Learn to stretch success

Last Updated: Mon, Dec 10, 2012 03:58 hrs

pAccording to prevailing business wisdom it&rsquos a lot easier and cheaper to build on the success of an established brand name such as Dove than to build a new one ground up Brand extensions are more than twice as likely to be successful than products that start their lives as completely new brands Understandably many companies are turning to extensions to boost sluggish sales of established products A new study by market research agency strongNielsenstrong corroborates the view the study shows brand stretches contributed almost 30 per cent to new launches in 2011 and their incremental sales&rsquo contribution stood at 38 per cent in the same yearppArun Chogle client business partner Nielsen says &ldquoGrowth comes disproportionately today for many leading brands from their extensions as compared to the parent brand&rdquo He highlights another finding of their study stretches have five times higher success rate than new launches So if one of the ten new launches is successful one of two extensions will be successful in comparisonppTraditionally the reasons for stretching a brand included the ability to drive growth by leveraging equity of the parent brand efficiencies of scale and most importantly the general belief that extensions attract faster consumer adoption However many attempts at brand stretch fail in the marketplace In an earlier column on brand extensions for strongBusiness Standardstrong Anand Halve co-founder strongchlorophyll brand and communications consultancystrong said &ldquoConsider some of the brands that according to Brandz were the world&rsquos most valuable brands in 2011 Apple IBM McDonald&rsquos Vodafone Coca-Cola If brand extensions was the magic solution you&rsquod have seen dozens of extensions of these brands across marketing landscapes far and wide Coca-Cola potato chips McDonald&rsquos T-shirts Vodafone TV sets Apple refrigerators&rdquoppHis point being that a strong parent brand cannot naturally translate into a successful extension There are traps and many of them Brands can stretch themselves but how thin and how far without snapping are critical questionsppSo how can firms and their brands avoid pitfalls and best manage brand extensions globally In her column &ldquoHow far can a brand stretch&rdquo Rohini Ahluwalia associate professor of marketing in the Carlson School of Management at the strongUniversity of Minnesotastrong said &ldquoStretching a brand makes it important to target an audience that will be able to process and understand the relationship of the brand to the new product&rdquo She added &ldquoGetting it right the first time is crucial because early success with a target audience can help with future extensions And the broader a brand gets the easier it is to stretch next time&rdquoppThere may be no formula to making this choice but there certainly are rules that one can follow to ensure a favourable fateppstrongEnsuring successstrongbr Healthy parents beget healthy children In the brand kingdom a strong parent brand can ensure &mdash at least to a certain extent &mdash a successful extension There is the track record to fall back on and on a more practical side an existing distribution network to scale up operations But that is not always enoughppConsider Anglo-Dutch company strongHULstrong&rsquos soap brand Dove for instance The brand may have started out with soaps but today its portfolio spans the breadth of personal care with body washes lotions shampoos and deodorants Some of the extensions like shampoos are more successful than others But all these extensions have benefitted from the equity of the parent brand and its original promise &mdash that it has &lsquoone quarter moisturising cream&rsquoppThen even Dove has made some costly mistakes In 1965 Unilever introduced Dove dishwashing liquid When the product failed to woo consumers the company cut its price to make it more attractive What the company had obviously not bargained for was that such a move would muddle Dove&rsquos image in the consumer&rsquos minds as being associated with an inexpensive as well as a premium product &mdash a harsh grime-cleaning dish washing soap as well as a gentle moisturising soap The extension did not go down well with the consumers and was duly withdrawnppPerhaps closer to our times is the example of strongReckitt Benckiserstrong&rsquos antiseptic liquid brand DettolppAfter a series of extensions like mouthwashes and shaving creams that failed to take off the brand hit it off with liquid soaps and hand sanitisers The brand then went on to launch a variant Dettol Skincare which was positioned as a milder more caring variant of the brand Despite heavy marketing and advertising support the variant has not been able to replicate the success of the original product Professor Anand Kumar Jaiswal faculty marketing strongIIM Ahmedabadstrong explains the reason &ldquoDettol is identified with germ killing by consumers And germ killing as an action is possible only when the formulation is strong and that translates into harsh products The consumer is then obviously confused with this duality of the product image&rdquoppYou can draw a simple lesson from the experience of Dove and Dettol&mdashthat