One of the greatest temptations for a brand is whether to stretch into another category.
When I worked on the Yoplait brand ten years ago, there was a debate whether to extend beyond yogurt into chocolate pudding. By a few measures, it made sense. Both yogurt and chocolate pudding are dairy products that sit in the refrigerated case. The market size for pudding is large. It would be efficient to spread brand investment across two categories. Yet the big question remained. Could the Yoplait brand stretch that far? How would pudding consumers feel about a Yoplait pudding? How would pudding affect the health halo that was part of the Yoplait brand?
When I was at Method, we often said we wanted to be “Apple, not Snapple”, meaning we wanted to be a master brand, not a single-category brand. That philosophy led to a brand that successfully stretched from window cleaners to hand soap. But it also led Method into body washes and shaving creams, which proved unsuccessful. We constantly grappled with how far to stretch the brand. The number one category requested by Method consumers was toothpaste.
Deciding how far to stretch a brand is a conundrum. The answer is not one-size-fits-all. Just because the Virgin brand stretches from music to airlines to bridal wear to cell phone service doesn’t mean that every brand can. It can confuse consumers and it can erode the brand.
But the greatest risk of stretching a brand too far is that it creates a distraction from the main business. Chasing a new category can leave the core neglected.
Hiut Denim launches this month with a philosophy I find incredibly refreshing: “Do one thing well”.
“We make jeans. That’s it. Nothing else. No distractions. Nothing to steal our focus. No kidding ourselves that we can be good at everything. No trying to conquer the whole world. We will just do our best to conquer our bit of it. So each day we will come in and make the best jeans we know how. Use the best quality denims. Cut them with an expert eye. And then let our ‘Grand Masters’ behind the sewing machines do the rest.
There is a great deal of satisfaction to be gained from making something well, of such superior quality that you know it is going to stand the test of time. It makes the hard work and the obsessing over each and every detail worth all the effort. That’s our reward. That’s why we stick to just making jeans. Yup, we just make jeans. That’s all folks.”
I’d love to hear your stories on wrestling with the Brand Stretching decision, particularly any ridiculous examples you’ve come across.
(Marketoonist Monday: I’m giving away a signed print of this week’s cartoon. Just share an insightful comment to this week’s post. I’ll pick one comment at 5:00 PST on Monday. Thanks!)
15 CommentsJoin the Discussion
This is a “never enough” topic. I’ve seen many companies wanting to rule the world. What I feel, as a marketer, is that most of the times, this attitude leads to a dilution of a brand reputation. Brands are social members of one of our realtions group and we all know wich role we give to “know-it-all” people. Of course, brand position is almost never sharp, the fuzzyness let brands move in very close and related niches, but the most common idea that people have is: “Ehy, your job is to make yoghurt, what could you possibly know about pudding?” This is, in my opinion the summary of people feeling about brand stretching.
Being a product developer for a company with several brands, I often see this from the other side as well. We may come up with a great product, but if it is something that enters a new area for us the entire team struggles with what to label it.
“How about xyz brand?”
“They don’t fit in the part of the store we are targeting.”
“What if we changed the product to be more like… but then it’s not differentiated enough.”
“How about a new brand?” etc. and we know how crucial branding is to a products success.
There is merit to doing one thing and doing it well, I’m always skeptical of restaurants with long menus. If there are several chefs with unique specialties, that is different from there being one person who may be competent at several items but a master of none. The problem is, consumers do not (often) get to see into the kitchen, or into brands, to know what’s behind the curtain, making it a challenge for them to accept the stretch.
If you have a clearly articulated Brand Purpose, you know which categories fit and which are truly a stretch!
How do you know if your brand can stretch if you never try? In a slow growth economy (like the U.S. faces right now), you need to have category expansion if your objective is growth. Especially if you’re operating in highly-competitive product areas.
I prefer the Virgin style of growth: grow wherever you can. Obviously, you have to do your homework to make your best guess about consumer acceptance, market share expectations, etc. But, in the end, you don’t really know if your brand can “stretch” unless you test it.
I think the bigger mistake most brands make is to dip their toe in the water with their entry into a new category, instead of diving in fully. Then, after weak performance, they cut the new product and stick to their (slowly shrinking) core product set. If you’re not ready to make a big investment in expansion, then stick to your current lines of business.
The best brands can reinvent themselves to sail through the changing tides of the market. A classic example (until recently) is Nokia, which started as a maker of paper pulp, and ended up as a global maker of mobile phones. And, if they’re smart, they will “stretch” their brand again.
Arun Prabhu says
In the early 1990s, Kingfisher Lager Beer (India’s largest selling and also a favourite in Indian restuarants around the world) adopted a new tagline: “The King of Good Times” (www.kingfisherworld.com). While an excellent emotional benefit, it was mostly necessitated by India’s strange laws around advertising alcohol. However, some years later when the UB Group that owns Kingfisher expanded into a totally different sector, they named their new airline Kingfisher Airlines (www.flykingfisher.com) along with the tagline: Fly the Good Times! The post script is that the next brand stretch from beer to airline is to a TV channel. Have a look at goodtimes.ndtv.com and compare the logo in the three websites!
