line of bicycles Pillows Instruction in beauty-related careers Total business-travel services (financial services, range of high-end travel accessories, complete travel service)

Oakley Ocean Spray Oprah Origins Oscar Mayer Pampers Pepsi Polo Pottery Barn

Q-tips REI (Recreation Equipment, Inc.)

Rolls-Royce Saab Select Comfort Sephora Singapore Airlines

2004 TippingSprung LLC

-21-

TippingSprung Brand Extension Survey 2004

smart (cars) Snapple Sony Stanley tools

Cosmetics - groovy, environmentally aware products and packaging Other "Best Stuff" foods Theme Park Work clothes In-store dessert lines (similar to bottled frappuccinos...) Spa, massage, and beauty parlors Cookies and yogurt sold in supermarkets (like their ice cream)

Subaru Sunkist Target

Heavy machinery Healthy lighting (vitamin D) Target is my favorite store. They have the coolest commercials and a great logo and yet you can't buy anything really (except a t-shirt or bulls-eye plush toy) with the logo on it. I would snap up that stuff. Much like the Polaroid large-screen TV example mentioned above, the Technicolor brand can easily move to digital camera devices, computer monitors, TV screens, computer graphic software. Cleaning products beyond detergent Wallpaper and fabric TV dinners A magazine/catalog of the top interior, fashion, and landscaping shows. Recapping episodes and detailing information for how consumers can obtain the look. Roller blades Adventure vacations and adventure books; line of fitness clothing for women. Chocolate, oysters Condoms Luggage Mountain bikes/ mopeds/ scooters/ branded apparel Child seats and strollers Health spas Home security systems

Technicolor

Tide Tiffany TiVo TLC (The Learning Channel) Trek bikes Tubbs Snowshoes Victoria's Secret Virgin Volkswagen

2004 TippingSprung LLC

-22-

TippingSprung Brand Extension Survey 2004

Wal-Mart Weight Watchers

Retail bank (Editors note: Tesco supermarket has already done this with great success in the UK.) Free weights Organic restaurants, spas and retreats/eco-farm agro-tourism vacation destinations Would like this brand to become more mainstream while raising the awareness of the importance of diet in our overall health (personal responsibility). Home-office supplies beyond paper Laundry detergent (eco-safe)

Xerox Zoots

2004 TippingSprung LLC

-23-

TippingSprung Brand Extension Survey 2004

Appendix II: Sample Respondent Companies

Analog Devices Avaya Avon Becton, Dickinson Bell & Howell Co. Brand Finance Brand Guardians Brandexcel S.A. BrandLink Brandvalue Campbell Soup Company Daewoo Electronics Co. Dell Fish & Neave FutureBrand GlaxoSmithKline IEEE Ingersoll Rand Johnson & Johnson Landor Associates Lehman Brothers License! magazine L'Oreal Maritz Research Merrill Lynch MgMGold Communications MODA International Marketing NBC Universal Nissan North America Onbrand Original Penguin Philips Electronics Procter & Gamble Quiznos Corp. Radiant Systems Siegel & Gale The Beanstalk Group The Licensing Company The Licensing Group The Timberland Company The Wharton School Time Inc. Vornado Air White & Case Wilmer Cutler Pickering Hale and Dorr WPP Group Young & Rubicam Advertising

2004 TippingSprung LLC

-24-

TippingSprung Brand Extension Survey 2004

Appendix III: Alternate Nominees from Respondents

9. If your top choice for any question wasn't listed, please feel free to write it in here (please specify the question numbers). Alternate proposed by respondent Apple i-Tunes partnership with BMW Jack Daniel's electric guitar, just launched with Peavey Jack Daniel's Barbecue sauce 6 Most overdue extension Virgin Airlines (it started as a record label) Adidas anti-perspirant Listerine Pocketpacks Harley-Davidson Apparel Michelin Footwear Goodyear footwear Russell Simmons into clothing, etc. Arnold Schwarzenegger, governor of California Dr. Phil's book on weight loss Nicole Richie in Simple Life George Forman clothing at Casual Male Daisy Fuentes and her line of sportswear at Kohls Eggo Syrup John Deere lawn mowers Oral-B Brush-Ups Tiger Woods for Nike Oleg Cassini at David's Bridal Todd Oldham La-Z-Boy collection Moschino Cheap & Chic line Karl Lagerfeld's upcoming limitededition collection for mass retailers H&M (Hennes & Mauritz) Nestle's Baby Ruth brand candy bars Comments

Question 1 Most distinctive extension

[Editors note: the survey limited itself to brand extensions of the last three years]

2 3

Best apparel extension Best footwear extension Best celebrity extension

[Editors note: Simmons wasnt included in the survey since, strictly speaking, he wasnt a rapper, but rather a business manager.] The respondent added, "although I wouldn't have selected that one." The respondent added, "I would have selected that instead of the nutrition bars.

