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A Stretch in Time – why brands bomb

September 26, 2006

Why does a brand bomb?
And when it doesn’t, what are the secrets that make it a household name? Sometimes brands are so successful that marketers piggyback on it and launch a slew of new products. And these products are hits as well…and it makes us wonder: How did the marketers get it right? What had they done right the first time?
A Sony for example has got everything. Play-stations to Walkmans and digital phones to DVD players. Or take Mitsubishi. It extends to just about everything you can imagine. More examples. Dannon today is selling Dannon water. Brand Virgin is being sold across categories, from airlines to music to even condoms.
Cut to India. Imagine drinking a Colgate Cola or brushing your teeth with a coke toothpaste – yuck! The reality is that once a brand becomes associated with a particular brand category it becomes difficult, if not impossible to extend the brand to another category.

Its a risk.
Many marketers don’t even try. Hindustan Lever has got many different brands in different categories. Ditto Procter & Gamble. However a few like Philips have extended their brand from lighting to medical equipment to consumer durables. ‘Sucessful brand extensions are those which focus on a trend, build upon and stay consistent with the overall equity of the core brand,’ says Professor Das Narayandas of Harvard Business school.

However, in India fast moving consumer goods companies (FMCG’s) have been doing this, and more. While Nirma forayed into toilet soaps from detergents and Amul from milk to chocolates, Britannia went from biscuits to cheese and even pickles. Amul is still struggling to make its mark with chocolates. Britannia once had to withdraw its pickles from the market.

So whats the deal?
What is that makes marketers stretch their brands and tread into dangerously diverse areas? The temptations of leveraging the positive product characteristics of powerful existing brands into new product categories is indeed very strong. In today’s cut-throat market, brand extensions are becoming a common strategy for new product introductions. Check out the positives: A trusted brand name gets instant acceptance from consumers and the trade. Besides, you save the million you would have to spend if you had to build a new brand. But the truth remains that its risky and the question that arises is: how far can you stretch it?

The one fundamental rule is: Stick to the core benefits of the brand. Says Anand Halve, Partner, chlorophyll brand & communications consultancy. ‘Commonality of benefit is a must.’ Amul for example stands for richness of milk and the Utterly Butterly Amul values associated with Amul Butter for over half a century gave Amul Cheese instant place on the shelves. ‘The Amul brand name is an integral part of our success since it communicates the core values of Amul,’ says RS Sodhi, general manager, marketing. There’s a catch here. Amul had virtually no competition in the cheese market for over a decade. And when Britannia entered this market Amul’s share of the market fell almost by half says market analysts.

Amul’s association with milk has also given it an edge in the ice-cream market. Amul ice-cream – Real milk, Real ice-cream – rapidly climbed to number two position in just a short span of three years. Another strategy of Amul’s has been to position the ice-cream in the lower price range. Sodhi admits that the ice-cream’s value-for-money proposition was an important factor in it’s success. So finally, just the brand name cannot get you there.

Commonality of benefit does not mean that you need to address the same target audience. Says Jagdeep Kapoor, managing director of the marketing consultancy Samsika, ‘There are no rights or wrongs. What is important is relevance.’

Nirma’s case is fascinating. After two decades of selling a low-priced detergent – dhoodh jaisi safedi – they entered the soap market by launching Nirma soap, gradually expanding to 7-8 different variants in both the popular and premium segments in the early nineties. It was a major leap, shifting from a low-priced detergent sold on functionality benefits, to a body soap sold on emotional benefits.

How did they do it? By targeting Nirma homes. And sticking to its core value for money equation. Obviously, targeting the Nirma soap or any variant of it, at the Dove woman segment would not have worked. Says Hiren K Patel, chairman and managing director, Nirma Consumer Care, ‘In the beginning, Nirma stood for cleanliness, but over time, it has become synonymous with value for money.’

Its how and when you launch thats most critical.
Its a catch 22 situation – if the brand becomes too strongly associated with a particular product category, extensions fail. Like Xerox, or even Bisleri. If its too early, the mother brand may not have enough brand recall to sustain an extension. K. Ramachandran, managing director, Philips India, says, ‘Right timing helped Philips successfully establish itself across diverse segments.’

Strong brand associations can also be created by positioning – take the example of Hawkins pressure cooker – which may or may not be a deliberate strategy.

Marketers have to keep asking themselves: Where is my brand in the product and category life-cycle? If Amul, which stood for butter, had waited until the cheese category had become crowded, perhaps its butter association would have worked against it. The older the brand, the more careful it has to be in extending itself.

