Development of a Brand Extension Decision-Making Model for Professional Sport Teams
Walsh, Patrick, Lee, Seungbum, Sport Marketing Quarterly
The introduction and management of brand extensions continues to represent a popular strategy for professional sport teams as they provide an additional touch point between the fans and the team, and have the ability to have a positive impact on revenue. While the introduction of extensions could lead to positive results for teams, if they fail they could potentially damage overall team brand equity. As such, it is important for sport managers to have a process that fills in the gaps from conceptualization to launch to ensure brand extension success and limit potential dilution to team brand equity. Utilizing previous theoretical and applied research on brand extensions the Team Brand Extension Decision- Making Model (TBEDMM) is proposed
The study of the brand management practices of professional sport teams is relatively new, but is starting to garner more attention. This growth has been fuelled by a shiftin the focus of many teams from short-term profits to a more strategic focus of managing the team's brand in order to realize long-term growth and value (Gladden, Irwin, & Sutton, 2001). Teams such as Manchester United, Real Madrid, the New York Yankees, and Dallas Cowboys have ventured past the status of being a mere sports team and have established themselves as premiere brands (Couvelare & Richelieu, 2005).
One way teams are taking advantage of their brand name is by introducing brand extensions, which are new products or services that utilize the brand's preexisting name but are established in a new product category (Aaker, 1991). There are many common examples of brand extensions in professional sport. For example, team merchandise stores, restaurants, websites, magazines, sport camps, etc. all would allow a team to extend its brand from the product category of professional sports and entertainment into a new product category. Extensions such as these are becoming increasingly popular as they allow teams to potentially have a positive impact on revenue outside of their traditional revenue sources and it provides another point of interaction between teams' brands and their consumers (Walsh & Ross, 2010). In spite of the potential positive outcomes associated with brand extensions, there are also serious negative consequences should the extension fail. If the extension is unsuccessful it could harm the brand equity that has been developed by the team (John, Loken, & Joiner, 1998; Loken & John, 1993).
Despite the risks involved, many times brand extension decisions may be made with a myopic focus in hopes of realizing all of the benefits that come with a successful brand extension. In fact, some teams have made extension decisions that were not in line with their identity or positioning in hopes of generating quick short-term profits (Richelieu & Pons, 2009). While short-term revenue spikes are beneficial, making quick decisions regarding brand extension development could result in the organization not having a true understanding of the long-term impact that extensions could have on the team's brand equity and financial well being. Any damage in team brand equity could ultimately impact the team's ability to generate revenue and damage attitudes towards the team (Fink, Trail, & Anderson, 2002; Funk & James, 2001; Mahony, Madrigal, & Howard, 2000; Ross, 2006; Trail, Anderson, & Fink, 2000; Trail & James, 2001). Given this commentary, professional sport teams should have a step-wise process that aids in both conceptualization and development of brand extension decision-making. As such, the purpose of this article is to propose a brand extension decision-making model that can be utilized when making decisions about the introduction of brand extensions.
Current Research on Brand Extensions
Prior to developing a conceptual model for brand extension decision-making in professional sport it was necessary to conduct a thorough analysis of the current research on brand extensions. Brand extension research, both in and outside of sport, has primarily focused on two different content areas: 1) how consumers evaluate brand extensions and 2) the impact that brand extensions have on the equity of the parent brand. In addition, research indicates that a fan's level of identification with a team will not only have an impact on their evaluation of a brand extension product or service, but will also impact whether brand dilution or enhancement will occur to the parent brand which introduces the brand extension.
Brand Extension Evaluation
Consumer evaluations of brand extensions are typically determined by the attitudes that the consumer already has developed for the parent brand which introduces the extension (Aaker & Keller, 1990; Bhat & Reddy, 2001; Broniarczyk & Alba, 1994). That is, when a consumer has a favorable opinion of a team, they will typically have a more favorable image of extensions that are developed by the team. For example, the New York Yankees, a Major League Baseball (MLB) team, have extended their brand to the product category of television production with the Yankees Entertainment and Sports Network, also known as the YES Network. Research would indicate that those that have a strong, favorable image of the New York Yankees would transfer these feelings towards the YES Network. It is also generally supported that the perceived quality of the parent brand which introduces an extension will impact the consumer's perception of the quality of the brand extension (Bottomley & Doyle, 1996; Bottomley & Holden, 2001). Therefore, teams which perform well may be in a better position to introduce extensions as consumers are more likely to associate the extension with being high in quality. However, that is not to suggest that underperforming teams cannot introduce brand extensions. Teams with strong fan bases may still support extensions despite poor team performance. Strong brand equity will also allow a team to overcome losing records in regards to their brand development strategies (Richelieu, 2006).
