Know-How Exchange : Strategy

Most people cannot store a brand image in their minds if it contains too many features and/or benefits. Brand recall, as measured in consumer research, is greatest when there is just one benefit. That's why Ries and Trout are still right ... despite a lot of changes in media and lots of new brands and categories (since their original book on Positioning).

What has happened is that advertising has become more fragmented over the years, so marketers are tempted to see if they can add new benefits, or even re-position a brand. It rarely works. Volvo still owns "safe cars." Toyota still owns "reliability." Etc.

In your example with Crest, the brand's distinctive positioning (for fighting cavities) has become generic in the category, so they are trying to find another reason for being. At this point they have so many different line extensions and multiple benefits, that I suspect their brand image is fuzzy and fading fast. It's not like P&G, but they are obviously not perfect.

Al Ries and Jack Trout are as relevant today as they were when they wrote their all time classic book. It is the marketing fraternity who in trying to break through and appeal to the customer mistakenly uses an all in one approach hoping something will work and most times nothing works. It leaves the buyer confused. Confusion never leads to action, clarity does.

There have been cases where brands have taken more than one and sometimes conflicting brand characters and have built successful brands - BMW - Luxury and Performance.

Brands always are attempting to tell a story on behalf of the product. The story has to be powerful, believable, clear and must capture the imagination of the audience.

In 22 Immutable Laws of Mareketing, Ries and Trout categorically condemn line extensions. They list an impressive number of failures: Miller, General Electric and Heinz. In their view, if you don’t make brand stretching an absolute no-no, you ‘re bound for disaster. But there are still many examples doing well: Johnson& Johnson Baby Oil’s launch of a perfume, Pierre Cardin’s foray into dishware, and Bic’s venture into pantyhose.

From my view of point, using existing brands to launch new products makes economies of scale possible. This answers an economic necessity. Moreover, the consumer’s saturation level has been reached. Too many brands kill brands. Faced with their sheer number, the consumer might reduce them to empty names.

I think Brand extensions are inevitable. In 1992 and 1993, more than 75% of new products in the US were launched under an existing brand. They can’t all be wrong. Like the case of Crest, it’s right to do line-extension. Because if you launch as many brands as possible for its each Taste, Whitening or other attribute toothpaste, it’s impossible to afford. Besides, toothpaste is in such a low-interest category, like Tissue category, which consumers will not pay much attention to brand differentiation instead of Brand reputation. However, with the risk of becoming commoditization led by brand dilution, the brand must be upgraded even as it is extended. Horizontal extension. Vertical upgrading. Having a vision enables you to combine these two movements and keep brand healthy. So I still think Positioning Theory is outdated and should be updated! Right?

Really impressive!! Unique target audience or benefit. It''s the princple. Good case presented in the book, Positioning: the battle for the mind, is Xerox, which was perceived as a printer company. Unfortunately, it did line-extension to develop office system business and failed in the end. This is because Xerox has been perceived as printer company and if its product can''t print, it won''t be the prodcut from Xerox. That''s why it ended up failure in business.

But, in reality, it''s not easy to find the line between healthy line-extention and over-line-extension. There is a case I wanna show to discuss whether it''s over-line-extension.

There is a No.1 company which specialized in Microwave and has become the leader in Microwave category in that country (A old news long time ago, so I forgot the country name). A few years later, this firm found that the air condition business was really hot so it pour a lot of effort to develop the air condition business category. For me, I think this line-extension make sense, cos it''s still in the electric appliance category. But since then, a lot of marketing experts still attack that line-extension strategy saying that it may dilute the Microwave leadership and make the brand weak, because people will think that if that brand(Microwave ledership) can''t not make microwave like in Air Condition appliance, it won''t be the product from that brand. This arguement, I think, is from the concern that this company has been perceived as blowing Micro wave brand and it only can make good Microwave appliance.

So dose the dispute make sense? It''s a struggling confusing question for me. Hope everyone can answer it!
Thanks~

I understand that sometime the line between line extension and new brand can be a little fuzzy. That's when I'd play it safe and go for "new brand."