"That truly was a no-brainer"; mentioned by 2 respondents

Meeting the masses

"He started the trend," said the respondent

Worst extensions

They have a current promotion w/ a free game of bowling for every bag of Baby Ruths candy bars you buy. I don't get the connection at all.

2004 TippingSprung LLC

-25-

TippingSprung Brand Extension Survey 2004

Appendix IV: Full Text of Survey Questions

Respondents were given the following instructions: For each question, please select the brand extension that you feel is most memorable, intelligent, and impactful. If your choice isn't provided, feel free to write in your candidate in question 9. 1. BRAVE NEW BRANDING (distinctive extension in a new category)
Apple iTunes online music store Disney Color by Behr (paint sold at Home Depot) Jeep stroller Lycra nail polish Nickelodeon Family Suites by Holiday Inn Olay vitamins Polaroid flat-panel TVs Starbucks Hear Music CDs and Coffeehouses

2.

DRESSED TO IMPRESS (where does the brand most enhance the product?)
Barbie apparel Callaway Golf apparel Samsonite Blacklabel apparel Teflon denim apparel Victorinox apparel (Swiss Army brand)

3.

BEST FOOTWEAR FORWARD (where does the brand most enhance the product?)
Caterpillar footwear Harley-Davidson footwear Hummer footwear Kangol footwear Oakley footwear

4.

HOTTEST ICE CREAM (where does the brand most enhance the product?)
Atkins Endulge ice cream Godiva ice cream M&M ice cream Starbucks ice cream Tropicana ice cream Weight Watchers Smart Ones ice cream

5.

CELEBRITY IN A NEW SPOTLIGHT (the extension that has most positively influenced how a celebrity is perceived)
Donald Trump in The Apprentice Dr. Phil's Shape Up nutrition bars Jessica Simpson's Dessert Beauty cosmetics Madonna's The English Roses children's book

2004 TippingSprung LLC

-26-

TippingSprung Brand Extension Survey 2004

6.

WHY DIDNT THEY THINK OF THAT SOONER? (most intuitive extension from a trusted brand)
Heineken/Krups BeerTender draught appliance Maytag air conditioner Mr. Clean cleaning tools Xerox paper shredder

7.

MEETING THE MASSES (most interesting "high-end" personality extending to a mass market)
Bisou Bisou at J.C. Penney Isaac Mizrahi at Target O Oscar (Oscar de la Renta) at Macy*s Simply Shabby Chic (Rachel Ashwell) at Target

8.

HOW'S THAT AGAIN? (the extension that least fits the brand's core values)
Ferrari laptop Hooters Air airline Jacuzzi kitchen sinks Maxim Magazine Haircolor Sunkist pistachios Vera Wang Cologne for Men

9.

If your top choice for any question wasn't listed, please feel free to write it in here (please specify the question numbers). List one or two of your favorite brands, and how they might be creatively extended into new categories.

10.

2004 TippingSprung LLC

-27-

TippingSprung Brand Extension Survey 2004

Acknowledgments
This survey is the result of the hard work of a number of people. We wish to thank all those who responded to the survey. We also wish to thank the branding experts who gave generously of their time in helping craft the survey questions and voting on the potential extension nominees. We wish to give special thanks to Jenny McDonald, who helped in all aspects of the survey design and administration. This project could not have been completed without her. Thanks also to Dirk Kammerzell, for his design assistance, and Marina Kaziner, for fact-checking and proofreading.

About TippingSprung
TippingSprung is a New York-based branding company with key practices in brand licensing, brand strategy, naming, design, and translation. Contact information: TippingSprung, LLC 350 Seventh Avenue, Suite 1703 New York, NY 10001 Tel. 212 268 4800 Fax 212 268 8566 www.tippingsprung.com

Press Contact
Press inquiries relating to the TippingSprung 2004 Survey of Top Brand Extensions may be directed to: Judy Kalvin Kalvin Public Relations Email: jkalvin@kalvinpr.com Tel. 914.693.0123

2004 TippingSprung LLC

-28-

TippingSprung Brand Extension Survey 2004