Another factor which will influence a consumer's evaluation of a brand extension is the perceived fit between the product category of the parent brand and the product category of the new brand extension. Research suggests that if the extension's product category is perceived to be similar, or a fit, with the parent brand then this would lead to a positive evaluation of the new brand extension (Aaker & Keller, 1990; Apostolopoulou, 2002b; Bhat & Reddy, 2001; Bottomley & Doyle, 1996; Bottomley & Holden, 2001; Volckner & Sattler, 2006).
This fit can be established in a variety of ways. For instance, Aaker and Keller (1990) discussed product feature similarities and noted that perceived fit can be established if the extension and the parent brand share a similar usage situation, if the extension can be used in place of the parent brand, or if the parent brand has the manufacturing capabilities needed to produce the extension. Outside of product feature similarities, the idea of brand concept consistency in establishing a fit has also been discussed by multiple authors. In general terms, this would indicate that the extension and the parent brand share a similar image or similar brand associations (Bhat & Reddy, 1997; Bridges, Keller, & Sood, 2000; Park, Milberg, & Lawson, 1991). This may explain why it has been found in sport that perceived fit is generally going to be higher for extensions which are related to sport such as equipment or team camps (Papadimitriou, Apostolopoulou, & Loukas, 2004). Therefore, consumers are more likely to form positive attitudes towards team-related extensions which fall into some sport-related product category as the extensions would share similar associations with the team.
In addition to research on perceived fit for extensions, Apostolopoulou (2002a) attempted to categorize the various types of team extension offerings and proposed that team brand extensions be categorized as sport related, entertainment related, media related, information related, or low perceived fit extensions. Similar to business related literature, it has also been determined that fan loyalty will be transferred to a team's brand extension as highly identified fans are more likely to have favorable attitudes regarding a team's brand extensions (Apostolopoulou, 2002b; Walsh & Ross, 2010).
Brand Extension Impact on Parent Brand Equity
Results from mainstream marketing literature indicate the potential for significant negative consequences to parent brand equity if an extension were to fail. It has been suggested that if a brand extension is introduced which has attributes or associations that are significantly different than the attributes or associations that the consumer holds for the parent brand then the consumer will modify their attitudes about the parent brand in a negative fashion (John et. al, 1998; Loken & John, 1993). This modification of parent brand image tends to occur according to either the bookkeeping or typicality models (Loken & John, 1993).
According to the bookkeeping model, consumers' attitudes towards the parent brand will change when exposed to a brand extension which has a different image compared to the parent brand. Specifically, dilution will occur to the attributes of the parent brand in this instance, and will occur regardless of the perceived fit between the extension and the parent brand (Loken & John, 1993; Weber & Crocker, 1983). The typicality model does, however, take into account the perceived fit of the brand extension when considering potential dilution effects. According to this model, dilution to the parent brand will occur when consumers are faced with a brand extension which is a perceived fit but also has attributes which are inconsistent with the parent brand (Loken & John, 1993; Rothbart & Lewis, 1988). At the same time, the typicality model states that dilution would not occur with an extension that has no perceived fit and has inconsistent attributes as this type of extension is perceived as being very atypical of the parent brand (Loken & John, 1993; Rothbart & Lewis, 1988). In this instance, consumers do not associate these types of extensions with the parent brand and as such dilution would not occur.
Only one study to date in sport has examined potential dilution to the parent brand while examining the practical utility of the bookkeeping and typicality models in a team sport setting. Walsh and Ross (2010) examined how consumers' interactions with a team's brand extension would impact the parent brand. In the study, minimal evidence of dilution effects were found and it was determined that consumers' level of identification had a significant impact on brand evaluation when faced with an extension (Walsh & Ross, 2010). While more research is needed in this area, levels of team identification should be a significant consideration in regards to brand extension decision-making.
Influence of Team Identification on Brand Extensions
While research has indicated that highly identified fans are more likely to support team-related extensions (Apostolopoulou, 2002b), very little research to date has indicated how identification impacts potential enhancement or dilution. However, the level of psychological connection that a sport fan feels with a particular team, known as their level of identification (Wann, Melnick, Russell, & Pease, 2001), has been shown to have a number of mediating effects. Highly identified fans typically spend more time and money supporting their favorite team and engage in more consumptive behavior when compared to those at lower levels of identification (Fink et al., 2002; Wann & Branscombe, 1993), while motives for attending sporting events have also been linked to identification (Trail et al., 2000; Trail & James, 2001).
