Question

Topic: Branding

Transition: Branded Products To Endorsing Brand

Posted by Anonymous on 9/2/2005 at 11:33 AM ET 250 Points
What is the best way to make the transition from being a firm known (by one name) for producing a line of basic products, to a firm capable of endorsing brands (with the same name) in more sophisticated (but fundamentally related) product categories? It is not just an issue of brand or line extensions and remaining focused, it's an issue of the parent corporate brand (endorser) having the same name as the brand of basic products it originally made it's reputation in, but needing a more modern and sophisticated image to be a credible endorser. The brand at the product level has somewhat traditional values which may hold back the brand's ability to endorse more sophisticated branded products.

I think most firms experience these "growing pains," and some come through better than others. Consider as examples Hershey (basic products chocolate and cocoa still branded simply as Hershey ___ but also endorsing sub-brands) and Kraft (basic cheeses named Kraft but endorsing other brands) and Heinz (Heinz ketchup and baked beans and pickles, but also a broad line of endorsed sub-brands). Kraft and Heinz are often shown as examples of bad brand strategy but nonetheless have remained successful for long years.

Can the issue be resolved without taking drastic measures (such as de-branding and re-branding the existing basic products over time, e.g., by inserting a sub-brand moniker and gradually distancing)? Is it possible to create a more modern, sophisticated and broad-portfolio firm image (family endorser brand) while not disenfranchising current customers loyal to the brand of basic products? Will having a mixed-level brand cause confusion as to what the brand means? Different architecture forms seem to have different short- and long-term implications that conflict and there does not seem a clear right answer ...

Thank you in advance for any wisdom you may offer ...
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RESPONSES

  • Posted on 9/4/2005 at 2:09 PM Accepted
    I'm not sure I really understand what you mean when you use the term "endorsing." If you mean using the name of the corporate brand to also identify another brand that's not a line extension, then there are many examples of how that's been handled. It's actually a fairly common dilemma.

    Generally speaking, I advise clients to not proliferate the company brand by making it the brand name for many products that have different benefits for different target audiences. It just confuses consumers and dilutes the real value of the (parent) brand.

    Sometime it's too late, of course. The brand has already been diluted and stands for different things in different markets. In those cases, I generally suggest adding a specific sub-brand name to each product and, over time, shift the emphasis from the old/parent brand to the new/specific-benefit brand. It could take years, but it will take even longer if you don't start now.

    In a few cases, the transition has been remarkably fast. Customers latch onto the new name and adopt it as if it had been there forever. That's ideal. Sometime it takes much longer.

    I hope this addresses the question. Let us know if this is the right interpretation of your question.
  • Posted on 9/5/2005 at 7:05 AM Author
    Thank you for the response. As I said, and you reiterate, it is a "fairly common dilemma." And as I said, and you reiterate, one approach is to guard against over-extending the parent brand, insert a sub-brand moniker and gradually distance and shift the emphasis to the new brand. So you have interpreted the situation correctly, and your response does address one of the questions ... But it doesn't seem to offer substantially new insights. I was hoping for a bit more ... But maybe there isn't anything more (no "siver bullet" solution ...)

    If this is a common problem, can you give any examples of different approaches to solutions that have proven effective (or have failed)? If possible, case studies or writeups in the press ...

    Thanks again for your contributions ...
  • Posted on 9/10/2005 at 3:53 AM Author
    Thanks for all the responses so far. I think there is general agreement that using the brand name on a line of basic products, and using the same brand name at the corporate level to endorse more sophisticated products is a bad idea for the long term. But to enhance the possibility of finding a solution, I will provide an example that may clarify the situation.

    Imagine the brand "Woody" became famous for making high quality but simple wood furniture, chairs, tables, etc ... Later it starts making more sophisticated products, based on wood but now using modern technology (like comp-aided design, special laminates, etc ...). It releases these new products as new brands targeted to kids, targeted to business applications, targeted to sports applications. But it uses the original Woody brand name in an endorsing role, because fundamentally the products are wood and furniture and people know the brand. Still, there's a conflict: Woody means basic simple wood furniture (to consumers), but it's also a company capable of making a variety of branded products in diverse wood furniture categories. Already the brand is used in an endorser role (small brand logo) for these brands.

    Inserting a sub-brand between the parent name and the category identifier and gradually shifting emphasis to the sub-brand, while simultaneously enlarging the parent brand name's meaning, is one way to go -- we all agree.

    But there is also the possibility of keeping the original brand intact and changing the name at the corporate level. For example, calling it "WoodyCo" and using that name to endorse all sub-brands. This seems a logical approach as it leaves the Woody brand intact and tied to its original simple lines of furniture, while allowing the corporate endorser to be perceived -- as it should be -- as a larger entity.

    Both approaches involve risks, especially short term, but seem to lead to similar long term rewards, if done properly of course.

    Any thoughts?

    By the way, if no new answers come back in a few days I'll just award the points and close the question.

    Thanks again ...
  • Posted on 9/11/2005 at 5:35 PM Member
    The problem in your "Woody" example is that by changing the company name to "WoodyCo" you're suggesting that something has changed, and loyal "Woody" customers are going to have to rethink their decision to stick with the company. You're ASKING them to reconsider their loyalty.

    Further, if you've done a really good job of establishing the Woody positioning as meaning high-quality, simple, wood furniture, then anything that is NOT high-quality, simple, wood furniture will confuse your customers and dilute the equity you have in the brand name and positioning.

    If you introduce another brand name -- say, Arlo -- then you can certainly use Woody as a reference point (e.g., from the designers who created Woody), but the new line is not the same as Woody. It's Arlo.

    Whenever you try to make a single brand serve too many benefits, or different target markets, you are probably looking for trouble. People are pretty good at associating a brand name with a benefit in a well-defined market. They're not willing to make the effort to understand a complicted (i.e., multiple-benefit or multiple-market) positioning.
  • Posted on 9/19/2005 at 9:28 AM Author
    Hi all,

    Sorry for the delay, I was in Munich all week (DrinkTec trade fair) and hadn't time to respond. Thus it was Production Editor Carrie who closed the question and apparently awarded points. I appreciate everyone's efforts, especially mgoodman (Michael?), who in my opinion gave the most thoughtful responses. (I would have liked to have awarded him the highest points but it was not in my hands.) Anyway, thanks again to one and all, and happy marketing ...

    - Carter
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