there must be a fit between the parent and the extension either physical or conceptual &ldquoAn example of the physical fit is where the parent and the extension are in close proximity in terms of usage &mdash say bread and butter&rdquo explains Jaiswal &ldquoHowever this &lsquophysical fit&rsquo can limit your ability to stretch Conceptual fits can widen the playing field considerably That said the &lsquofit&rsquo cannot be cosmetic in nature Neither should it try to challenge the logic of a category&rdquoppTake the example of strongMaricostrong&rsquos cooking oil brand Saffola Saffola has been positioned on the health platform and it has worked hard to symbolise a healthy lifestyle When the brand launched a baked snack called Saffola Zest sometime back it failed to make to take off &ldquoThe company missed out on a simple truth people who are conscious about health don&rsquot gorge on snack foods&rdquo explains a brand consultantpp&ldquoIn other words the company misinterpreted the category of snacking&rdquo But Marico has come back with a bang with Saffola ready-to-eat oats in flavours suited for the Indian palette &ldquoOats are seen as a healthy breakfast option That takes care of the conceptual fit And the flavours take care of the general resistance to the product from the Indian palette due to its relative bland taste&rdquo says Harish Bijoor of Harish Bijoor ConsultsppAnother example of text-book extension &mdash again from the Marico stable &mdash is the extension of Parachute to the skin care category &ldquoParachute is known for bringing to consumers the goodness of coconut With Parachute body lotion we decided to extend this benefit to the skincare category since the benefits of coconut for good skin are fairly known The coconut oil proposition helps us distinguish ourselves in the market as there are no coconut-based skin care products currently available&rdquo explains Sameer Satpathy EVP and head marketing consumer products business MaricoppWhile there was a &lsquofit&rsquo he says there were limitations in terms of consumers&rsquo sensory expectations from the product &ldquoBody lotions are expected to be fragrant a quality not often associated with coconut&rdquo he adds &ldquoThe brand had to therefore devise a new sensual persona for the product right from the packaging design to the product communication But since it was &lsquoParachute&rsquo sticking to the &lsquogoodness of coconut&rsquo philosophy of the parent brand was inevitable&rdquoppStudies show brand stretches tend to be more successful in an evolving or highly fragmented category Where the category is new the presence of a known name will draw consumer attention And in case of the latter where there isn&rsquot strong loyalty towards any one brand a known brand can help break the clutterppExperts also say if you are looking to extend your brand to an unrelated category the move should be backed by considerable marketing muscle And if the brand can justify the connect &mdash however tenuous it is &mdash through compelling advertising the consumer will eventually relent Here consider strongAmulstrong&rsquos foray into frozen pizzas This dairy co-operative is the first brand that comes to mind when you think of milk and related products But frozen pizzas While cheese is a key ingredient of the pizza and Amul enjoys considerable trust in the category the association doesn&rsquot seem very strong &ldquoPizza just isn&rsquot a category consumers identify Amul with&rdquo says a brand consultant &ldquoBut things can change if Amul decides to really go for it and puts some muscle behind its pizza After all it has tremendous distribution clout&rdquoppstrongReverse mentoringstrongbr A lot has been written about how the parent brand&rsquos equity can help the extensions The success of an extension can also have a positive rub-off on the parent brand say experts David Aaker vice-chairman of strongProphetstrong and the author of Brand Relevance Making Competitors Irrelevant says in his HBR blog &ldquoAn extension can enhance the brand associations rather than detract from it Consider strongDisneystrong a maker of cartoons which expanded into the Disneyland theme park and TV series and later into retail stores more theme parks resort hotels a retail store chain a TV channel cruise ships and Broadway theatre All these extensions enhanced the Disney brand by reinforcing the fun family wholesome Disney image enriched the brand with symbols characters songs and experiences and provided huge amounts of brand exposure&rdquoppWhat is true for Disney may not be true for another brand in another category Jaiswal says academic research has shown that products that have become generic to the category examples Xerox for photocopying Bisleri for bottled water Pampers for diapers have lower or limited stretchability Reason consumers find it difficult to associate these brands with any other category except the original oneppThe last word then is brand extensions may not always work They may even fail horribly or backfire But staying aloof when competition is relentless is not such a great idea either As they say the best way to learn is from studying mistakes &mdash other people&rsquos mistakesp

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