In addition to sport consumptive behavior, a relationship exists between identification and the attitudes one has for a particular team (Funk & James, 2001; Mahony et al., 2000). Highly identified fans will typically form a strong relationship with their team and the team may even become a part of their day-to-day life. These fans are unlikely to change their attitudes and behaviors towards the team as these attitudes are so strong and have been built up over an extended period of time (Funk & James, 2001; Mahony et al., 2000). Conversely, those fans which have lower levels of identification are more open and susceptible to behavioral and attitudinal change. In addition, highly identified fans recall a larger number of brand associations pertaining to their favorite sports team than those at moderate and/or low levels of identification (Ross & James, 2007). This higher level of recall and engagement with these brand associations will lead to stronger attitudes (Ross & James, 2007). Research also suggests that consumers who are highly committed to a brand will discount negative information which would reduce the chances of dilution to their attitudes, while less committed consumers tend to exhibit greater attitude change (Ahlulwalia, Burnkrant, & Unnava, 2000; Ahluwalia, Unnava, & Burnkrant, 2001). This would support the findings of Walsh and Ross (2010) that any potential for dilution to the team's brand equity caused by a brand extension would be less likely to occur for highly identified fans than fans at moderate and low levels of identification, regardless of the fit of the extension's product category. Therefore, any team sport brand extension decision-making model should include the consideration of identification levels.
Product Development Decision-Making Models
One way to increase the probability of success of a new brand extension is to utilize a product development decision-making model which provides a step-by-step process of how to introduce a new product and what decisions need to be made at each step in the process. Prior to developing a specific brand extension decision- making model in professional sport, existing models were examined to determine their appropriateness in the sport setting.
In general, new product development models tend to follow an eight-point sequential path which includes idea generation, idea screening, concept development and testing, marketing strategy development, financial analysis, actual product development, market testing, and finally making the product available to the public (Kotler, 1991; Ulrich & Eppinger, 2004). While this process provides a good starting point to develop a decision-making model for brand extensions, there are a few key points that limit its use in the professional sports context. This model was designed to aid in developing new products that do not yet exist, and therefore are not yet branded. In fact, the development of a brand name would not take place until one of the last stages in these models. As the success of a brand extension relies on a brand that is already in existence, the brand equity of the parent brand should be one of the first points of examination in a model which is designed to aid in the development of brand extensions for professional sport teams.
Realizing that the brand in an extension has already been established, Ambler and Styles (1997) attempted to develop a decision-making model specifically for brand extensions. The authors model starts with what they classified as the driving forces behind brand extension decisions which are the overall brand strategies, such as brand growth or defense, and what specifically has led the organization to consider a brand extension such as competition and consumer need. The next stage is the decision criteria in which the brand's equity is taken into consideration during concept and product development and testing. Financial forecasting and criteria are then set, which finally leads to the launch of the brand extension.
Ambler and Styles' (1997) model provides a good framework to base a decision-making model for a team brand extension and their concepts of determining brand strategies before developing the extension, developing brand goals and objectives, market testing, and financial forecasting will all be included in the proposed team brand extension model. However, there are some limitations of the model in relation to a brand extension that may be introduced by a professional sports team. Their model suggests that the brand strategy should be defined prior to examining the brand equity of the parent brand. The sport-specific brand extension model will propose that the brand equity of the team should drive the strategy. By setting a strategy prior to examining if an organization's brand equity could support the extension, attitudes towards implementing an extension could already be biased by the strategy that is in place. In addition, Ambler and Styles' (1997) model does not take into account the planning of the marketing mix prior to the launch of a brand extension. Finally, Ambler and Styles' (1997) decision model could not fully be applied to a professional sport team's brand extension as it does not account for the impact that team identification levels could have on a team brand extension, and any potential dilution to team identification should the extensions fail.
As it is commonly accepted that professional sport teams offer a service in the form of a professional sport event, the unique aspects of a service based brand must be taken into consideration. Unlike some traditional businesses where sales will be the primary end-goal, some sport-related brand extensions are not introduced for revenue generating purposes. For example, many teams develop youth sport camps or community based programs. While there may be some underlying associated revenues, these programs typically are developed to build goodwill throughout the community. Finally, none of the models examined provided recommendations on what steps need to be taken once the new product or extension is launched to ensure success and monitor the effect that an extension is having on the parent brand. Considering the limitations that exist when trying to apply the existing new product development and brand extension models to professional sport, it was determined that it is necessary to develop a sport-specific brand extension decision model.