The rationale: It's much more difficult to change a brand positioning -- i.e., to reposition a brand -- than it is to create a new brand. After all, brand images reside in customers' minds, and once they've taken up residence, it's very difficult to modify or evict them.

I've worked on dozens of positioning and re-positioning projects -- for big companies and small companies, across a very broad range of industries and product categories -- and I've seen first hand how much damage you can do when you try to re-position a brand and it doesn't work the way you want it to. For me, it isn't worth the risk when you can create a new brand and sidestep that risk.

It may SEEM easy enough to take advantage of a strong brand name by using it on a line extension or for a new target audience, but more often than not it only weakens the parent brand.

Are there exceptions? Of course. That's why smart marketers hire consultants with experience in this area when they're faced with these kinds of issues. When you've dealt with these decisions enough times, the process starts to look familiar and instinct takes over.

In your example of the microwave company and their desire to introduce air conditioners, they established an image based on a single product line -- microwaves. People got it, and the brand image was "the microwave company" in consumers' minds.

Then the company managers said, "Well if people understand that we make electrical appliances, they'll love our air conditioners." They could have said, "If people understand that we make things that have four different vowels in their names (A, E, I and O), they'll love our slot machines."

The problem is that people don't store brand images in their brains based on the number of vowels in the name or the source of power (e.g., electricity, nuclear, waterwheel, solar, etc.). They store brand images based on the way they first perceive them and the benefit(s) they experience.

So if you present yourself as a microwave company initially, they'll remember you that way. And if you try to extend that later, they'll either ignore your line extension or discard your original brand image -- or both. The dissonance will shake them up and their brains will have to adjust.

That's why line extensions work best when the target audience and the core benefit are the same for the line extension as for the parent brand.

When the Brand - Category association becomes very strongly entrenched in the minds of consumers, that brand becomes difficult to extend in another category. A case in point, we have a brand of cosmetic products in our country which is synonymous with facial and skin care products. The company introduced a line of dental products and product bombed. Research showed later that consumers associated the brand with skin care products and were uncomfortable using a toothpaste with the same brand.

Thanks for all your contribution. That's really helpful! lol I love this forum and can learn a lot!

Back to my case, that company I said in my case , leader in microwave appliance, is also an high-end product in the microwave industry. You can say premium or prestige attribute in that category. Well, is that any chance to pass this premium or prestige perception to other electrical appliance like high-end Air Conditioner?

Like Dove, the premium Unilever item did. They are marketing Dove shower gel, Dove body lotion range, Dove shampoos and dove hair stylie and etc. Dove's attribute is moisturizing. It pass the " Moisture" perception to line-extension products even like hair styling. And Dove do well. The other case is Mercedes-Benz. It own the "Prestige" attribute and it line-extended the attribute to bus.

Is this a saving way to do that?

"Positioning" is very important to market your product. By "Positioning" right you reach the exact target audience for whom the product is meant / targeted for, just like a bullet out of a rifle hits its target. But, if your product and the after service (if any) related to that product happens to be bad any great effort on "Positioning" would do no good.

Further, usually the customer develops a strong perception about your capabilities (as a company) based on the brand image your product has created in their mind. So, if Dove is doing well with their line-extension products, it is because already the company has created a perception that they are good and have expertise at toiletries. Further, they could sustain and succeed by living up to this perception & expectation of the customers by offering good products.

Definitely, in the case you refer, the company may be good at "Microwave". But, the air-conditioning technology is entirely different from "Microwave" technology. The technological effects are entirely opposite to each other. So, it is not at all a case of line-extension product. So, they have to establish that they are good at air-conditioners also. Though, definitely a new branding would be required as argued above by other contributors.

Why are you fighting so hard to keep the company name and apply it to a seemingly unrelated product category?

If the company image is really "high-end products" then maybe you could use the brand for an expensive perfume or a gourmet restaurant or an expensive brand of champagne.

Sound ridiculous? So does putting the microwave name on an air conditioner.

You may be too close to this to see the disconnect, but I think you can see we're all steering you away from this line extension.

What's the attraction of the line extension for you?