Mariana Q says
Funny that you post this today – this past saturday we saw a lady wearing “Coca Cola” jeans. My husband noticed it, and was puzzled: “Coke jeans? I don’t get it? why is she wearing that? Is she trying to be bubbly and sweet?” were his words. LOL.
My observation — deserves a good study — is that many of the shining examples of successful, broad extension come from corporate brands, such as Virgin (as you cite), Nike, GE, Apple, etc.. When the launch point is the corporate brand it seems that extensions happen, not through “extension” in the classic brand sense, but rather through the creation of product brands and sub-brands. Conversely when the launch point is itself already a product, the bounds of relevant, credible extension, that doesn’t risk equity dilution, are inherently more constraining. That’s my best shot of being insightful as I’d really love the cartoon 🙂
J Nelson says
Great article today, with one over-the top absolutely critical point worth repeating: Chasing a new category can leave the core neglected. Once you are successfully selling a product in an established category, the sad reality is, it does take marketing and selling dollars to maintain your sales/buyer base. And since in straight bottom line profitablity, it’s generally more expensive/resource intensive to enter in new space (not as sexy and fun for the marketers, but more profitable), we really should only expand from a position of true strength (both perceptual and financial) AND have a long term commitment to maintain the origianl business while expanding in the new one.
I think this issue really depends on how the brand value itself. If the brand has a long history of makings something, it’s better to stick to what it has been doing. Just like every individule should find his/her own advantage. Every brand should also find its core value to market.
The theory we work on at my organisation is that brand stretching can work provided the consumer can easily identify each “degree of separation” that links the core product and the brand extended product…and so far this seems to have worked well for us! However, an example from here in Australia of where an organisation seems to have jumped straight from one degree of separation to six degrees is the Coles Supermarket chain who all of a sudden started selling car insurance. The actual link is that the insurance is underwritten by a company called Wesfarmers General Insurance Limited, and Coles are now owned by the Wesfarmers group of companies, but to the average consumer on the street the offering just seems weird and completely disconnected!
All the comments makes me understand why I don’t wear brand products, particularly those visibly labled.
It has been proved that I am also a lousy focus group member. I tell it how I see it and if it is a lousy ad or product I will say so.
One of my clients was an Advertising Director of a large company. I was asked if I liked a particular ad. I had to say something without offending. It was very difficult!
Too many large companies have flexible ethics.
Great dialogue this week on brand stretching. I loved hearing the nuanced opinions on balancing the pursuit of growth with staying mindful of brand purpose.
I agree that there are important considerations in corporate brands version product brands, Rob. And I agree with all the realities of maintaining the core when chasing a new category, J Nelson.
Coca Cola jeans cracks me up. Thanks for sharing that story, Mariana. I also love the specific example of Kingfisher, Arun.
This week’s print goes to Claire. I found the “degrees of separation” a wonderful model to apply for extended products. I also think the Coles example is a classic story of what often happens in an acquisition, when brand fit isn’t considered.
One example of brand stretching I like is the innocent veg pot: http://www.innocentdrinks.co.uk/things_we_make/vegpots/ . A company that makes fruit smoothies extends into vegetable meals. Innocent established such a heritage on healthy food that it was a natural fit. And if you have a smoothie and a veg pot together, you get your 5-a-day (the recommended amount of fruit and veg in the UK). It’s an extension you might not expect (I can’t envision Tropicana veg pots), yet they make it work because their brand stands for something deeper. I’m flying to London today and have a tour of the new innocent office next week. I’ll keep you posted.
Steve Schildwachter says
Tom, great post as usual but I will quibble with one statement near the beginning of your post: “It would be efficient to spread brand investment across two categories.” This is the trap that many brand managers fall into, that advertising investment can stay the same and automatically benefit unadvertised parts of the line. This “efficiency” only works if you have stretched the brand into territory where it belongs, and then only once you’ve firmly earned ownership in that territory.
What marketers are searching for is “Megabrand” status, defined by Nielsen as a brand that exists across different categories. By that definition, neither Coke nor Bud are megabrands because, while huge, compete only in one category.
Crest is one of the few brands that stretched well. P&G took it from healthy teeth to healthy smiles, never losing sight of the “healthy” heritage they always owned.
I agree with Daisy. Having owned the largest Funeral Catering companies in Australiasia, marketing our services was done with sensativity and of course strategy. During our early years of forming this business we employed the services of “marketing experts” and were absolutely shocked at how they suggested we market to those who had just lost loved ones. We quickly decided, that although we no business expertise ourselves really, we would plough on ahead with what we thought would be the right and sensible way to brand and market this business sucessfully.
Many years past and five other companies, (all catering related) were also sucessful, but were individually branded. Being a market leader in After Funeral Catering, we were not prepared in the least to dilute the brand.
Another company we formed which was very easy to market to our exisiting/future clients, was given a completely different brand as the services offered were not in catering. We not only did not want to confuse clients as to where our core business lay, but of course wanted to be in a position to be able to sell this company off separately when the time came.
I enjoyed your article immensly and thank you for the opportunity to comment.