The Team Brand Extension Decision-Making Model
A decision-making model grounded in theoretical and applied research for brand extensions introduced by professional sport teams is shown in Figure 1. This model is designed so it can be applied to any brand extension that a team may introduce that extends the team from its primary product category of professional sport and entertainment (e.g., the "on-field" product) to a new product category. The model is not intended to be applied to other items that may include a team brand such as team licensed product, as previous research has maintained that licensing should not be considered to be a brand extension based on their different executional qualities (Walsh & Ross, 2010).
The Team Brand Extension Decision-Making Model (TBEDMM) consists of five sequential stages; 1) Evaluation of Team Brand Equity and Identification, 2) Concept and Strategy Development, 3) Concept Testing, 4) Extension Launch, and 5) Post-Launch. The model is sequential in that if the team receives what would be considered to be positive results at each stage it would be recommended that they could move on to the next step in the model, ultimately resulting in the launch of the extension. However, if there is negative feedback at a certain stage in the model it will be recommended at that point that the team refrain from introducing the brand extension and it should then consider alternative branding strategies. What follows is an overview of the tactics which are recommended at the various stages of the TBEDMM.
Evaluation of Team Brand Equity and Identification
The success of a brand extension will be linked to the strength of the brand which introduces the extension. A brand extension which is introduced by an organization with strong brand equity has a greater chance of success (Aaker & Keller, 1990; Bhat & Reddy, 2001; Bottomley & Doyle, 1996; Bottomley & Holden, 2001; Broniarczyk & Alba, 1994). Therefore, the first step for teams which are considering a brand extension should be to analyze their team brand equity. This is different from previous decision-making models which do not consider the brand until the late stages of product development (Ambler & Styles, 1997; Kotler, 1991; Ulrich & Eppinger, 2004). There are a variety of conceptualizations of team brand equity which should be understood prior to measurement.
Gladden, Milne, and Sutton (1998) were the first to attempt to conceptualize brand equity in sport and developed a number of items which they believed would have an impact on a team's perceived quality, brand awareness, brand loyalty, and brand associations. They grouped these items, which were called antecedents, into team-related, organization-related and market-related antecedents. The team-related antecedents included items such as the success of the team, the head coach, and any star players that played for the team. Organization-related antecedents included the reputation of the team and the history or tradition of the team, their strength of schedule and the conference the team plays in, and the actual way in which the entertainment portions of the game are delivered. The final group of antecedents were market related and included items such as the amount of media coverage the team receives, the team's geographic location, and the amount of support the team receives from fans and the community. Gladden and Milne (1998) indicated that these antecedents would impact overall team brand equity, which in turn would have some effect on national media exposure, merchandise sales, donations to the program, corporate support, ticket sales, and the atmosphere at the games. Further research by Gladden and Milne (1999) resulted in the addition of two more antecedents which could impact team brand equity-the design of the team's logo and the facility in which they play.
Gladden et al. (1998) and Gladden and Milne's (1999) models of team sport brand equity were developed based on theories derived for consumer based goods (Aaker, 1996; Keller, 1993). Ross (2006) extended the study of brand equity in team sport while claiming that professional sport teams offer a service in the form of some entertainment value to their fans. Ross (2006) developed a brand equity model derived from Berry's (2000) model of service-based brand equity including antecedents which could impact team brand equity and marketplace outcomes. Those antecedents were described as being either organization induced (e.g., marketing activities controlled by the team), market induced (e.g., information not controlled by the team), or experience induced (e.g., the service experience). Kerr and Gladden (2008) also used organization-, market-, and team-related antecedents in their model of sport brand equity in the global marketplace. They suggest that due to the advances in access and technology many professional teams have fans outside of the teams market. Their model addresses these satellite fans and adds a new antecedent of brand community which in turn impacts team brand equity and any associated marketplace outcomes (Kerr & Gladden, 2008). Finally, Richelieu (2006) suggested that there are three steps to establishing brand equity in professional sport: 1) defining the identity of the team; 2) positioning the team in the market; and 3) developing a brand strategy and marketing actions.
