July 20, 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 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: Burberry from adult clothing into children’s clothing; Woolworths from its own shops into ‘shops in shops’; Swatch watches into Swatch jewelry; 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.

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.

But, is brand stretch always successful? Probably not as evidenced by the fact that the of the launches referred to in the introduction to this piece are made under existing brand names. It stands to reason then that the responsibility for failure sometimes rests solely on the shoulders of poor brand stretch.

• Getting into the starting blocks

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

In my opinion, you’ll need to ask yourself 9 critical questions before bursting out of the brand stretch starting blocks:

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

1. Good shape

Marketers sometimes think they can ‘patch’ a brand’s weaknesses by stretching into new innovations. For example, they’ll mutter themselves ‘Consumers think we are old-fashioned; we’ll launch a sexy, new product to show them we’re actually “with it”’.

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.

2. Exhausted growth opportunities

There are often untapped growth opportunities for existing brands that haven’t yet been leveraged, including distribution opportunities, fixing supply, optimizing 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.

3. 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.

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.

You need to know:

- 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 realizing 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.

Consider these examples:

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. (We can assume they redefined their brand vision to extend beyond the realms of motorbikes.)

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’.

4. Brand character

By character, at Added Value we don’t just mean a bullet list of personality traits in a brand positioning tool, we 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.

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.

5. Delivering real advantage

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

Also, be very wary of cannibalizing your 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 jewelry while Dunhill from tobacco moved into designer clothing, accessories, leather goods and even premium coffee.

Even Virgin didn’t get it right 100% of the time. Its stretch has been far more successful in services where it’s taken on the big guns as an irreverent value fighter, providing ground-breaking offers at competitive prices. In the case of its products like its sodas, it often hasn’t offered anything more than competitors and its name alone doesn’t carry sufficient badge value for success in that category.

6. 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 moisturizing and mildness could transfer into other personal care categories, and Dettol’s germ kill properties could transfer into personal care and home care categories.

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.

And in yet other instances, the values a brand stands for can be unifying and help it stretch into other categories, more so than specific product characteristics themselves. Woolworths’ strong association with quality allowed it to launch from clothing into food and indeed, into a wide range of its own food and drink products over time. The concern is that Woolworths may be more successful in perishable foods, given that it came to be known to stand for ‘quality’ and ‘freshness’. The latter doesn’t transfer into non-perishable foods.

Mr Price’s association with ‘contemporary value’ is also strong, but it can be said to be more transferable as it has taken it from clothing into Mr Price Home and Mr Price Sport.

Category expertise or specialization 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.

7. 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.

8. Budget, budget, budget

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

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.

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.

9. 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’.

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.

What do you think? Would these be good or bad stretches?

Dove: Into cosmetics?
Oros: Into fun children’s clothing?
Energade: Into sports apparel?
Woolworths: Into hardware & DIY?
Durex: Into dating services?
Ster-Kinekor: Into broader entertainment offers, beyond movies?
Avis: Into general services beyond ‘transport’?

Written by Alison Tucker, Director, Added Value South Africa, for Trend.Lives.com.

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