Development of a Brand Extension Decision-Making Model for Professional Sport Teams

Article excerpt

Abstract

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. …