It is important to note that each model of brand equity indicates that brand awareness and brand associations are vital components to developing positive brand equity. Therefore, teams should conduct research which measures the awareness levels of their brand in the market(s) in which they plan on introducing any new brand extension. This awareness can be measured using simple recall and recognition procedures (Cuneen & Hannan, 1993; Miloch & Lambrecht, 2006; Pitts, 1998; Sandage, 1983). It has also been suggested that brand associations are the most important component of spectator-based brand equity as they are typically used by consumers when making consumption decisions and are used in the formation of a team's brand image (Aaker, 1996; Ross 2006).
Team brand associations in sport could be measured by utilizing the team brand association scale (TBAS) which measures 11 association dimensions: 1) nonplayer personnel; 2) team success; 3) team history; 4) stadium community; 5) team play characteristics; 6) brand mark; 7) organizational attributes; 8) concessions; 9) social interaction; 10) rivalry; and 11) commitment (Ross, James, & Vargas, 2006). Utilizing the TBAS will allow the team to understand if it has strong, favorable, and unique image associations which will be beneficial when introducing brand extensions (Keller, 1993).
In addition to determining team brand equity it will be important to conduct research to examine the identification levels of the team's fan base. Highly identified fans will be more likely to support a team's extension (Apostolopoulou, 2002b) and less likely to exhibit attitudinal change towards the team should the extension fail (Funk & James, 2001; Mahony et al., 2000). In order to measure the identification levels of the team's fan base, the Sport Spectator Identification Scale (SSIS) can be utilized (Wann & Branscombe, 1993). Identification levels will be particularly important to understand in attempting to get fans to adopt brand extensions.
If at any point in the team's preliminary research it is found that the team does not have strong brand equity or an identified fan base, the team should then determine that a brand extension strategy may not be appropriate at that time. More attention at this point should then be paid to developing marketing activities which will strengthen overall team brand equity and/or the fans connection with the team.
Concept and Strategy Development
If it was determined that the team has a strong brand and a loyal fan base, the team should develop a marketing plan that guides the development and implementation of the extension. It would be recommended at this point that the team follow the first three stages of the Marketing Management Process proposed by Mullin, Hardy, and Sutton (2007). At this stage in the TBEDMM it will be particularly important for the team to determine the goals and objectives, develop the brand extension concept, conduct a SWOT analysis, and determine the tactics they will engage in to market the brand extension.
The marketing plan for the brand extension should have clearly defined goals and objectives that will drive the development of the brand extension and the remainder of the marketing plan. For example, the team should determine if they hope to generate revenue, enhance the brand image, reach a new target market, etc. Only after developing the goals and objectives should the team then consider what type of brand extension product or service will best allow it to meet these goals and objectives. For example, if the team determines that one of its goals is to generate revenue within its market then extensions such as a merchandise store or a restaurant could be viable options. However, these would not be good options if the team's goal is to reach its displaced fans that exist outside of the team's primary market. Extensions such as a team television network or magazine would be better options to reach this goal. Examples such as these illustrate why it is important to develop goals and objectives prior to determining the brand extension concept. Another important consideration will be the perceived fit of the brand extension's product category as this could determine the success or failure of the extension (Papadimitriou et al., 2004), and the potential for any dilution to occur to overall team image (John et al., 1998; Loken & John, 1993). For instance, if the team decides to introduce a sports bar, it should examine the image fit of the product category of sports bars with that of professional sport teams.
In conducting the SWOT analysis the team should examine the organizational strengths and weaknesses which could either be a deterrent or inhibitor of brand extension success. In this stage of the TBEDMM two potential internal strengths and weaknesses, the team's brand equity and levels of identification, will already be understood. Other internal factors to examine would be the managerial strengths of the organization, perceived levels of internal expertise in the brand extensions product category, the financial stability of the organization, and if the organization has the appropriate financing needed to introduce and market an extension, staffing levels, and the time the organization has to devote to the management of the extension. All of these factors will be crucial in determining the success or failure of the extension.
The SWOT analysis should also examine the external opportunities and threats for the brand extension. One important factor to consider is the marketplace demographics to determine if the market will support the extension. Depending on the extension to be introduced, some demographic factors to consider would be gender, age, and household income to determine if they fit the profile of a consumer in the extensions product category. In addition, it will be vitally important to examine the competitive landscape in the extensions product category. For example, if the team is considering opening up a sports bar, it should have strong knowledge of other sports bars in the area, how successful they are, what type of consumer they attract, and most importantly whether the team can position its sports bar in a unique way which will allow it to compete with its potential competition in the category.
