Sometimes consumers express their enthusiasm for a brand by creating brand extensions, products or services in new categories that are closely affiliated with the “parent” brand. This paper aims to examine the positive or negative impact that consumer-generated brand extensions (CGBEs) can have on brand image and revenue, and the options that companies have available to deal with them.
The paper presents a case study of the collectible strategy card game – Magic: The Gathering – and discusses how the company responded to five different brand extensions that were created by players. This case study was used to develop a framework that allows managers to evaluate CGBEs based on their benefits and risks and to select an appropriate response.
Four possible responses were identified: challenge, criticize, commend and catalyze. Which of these responses is appropriate for companies depends on whether the CGBE has a positive or negative impact on the brand image and revenue and whether this impact is large enough to merit an active response.
This study shows that it is essential for managers to understand how to evaluate CGBEs. Managed properly, they can improve product usage, help generate new customers and have a positive impact on revenue and brand image. However, CGBEs can also have a negative effect, in particular if they are substitutes for the original product.
