Topic: Branding

Line Extension

Posted by Anonymous on 250 Points
When is line extension a successful tactic?
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  • Posted by mgoodman on Member
    Generally speaking, when the primary benefit and the target audience are the same, line extensions make sense. When the primary benefit is different or the target audience is different, line extensions probably don't make so much sense.

    Example: When toasted-corn flavored Dorito's were the only flavor of tortilla chips on the supermarket shelf, Frito-Lay introduced a line extension called "Nacho Cheese" Doritos. It was simply a different flavor, but with the same shape and "crunch" benefit in a salty snack.

    When Crest had more secondary benefits than it could cram into a single ad (whitening, breath freshening, periodontal health, etc.), P&G simply introduced line extensions to its already successful cavity-prevention (i.e., fluoride-containing) brand.

    Etc. Etc. Etc.

    The key in each case is that the target audience is the same and the core benefit is the same.

    Are there examples of successful line extensions that didn't meet these criteria? Maybe, but I can't think of any. (Or maybe it depends on how you define success.)

    I had a client once who was determined to go the line extension approach, even though the benefit and target audience were both different from those of the parent brand. He thought he was successful, because he was able to get the line extensions on the shelf and thus capture more total shelf space for his brand. The fact that the line extensions never generated much volume, and were eventually dropped, didn't stop the client from claiming "success" at getting the items listed and into stores. (Go figure. The client didn't care about profitability!)

    Hope this helps.
  • Posted by wnelson on Member
    Michael has given you very good guidelines as to when a line extension makes sense. He states that when the primary benefit and target audience are the same, a line extension makes sense. He gives some very good examples. The flip side - when a line extension doesn't make sense - can be stated a little differently. The line extension doesn't make sense when it delutes the brand and detracts from it. This happens because consumers become confused about what the brand stands for.

    For instance, Bic had a very successful pen business. Then, they extended the brand to lighters - Bic Flick. It had a catchy name, but had little to do with the pen business. Then they introduced cheap disposable razors. OK, you could way they all have the same benefit - cheap and disposable. The Bic list goes on and on. And none of the extensions had the success of the pens. And in fact, with all the resources deluted on lighters and razors and everything else, the leadership they had in the pens is gone. A more logical extension would have been to make highlighters and permanent markers and the like. Now, they have finally gotten around to doing that.

    The Bic Flick was the first disposable lighter. Being first and novel is a good thing in branding. Had Bic invested in a different brand name instead of extending their current name, and extended Bic into other kinds of pens, then they may still have leadership in pens and lighters. So, if the fit isn't right, then instead of a brand extension, companies should make a separate brand. Granted, this costs more, but the value of both brands is greater than what happens to the primary brand that gets extended into obscurity in the consumers' minds.

    I hope this helps.

  • Posted on Author
    That was helpful...

    I agree, it depends how we define success. Getting a shelf space in a crammed supermarket by capitalizng on the famous brand name is not a success. I d rather sell it in down market in small groceries by different name where i make profit.

    Take Dove, premium Unilever item. They start with dove shower gel range, dove body lotion range, dove shampoos and dove hair stylie and etc. According to your logic, each range serving different audience but communicate the same benefit (mosturizing)..Do you think this could become a sucessful line extention? or already is?
  • Posted by wnelson on Member
    Michael can add his own opinion here, but I would say that the line extension makes sense - since they are all for the same general benefit - moisturing - and same audience - mainly ladies. The could even extend into lady's shave cream without to much of an issue. I would say they have been successful from a standpoint of not taking away from the brand. I think that most people would think soap with 1/4 cleansing cream when you say Dove. The extensions haven't taken away from that image. And with shower gel - that's just another form of the soap. Lotion - well that's cream. Hair styling...that's a stretch, maybe, but hair needs moisture to protect it from drying.

    I don't necessarily think they have been all that successful with the extensions. For instance, in shower gel, I think of Softsoap or Suave first. I'd be hard pressed to come up with Dove shower gel if you asked me to make a list. Funny thing is, now that I think about it, I bought that brand for my parents when they visited, too, but I still wouldn't think of them. For lotion, I'd think Jergens, Curel. Not Dove. I even think of Palmolive Dish soap in the category of "hand cream" before Dove. And Dove hair style? Never heard of that. So success from an extension point of view? Well, they certainly haven't migrated to the top of the list in the other categories in my mind. But, I'm just one consumer. I don't have share or sales figures - just my impressions. Oh, and I'm not necessarily representative because I'm not a user of moisturizing products nor am I their target.

  • Posted by mgoodman on Accepted
    I think the Dove example is probably a good one for a line extension that makes sense. Same target audience, same key benefit.

    As for success, I'm not sure, but I think the folks at Unilever are pretty smart and I'm guessing they gave this a lot of thought before they introduced each line extension. (I know some senior people there, and I can't imagine they'd take something like this lightly.)

    An interesting point (responding to something Wayde suggested): You don't have to be #1 or #2 to be very successful in some of these categories, especially if you use the line extension approach. Everytime Lever advertizes Dove (the bar soap), they are effectively advertising everything else in the line. Net, the direct advertising expense for the line extensions is minimal, and profitability can be quite high as a result.

    I'm guessing the Dove line extensions are a very valuable and important part of the Unilever portfolio.
  • Posted by wnelson on Member
    I yield to the gentleman formerly from P&G. If anyone would know that Dove's extensions are a success, he would.

  • Posted on Author
    Michael, wayde and vin thanks for the contributions..

    Intersting viwes for a very interesting topic..i guess i still have a confusion. when we say line extention, does it mean that the new one has to bear the same parent name even if we hae extra discriptive word? for example,

    does the porsche cayane (SUV)/ Carera/911, classify as a line extention of porsche??

    Gillette shaving cream, gillette venus machine, gillette turbo??

  • Posted by mgoodman on Member
    The answer to the question you pose is a little ambiguous -- especially when the COMPANY name is also a BRAND NAME, like Porsche and Gillette.

    In the case of P&G or Unilever, where brands don't carry the company name, the brand extension issue is pretty clear-cut. It's either called Ivory (soap) or Ivory Flakes, or Ivory liquid detergent -- all line extensions of Ivory (soap). Same with Dove.

    When companies use their company name as a brand name (like Porsche, for example), then the brand name isn't the same kind of line extension, because the brand that's line-extended actually has the same name as prior brands (i.e., the company name), and they need an additional desgnator of some kind -- either a model number or a second brand name -- like the VW Passat -- which is a VW AND a Passat.

    Don't get hung up in the semantics.

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