After conducting a SWOT analysis the team should then develop its marketing plan for the brand extension. The team will need to determine who its target market is for the new brand extension, how it will position the extension, the price, distribution channels, and promotional activities. If the team can develop a strong plan that has been communicated consistently to key stakeholders in the organization, it should move on to the next stage of the TBEDMM. As brand extensions rely on the pre-existing brand name and the ability to utilize the assets already attached with the brand name, it is important that the extension is positioned appropriately to the organization as a whole to enhance the chances for brand extension success and limit any potential dilution to parent brand equity.
Once the brand extension product or service has been conceptualized and a marketing plan is in place, the next step in the TBEDMM would be to conduct market testing to understand the extension's potential for success. In particular, it is important that the team conducts both quantitative and qualitative research to understand factors such as the consumer demand for the extension, the price the consumer is willing to pay for the product or service, how much they are willing to buy, when and where they would wish to purchase the extension, and what effect the extension would have on team brand equity and attitudinal loyalty towards the team.
Consumers should also be exposed to the brand extension at this time so they can provide feedback on items such as packaging, design, and functionality. Testing should be conducted to determine if the brand extension will have any positive or negative effect on team brand equity and fan identification levels. As ultimately these are two of the most important factors that will drive the success of a sport organization (Aaker, 1996; Fink et al., 2002; Funk & James, 2001; Mahony et al., 2000; Ross, 2006; Trail et al., 2000; Trail & James, 2001; Wann & Branscombe, 1993) it is important to determine any potential for dilution prior to the launch of the extension.
After exposure to the extension the team could measure relevant association dimensions from the TBAS (Ross et al., 2006) and the identification levels with the team (Wann & Branscombe, 1993). As the team will already have an understanding of its identification levels and brand associations from step one of the TBEDMM, its pre-existing baseline associations could be compared to the associations after this exposure to the extension. This will allow the team to understand if any dilution, or enhancement, will occur to the team's brand associations and ultimately team brand equity. For example, if the team were to develop a team museum it would measure the associations fans hold for the team after being exposed to the concept of the museum and then compare those associations to what was recorded in stage 1 of the process. While enhancement does not necessarily need to occur, as that may not be one of the goals for the extension, any evidence of dilution should lead the team to re-evaluate the extension.
In addition, a measure of how consumers might react should an extension be negatively received could be achieved by utilizing the Psychological Commitment to Team (PCT) scale (Mahony et al., 2000; Kwon & Trail, 2003). The PCT is recommended as it measures a fan's degree of allegiance to a team when faced with certain situations (e.g., they will remain loyal to a team if the team loses, it would be difficult to change their beliefs about the team, etc.). In the case of brand extensions, it would be important to understand the degree to which the fan base would change their attitudes towards the team if an extension were to succeed or fail. Again, any evidence of dilution should result in the extension not being introduced at this time. Instead, further marketing activities will need to be developed to strengthen the associations for the team and increase levels of fan identification and attitudinal loyalty.
Conducting this research will allow the team to understand if the extension has the potential for success in the marketplace and if the current marketing plan that has been developed meets the needs and wants of the consumer. In addition, the team will be able to produce financial models to determine potential profit or loss for the proposed extension. If consumers react negatively to the extension, then the team should not introduce the extension.
This negative reaction by the consumer could take multiple forms. For instance, the team may find that there is little consumer demand for the extension, that the image of the extension does not match the image of the team, thus increasing the potential for parent brand dilution, or that the price point the team was planning on charging would not be supported by consumers. In any of these instances the extension has little chance for marketplace success and the ultimate failure of the extension could have a negative impact on the team's overall brand equity. At this point the team should re-evaluate the extension itself and any factors of the team's marketing of the extension (e.g., price, design, distribution, etc.) that received negative consumer feedback.
Assuming the team arrives at this stage in the model, it should implement its marketing plan and introduce the extension to the marketplace. The extension should be introduced utilizing the already discussed distribution, pricing, and targeted promotional activities that were developed during the second stage of the TBEDMM. During the extension launch, effective coordination from all relevant departments will be necessary to ensure that the brand extension product and image is portrayed in a consistent manner. For instance, marketing, sales, public relations, customer relations, etc. must all be operating with the same information regarding the brand extension to ensure consistency in marketing activities. Any differences in the way the extension and the overall brand image are portrayed could lead to potential failure of the extension and dilution to the overall team image.
