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Launch a new brand? Or stretch an existing one?

TRENDAFRiCA July 18, 2013

Given the widely accepted statistic that around 80% of new product launches fail, in these very tough trading conditions, should you be looking to introduce a new brand to consumers or to stretch your brand? Alison Tucker, a director and senior consultant at brand development and marketing insight consultancy Added Value, takes a long, hard look at brand stretching.

Brand stretch involves expanding the offering beyond the brand’s ‘core’. More specifically, it involves launching new products and/or services under an existing brand name, typically into adjacent categories, or into totally new offers and categories.

Examples abound, as Tucker explains: Burberry from adult clothing into children’s clothing; Woolworths from its own shops into ‘shops in shops’; Swatch watches into Swatch jewellery; Tiger Oats breakfast cereal into snack bars; Jeep SUV into Jeep clothing; Davidoff premium tobacco into premium coffee; Bic pens into Bic razors and shaving products; Smirnoff vodka into alcopops; Huggies diapers into baby wipes; and Nando’s peri-peri chicken quick service restaurants into peri-peri sauces sold through retail chains worldwide.

Brand stretches are also achieved by celebrities, and extend beyond endorsements. Examples here include Michael Jordan’s partnership with Nike to market the Nike Air Jordan range; various singing artists’ foray into the world of fragrance and fashion; and Beats by Dr Dre, a set of very expensive earphones.

Attractive option

“Brand owners find brand stretch an attractive option for driving profitable growth, one that is often more attractive than launching a new brand. The reasons for this are myriad and include the fact that there is already awareness of, imagery and associations with, the existing brand built over many years. This provides a ‘short-cut’ and automatic trust.

“Stretching the brand also reduces the business complexity, from a number of brands point of view. It is in-step with large corporations’ desire to have fewer, bigger brands aligned with the concept of master brands and global brands.”

Tucker says there’s also lower investment required, given the ‘borrowed’ awareness, and it’s generally easier to win trade support and shelf space as buyers will perceive the risk to be lower risk because of there being a familiar brand name.

Getting into the starting blocks

Tucker says there’s no quick way to determine if you should stretch your existing brand or launch a new one.

“Sometimes, you’ll see a market opportunity or ‘white space’, and will then begin the process of determining whether to launch a new brand to fill that space or to stretch an existing brand. Other times, you’ll assess your portfolio of brands to see which has the potential to stretch, and then you’ll go looking for the opportunities.

“And then again, you may first examine the existing products or services housed in your company, and brainstorm how these could be modified to create something new, possibly a new opportunity and a new product.”

Tucker says brands need to ask eight critical questions before bursting out of the brand stretch starting blocks:

  1. Is your brand fundamentally in good shape?
  2. Have you exhausted growth opportunities on the core brand?
  3. Have you defined a clear vision for your brand?
  4. Have you defined the essential character of your brand?
  5. Can you deliver a real advantage versus what is currently available to consumers?
  6. Do you clearly understand what is going to serve as the glue to hold your brand together?
  7. Is the symbiotic relationship between the brand and its stretch innovation sufficiently balanced?
  8. Do you have sufficient resources and are you ready to invest?

Good shape

Marketers sometimes think they can ‘patch’ a brand’s weaknesses by stretching into new innovations, Tucker says.

“Unfortunately, stretching a brand is not the same as fixing it, and simply launching a new product won’t cut the deal. You need to ensure the relevancy of the brand’s positioning and the optimisation of its expression in the first instance. Only consider stretching if your core brand is inherently strong and healthy.”

Exhausted growth opportunities

There are often untapped growth opportunities for existing brands that haven’t yet been leveraged, including distribution opportunities, fixing supply, optimising the mix, penetrating new occasions, growing awareness and trial, for example.

“However exciting the appeal of stretching a brand may be, if you haven’t yet exploited all the available opportunities for growth on the core brand, don’t walk away from these. Consider trying to achieve both simultaneously if you have the means, but keep your eye on both balls so that you don’t neglect the core at the expense of brand stretch.”

Clear vision

“Sometimes it can feel like you are advancing your brand by being innovative and stretching it when, in reality, you may not have defined a future vision for the brand in the first place,” Tucker points out.

“The brand vision defines where the brand wants to ‘play’, what it stands for and what it wants to become. It highlights who the competitors really are. Understanding and unpacking the brand truths is helpful input into thinking about brand vision.”

Tucker says brands need to know the following:

  • What the brand stands for in the minds of consumers.
  • What its emotional connection with them is.
  • What long-standing beliefs and roots the brand has.
  • What it is and isn’t.
  • What it’s a specialist in.

“Brand stretch should be seen as an aid to take the brand to where you want it to be in the future.  It can be part of a brand’s episodic journey towards realising its vision. When the brand vision is clear, it becomes easier to decide whether a particular stretch is the right one for the brand. It also helps on decisions around the sequencing of innovations and/or stretching activities over time.”

