Brand Extensions

Although a consensus generally exists about the definition of brands and their contribution to a company's bottom line, the pressing question now becomes how best to use the brand to increase shareholder value.

Leading brands frequently attempt to take advantage of their brand strength by extending the core brand into other areas. This can be a perilous path for (sports) marketers. In fact, a great way to harm a brand is to attach its name to everything because brand extensions, or subbranding, often harm core brands by siphoning market share away from the core brand rather than taking market share away from competitors. For instance, a compelling case can be made that purchasers of Miller Lite and Diet 7-Up were wooed from their core brands more so than those of its competitors, Budweiser and Pepsi.

The NBA's brand extension of the WNBA in 1995 hasn't been entirely beneficial for the NBA. Perhaps financial losses of its current magnitude were perceived from the outset, but would the NBA have entered the market if it knew that coverage of its championship series would, in year five, be relegated to page four or five on the sports page? Or that a mere 1,000 people would sign up to purchase season tickets for the proposed WNBA expansion team in Chicago?

It seems that the only time the WNBA garners page one attention is when one of its players, Lisa Harrison, wins the Playboy.com poll as the "WNBA's Sexiest Babe." Or if one of its teams folds as the Miami Sol, Orlando Miracle, and Portland Fire did in 2002.

Control over a premier brand's affiliate brands is also essential, as evidenced by the NBA's decision to start the National Development Basketball League (NBDL) from scratch. The NBA is striving to make the NBDL a family-friendly form of affordable entertainment that offers fans an acceptable quality of play.

The NBDL, which began in the fall of 2001 as a regional league throughout several Southern states, affords the NBA the opportunity to not only streamline costs due to shorter travel distances and other efficiencies, but also allows the NBA to concentrate its marketing efforts of the NBDL throughout a manageable geographic region.

As a brand affiliate, the NBDL also enables the NBA to cultivate players, coaches (the Greenville Groove became the first men's professional sports franchise to hire a female coach), referees, front office executives, and fans.

The NBDL's geographic concentration enabled it to sign a cable TV deal with Fox Sports Net South for the broadcasting of 19 games across the regional network's seven-state coverage area. This regional programming buttresses the three-year broadcast contract the NBDL has with ESPN and ESPN2, which is significant because it provides a national platform for advertisers.

If and when the league is successful in the South, the NBA will establish other regional leagues around the country, possibly setting up a true national championship whereby NBDL franchises from the West, Midwest, East, and South compete for league honors.

Before the NBDL can succeed, it must demonstrate like all brand extensions that it is able to stand on its own. The NBDL can use the NBA as a crutch to generate publicity for the new league and persuade customers to sample the product. However, if the NBDL, like other brand extensions, isn't a sound product on its own, it won't survive.

The NBA, like any organization, must continue to manage its brands and, when appropriate, control its message. It has to do so expertly, professionally, and ethically, and must do so with its entire stable of constituents in mind.

Should any business, including the NBA, fail to adequately manage its global brand, it will be unable to effectively reach domestic and international customers of all ages. Further, the organization's ability to do so will be comprised if those with whom it has important relationships, particularly sponsors and advertisers in the case of the NBA, believe the company is delivering an unclear message that limits their ability to sell products and services to global audiences.