When examining most new product or brand extension development models, each ends with the product launch (Ambler & Styles, 1997; Kotler, 1991; Ulrich & Eppinger, 2004). However, the TBEDMM recommends that continual testing be conducted. In particular, it will be important to examine items such as profit or loss, consumer satisfaction, and how the extension is impacting team brand equity and identification levels. Due to the variety of different tests and decisions made during the TBEDMM, the model does provide a solid foundation for determining success. However, any number of outside factors could ultimately impact the extension and the team's brand in some unforeseen way once consumers are actually interacting with the brand extension in the marketplace. For example, items such as off-the-field scandals, player strikes or work stoppages, and team success, or lack thereof, are items that a sport marketer has no control over. These negative occurrences could ultimately impact overall team brand equity, and in turn the success of any team introduced brand extension. Should the extension start having a negative impact on the team's brand, it should consider removing the extension from the market to limit any potential damage. However, should the team find success with one extension, it is likely it will wish to develop additional extensions in the future.
While it may be tempting for a team to introduce further extensions without going through the TBEDMM process, it is recommended that it repeat the process. As time passes the potential for team brand equity, team image, identification levels, and the fans' willingness to support extensions may change. As such, the market may react differently to a new extension(s) as opposed to the team's current extension(s). In order to ensure the best chance for success, the process outlined in the TBEDMM should be utilized once again.
The TBEDMM provides a conceptual model for further study of brand extensions in sport as well as a process that can be utilized when introducing a teamrelated brand extension. The TBEDMM is more appropriate to utilize in the sport setting than other models (Ambler & Styles, 1997; Kotler, 1991; Ulrich & Eppinger, 2004) as more focus is given to how brand extensions can benefit from the team's brand equity and how the brand equity of the team could be diluted by a brand extension. Also, the sport-specific concept of a fan's psychological connection with a sport team is an important component in the TBEDMM and was not taken into consideration in other models. It has been suggested that properly leveraging the brand equity of a sports team can only be accomplished with a clear identity and strong positioning (Couvelaere & Richelieu, 2005). The TBEDMM will allow teams to understand their identity and positioning prior to launching a brand extension, thus increasing the potential for success. This proposed process should facilitate brand extension decisions for teams and increase the opportunity for brand extension success.
Similar to previous research (Ambler & Styles, 1997; Kotler, 1991; Ulrich & Eppinger, 2004), the primary purpose of this article was to propose a decision-making model through the examination of existing literature. However, in order to further examine the practical utility of the model, four individuals from professional sport teams were interviewed. Each individual, referred to in the text that follows as Participant A, B, C, or D, was at the director level or above and played a key role in the brand management functions of their organizations. This is in line with previous literature that has examined brand management practices of sport organizations through interviews with personnel from two to four teams (Couvelaere & Richelieu, 2005; Richelieu & Pons, 2006; 2009). The industry professionals were asked to identify what brand extensions their teams offer, what extensions were successful/unsuccessful and why, and what they consider when introducing brand extensions. They were then presented with the TBEDMM and asked to respond to its practicality.
A wide range of extensions were offered by the teams and included items such as youth clinics, team merchandise stores, kids clubs, fan clubs, a museum, social media outlets, charitable organizations, and television and radio production. A number of items included in the TBEDMM were addressed when the industry professionals were asked to identify what they consider when introducing brand extensions, thus providing some evidence to the model's practicality. The responses included comments such as: "does it put the organization in a positive light" (Participant A, personal communication, January 24, 2012), "interest of the potential audience" (Participant B, personal communication, February 14, 2012), "how it is connected to the parent brand," "cost of implementation," and "return on investment" (Participant C, personal communication, January 23, 2012). These factors are all examined in the proposed TBEDMM and provide some evidence to the practicality of the model.
In regards to the model itself, the feedback from the industry professionals revealed that the model would be practical and beneficial to use for professional sport teams. However, at the same time, teams may not have the appropriate staffin place to be able to implement the model. Participant C indicated "The process/order of implementation is practical for professional teams and makes sense" (personal communication, January 23, 2012). Participant B stated the "model seems feasible but one problem is that we're understaffed" (personal communication, February 14, 2012), while Participant D responded by saying that they "generally would not engage in the research elements that were described but we may rely on the recommendations of a third party, such as an agency, who may conduct the type of research described" (personal communication, January 24, 2012). Based on this feedback, the industry professionals saw the value of the TBEDMM, particularly for teams that could have staffdedicated to this process or who outsource the research aspects to an outside agency.