When the 75-year old brand Britannia – Eat healthy, Think Better – decided to extend itself, it was after extensive research. ‘We took another two years to finally decide where to stretch the brand,’ admits Sunil Alagh, managing director, Britannia Industries. Brand research had shown that consumers would not mind a brand extension from the Britannia stable. Its extension into cheese, butter and flavoured milk was a logical next step. though the cheese almost pulled the rug from beneath Amul’s feet, the butter has floundered. ‘The problem was in the taste, not the brand name,’ explains Alagh. ‘We tried to introduce an Amul-like butter. When we had launched the cheese, there was a clear differentiation.’ With the butter being re-launched with an international taste, Alagh is confident of beating Amul.

Most important for marketers.
Finally, the brand extension should end up adding value to the mother brand. Else, not only will the new product category bomb, it could also boomerang on the mother brand. Brand leveraging efforts can put valuable brands at risk. ‘One has to see if the brand extension adds value to the mother brand,’ says Ashok Jain, CEO, Savvy marketers agree.

‘Brand extension is a strategy to make existing brands more robust,’ says Alagh. In the case of Britannia, the extensions have strengthened the core brand value of Health and Milk.

Cost of failure can be high.
If the extension does fail, how badly does it dilute the equity of the mother brand? Vastly, in some cases. If the new product has a different core value and it fails – you could be doomed. ‘When the product is true to the value of the core brand and yet despite this it fails, it leads to limited damage,’ says Arun Adhikari, executive director, Hindustan Lever. One of HLL’s recent ventures into brand extension has been with Lux. The functional equity of pure and mild combined with the emotional value of glamour and fantasy are common to both the soap and shampoo. ‘Its early days, but potentially we think this would be a successful brand extension,’ says Adhikari.

Don’t be cheap.
There are times when companies launch a new product with the same brand name to save on costs. No mistake can be graver than this. ‘Unfortunately companies want to cash in on the exisitng brand, and thats why they fail,’ says Ashok Jain. While no company will admit that a brand was launched primarily for this reason, saving costs is often behind thoughtless brand extensions.

On the other hand, ther are some companies for whom brand extension is never really an option. For P&G, a multiple brand strategy is almost a corporate mantra. Says Gary W Cofer, country manager, India, Sri Lanka, and Bangladesh, ‘P&G believes in building brands that can be trusted and we believe in spending on advertising and marketing to achieve this.’

To each brand its own.

(This article appeared in The Economic Times in the year 2000, and the people quoted may have moved and their designations may have changed.)

Related Reading: How the Taj brand entrenched itself in India
Category Creation – HLL’s deodorant market strategy
Brand Extension and Sub-Branding
Raymond’s brand strategy.

More: The poor quality of after-sales-service in India
Do we really need all those consumer durables?

Advertising Articles: The advantages and disadvantages of advertising on-line
The standards and codes in Indian advertising
other advertising related articles including articles on film-making and successful advertising professionals.

4 Comments leave one →
  1. Abhishek Gupta permalink
    November 2, 2006 12:57 am

    The whole concept of brand “association” in case of extension is in my opinion flawed. The core association of Dove is “moisturizer”. But when Dove deodorant were launched in 2000 (relevance of deo is dryness in ur armpit) the product was simply successful.

    In my opinion, a successful brand (read a household brand which owns the category name like Xerox, Maruti at one time etc.) can extend the brands in many places as long as they donot distort the consumer notion about the same. As the blog itself cites, Colgate as a cola will yuck, as will Coca Cola as a toothpaste. But Colgate can safely venture into mouth gels, chewing gums, mouth freshners etc. Its more about not distorting the customer opinion/mindset of the brand.

  2. December 18, 2007 11:36 am

    u could also add brand Tata….
    no other brand (except virgin) is able to market such diverse products for a diverse strata of the society.

  3. December 18, 2007 2:18 pm

    It’s been such a long time since I got a comment on this one and I realised I had not replied to the first. I used to do that often earlier when I had just started my blog.
    Thanks Ankur. Yes Tata has a very vast and diverse brand portfolio.

  4. rajesh permalink
    January 8, 2008 1:49 pm

    Hi Nita,
    Of late, reading blogs has interested me. I accidently came across your article which you wrote in 2000.

    Its a fantastic well written article with many pointers to originate newer thoughts.

    The branding style has changed quite a bit since then. I will continue to wrie on this as I understand your artcile as its quite full of knowledge.

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