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Merchandise as a Brand Extension

Merchandise is a great way to build loyalty with your customers, promote your brand and drive extra revenue.

One of the biggest success stories of recent times has been the Compare the Market Meerkats. An irreverent campaign for a price comparison website featuring Aleksandr and his cuddly rodent friends. A long running campaign, a series of plush toys and now singing with Gary Barlow. A meteoric rise that is loved by many. The beauty of this campaign is the meerkat merchandise assuring a longevity long after the ads have run their course. A calculated way to give something away for free that ensures long term brand exposure and affinity.

Popular well known brands have been using merchandise as a brand extension for years. Walk in any department store around Christmas time and you will see items decorated with a brand, sometimes the relevance is strong such as a marmite toast holder but at other times the link is tenuous to say the least. Think Coca Cola salt and pepper shakers? Odd but brands sell, anything. The most famous and well known brand merchandise are probably the Natwest pigs, which became a true collectable and still fetch over £100 on eBay.

Music bands now make a large proportion of their income from merchandise, the advent of music download and illegal file sharing has meant that the revenue from actual music sales has decreased meaning more reliance on other income streams. Bands can put their logo on anything, particularly boy bands aimed at screaming young girls. Who doesn’t want a Harry Styles lanyard or Niall pencil?

Football clubs also use merchandise to boost revenues, allowing supporters to wear the shirt, write with their team pen and bath with their branded rubber duck . The perpetual and unsubstantiated rumour is that Manchester United earn £1,000,000 in revenue on matchdays from their Old Trafford megastore. That’s more than some clubs annual budgets. But football is a huge brand exercise and clubs have utilised merchandise to draw in fans who can’t afford to go each week to follow the team but are willing to support the club through the purchase and display of merchandise.

The Power of merchandise brand extensions are difficult to measure but safe to say they are here to stay as brands look for even more innovative ways to remain top of mind and grab share of wallet.