The following examples apply, says Tucker:

  • Durex acknowledging they aren’t in the business of ‘contraception’ but rather in ‘intimacy’, as evidenced in their stream of innovations in the personal intimacy category.
  • Yamaha stretching from motorbikes into sporting equipment and music equipment.
  • Sunlight stretching from the original laundry bar into broader cleaning such as dishwashing and hair, presumably acknowledging that the brand has inherent equity and brand truths that allow it to stretch across cleaning categories.
  • Caterpillar stretching from construction equipment and vehicles into rugged clothing, transferring the equity it has in ‘hard working and endurance’.

Brand character

By character, at Added Value they don’t just mean a bullet list of personality traits in a brand positioning tool, they mean an archetypal-inspired, rich character portrait that brings the brand to life in a way that leaves no doubt around its tonality, values, point of view, what it stands for, and so on.

Says Tucker: “This is because true character can be the glue that helps hold a brand together, especially when stretching a brand and running the risk of brand schizophrenia.

“Unfortunately, new products are often launched under an existing brand name, and get enticed into being out of character for their brand. They are often seduced into new category ‘generic characters’ or characters inspired by their desire to be novel and innovative, instead of being true to the essential character of their long-standing brand.”

Delivering real advantage

One of the single biggest risks in innovation is simply being a ‘me-too’, says Tucker.

“The same applies when innovating via brand stretch. You need to ask questions such as ‘Can my brand really bring something totally unique and different, yet relevant, to this category?’ and ‘How will my stretched brand better satisfy a real consumer need?’

“If you can’t offer strong answers to these questions, you should forget about stretching.”

She says brand must also be very wary of cannibalising their existing brand’s market, particularly if what the brand is offering from a stretch point of view is not significantly different to what the brand currently offers.

“This is especially treacherous when the profitability of the innovation doesn’t meet the same levels as the core brand. And, the simple fact that the consumer can now access your brand in another category is not necessarily a valid advantage.”

In reality, very few brands are true lifestyle brands that can successfully stretch into just about any self-expressive category on the basis of offering a brand name. This is often the sole domain of luxury brands. Mont Blanc, for example, successfully stretched from pens and ink into fragrance, office accessories and jewellery; while Dunhill moved from tobacco into designer clothing, accessories, leather goods and even premium coffee.

The glue that glues

“Sometimes product characteristics are defining properties that consumers buy into. These product characteristics can transfer into other categories, going some way to being the brand glue. For example, Dove soap bar’s stance for moisturising and mildness could transfer into other personal care categories, and Dettol’s germ kill properties could transfer into personal care and home care categories.”

She explains that in other cases, the brand can be so strongly associated with a particular product attribute or product or category that it makes it difficult to stretch beyond into other products. Beer brands, for example, would find it difficult to be anything else but beer. Yes, Castle has launched into South African lifestyle products such as meat marinades, but only time will tell how successful this will be, Tucker says.

“Category expertise or specialisation can be a source of ‘glued-together’ stretch into adjacent categories. Here, think of Nescafe from coffee into coffee appliances; and Oral B from dental care products into electric toothbrushes and other dental care ‘equipment’. There’s also Black Cat Peanut Butter and its energy bars; and Energade and its energy jelly babies.”

Balance and symbiosis

“Marketers relish the opportunity to ‘steal’ equity and credibility from the core brand, but think less about the need for the stretch innovation to give back and build on the core. However, marketing theory tells us that there needs to be a symbiotic relationship between a core brand and the stretch innovation so that the core offering of credibility is rewarded or reinforced by the brand stretch.

“What the innovation gives back to the core brand is critical, and needs to go beyond ‘modernity’, which is often used as the scapegoat for the lack of identifying anything else more powerful. The new innovation must contribute something to the core brand, building and further entrenching its values,” Tucker emphasises.

Budget, budget, budget

All innovation requires a considerable commitment to investment. Sometimes, an existing brand’s lacklustre growth is even attributable to the lack of investment, rather than much else, she suggests.

“If you haven’t invested sufficiently in the core brand, perhaps you should get that right first. If you have, don’t underestimate the need to invest when going on to stretch your brand.

“Yes, it’s a short-cut using an existing brand and it therefore costs less than launching an entirely new brand, but you still have a message to deliver and you still have to create awareness of the new offer. That costs time and money.

“In addition, this need to invest calls for a degree of focus. There’s often a temptation to launch a whole battery of stretch innovations in quick succession, but this is seldom affordable.”

Tucker worries that many innovation stretch plans are over-ambitious in their intentions around the number and timing of launches: “You need to design realistic episodic launch plan journeys with carefully sequenced innovations and you need to revisit and revaluate timing as you progress through the journey.”

Beware neglecting the core when focused on stretch

It’s only natural that, once you have decided to stretch your brand, the stretch activity becomes the area of focus and the resource and energy is poured into it. However, don’t forget the core brand still requires ongoing maintenance; don’t neglect it or treat it like a ‘stepchild’, she emphasises.

“Marketers often battle to get the balance right between addressing and maintaining the core and innovating around and beyond the core. It’s a difficult balancing act, but one that demands and deserves careful consideration.”

 

Source: Added Value is a TRENDspotter partner to TREND.

 

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