While some teams may not have staffin place, that alone does not limit the practicality of the model. In fact, the need for the TBEDMM is highlighted when examining the responses to the question of what brand extensions had been unsuccessful and why they believed they were unsuccessful. In general, the responses indicate that the teams are not sure why the extensions failed or that they lacked a clear focus from the conceptualization of the extension. For instance, one person stated, "Our outreach programs to college students failed" and that they "have absolutely no idea why" (Participant B, personal communication, February 14, 2012). Utilizing the TBEDMM in this instance may have provided answers during the concept testing phase as to why the brand extension was likely to fail prior to implementing the extension. Another indicated that their kids club has been a failure because of "the lack of a clear vision of what exactly it should be" (Participant D, personal communication, January 24, 2012) while another stated that their museum/gallery had failed because "it isn't a good museum or gallery ... it tries to be both and has failed thus far" (Participant C, personal communication, January 23, 2012). Again, if these organizations had utilized the TBEDMM, clear goals and objectives would have been established for the kids club and museum/gallery that may have provided for a greater chance of success.
Conclusions and Future Research
The TBEDMM model is the first known attempt to develop a brand extension decision-making model specifically for professional sport teams. The process is designed to facilitate brand extension decisions and increase the opportunity that a brand extension will succeed in the marketplace and not damage team brand equity. As this is the first model of its kind, further testing is warranted.
It would be particularly beneficial to test the model using a case study approach. While interviews were conducted with industry professionals in the current study to understand the practicality of the model, implementing the model with an actual extension and documenting feedback regarding the use of the TBEDMM from the team throughout the process would be particularly useful. The case study approach could test the model with a number of proposed brand extensions. The success or failure of the extension developed utilizing the TBEDMM could then be compared to the success and/or failures of previous extensions which were introduced without using the process outlined in the model. The feedback provided by the team, and the success or failure of the extensions introduced through the use of the TBEDMM, will provide further evidence to the practicality of the model or uncover areas that may need to be readdressed.
Whereas this study focuses on professional sport teams, future studies will need to examine brand extension decision-making in intercollegiate sport as well. Due to budget cuts, many athletic departments try to find ways to maximize revenues, and brand extensions, such as summer camps, can be a legitimate source of revenue. A specific model for intercollegiate sport is necessary as the intercollegiate teams may be seen as extensions of the athletic department, which is also an extension of the overall university brand. Therefore, when extensions are introduced it will be important to be able to identify the appropriate parent brand in order to examine potential brand effects and outcomes. These unique, and complicated, brand relationships between these entities will therefore require additional testing which is not accounted for in the current model. Athletic departments are also outsourcing many of their marketing functions to external organizations (Lee & Walsh, 2011), and it will be worthwhile to investigate how the external organization plans, develops, and processes the brand extension decision-making for their clients.
In addition, there is the potential that cultural differences may play a role in brand extension evaluation among professional sport teams. In previous literature outside of sport, cultural factors have been examined to see whether or not individuals from different regional or cultural backgrounds evaluate brand extensions differently. Bottomley and Holden (2001) found that consumers from different cultures would utilize their own factors to evaluate brand extensions. Specifically, Han and Schmitt (1997) noted that Eastern consumers tend to utilize corporate reputation when evaluating brand extensions instead of brand fit. Recently, Basu and Roedder (2007) found that Eastern cultures would see higher levels of brand extension fit and accept brand extensions more favorably than European cultures do. Given the globalized era professional sports teams are facing, the teams interact with diverse stakeholder groups (e.g., fans or sponsors) and sell their brand globally. While cultural differences with brand extensions in sport have not been fully tested, it is recommended that a similar case study approach as outlined above be conducted across cultures, and in varying levels of sport (i.e., intercollegiate athletics), as there may be a need for adjustments to the model.
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Patrick Walsh and Seungbum Lee
Patrick Walsh, PhD, is an assistant professor of sport management in the Department of Kinesiology at Indiana University. His research interests include sport brand management and the use of sport video games and new media outlets as marketing tools.
Seungbum Lee, PhD, is an assistant professor in the Department of Sport Science & Wellness Education at the University of Akron. His research interests include outsourcing, sponsorship, and brand in the context of sport.…
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Publication information: Article title: Development of a Brand Extension Decision-Making Model for Professional Sport Teams. Contributors: Walsh, Patrick - Author, Lee, Seungbum - Author. Journal title: Sport Marketing Quarterly. Volume: 21. Issue: 4 Publication date: December 2012. Page number: 232+. © Fitness Information Technology, A Division of ICPE West Virginia University Dec 2009. Provided by ProQuest LLC. All Rights Reserved.
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