or, Mochalicious could simply take its formula and open up more stores. One of the good things about being in a place like Melbourne with its massive coffee culture is that there is always room for another good coffee shop. Once Mochalicious is established as successful, the company is in a position to grow, and that means taking the name to other parts of town, other suburbs or even to other states. Such is the brand extension that is possible by expanding out the Mochalicious concept to other stores.
The key to being able to launch different extensions or expansions is that the brand must be known and have value. If nobody knows what Mochalicious is, or if people do not like Mochalicious, then there will be no possibility for brand extensions or expansions. Therefore, it is crucial that the company makes every effort to build positive vibes about the brand, and it can do this with great service, for example. If people respond well to the Mochalicious brand, then the company will be well positioned to make use of that brand in the future. A brand extension also needs to have good fit with the existing business, and that is why the brand is suggested to do other things that are related to coffee (Tauber, 2010). Nobody is interested in a Mochalicious car.
Changes in the Business Environment
There are a number of changes to the business environment that can cause problems for an established business. A good example of this would be if the demographics of the neighbourhood change. Now, we know that the coffee shop business is based on building a regular clientele and this is done by having an in-store atmosphere that fits with the character of the neighbourhood. So when the neighbourhood changes, the shop either needs to change with the neighbourhood or it needs to make a change in location, to a place more suited to the shop's style. This is a decision that would need to be made on the basis of what types of changes were being made and whether the new demographics are well-suited to the shop's offering.
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