Marketing Minute: Understanding brand extensions – Aug/Sept 2023

By Paul Friederichsen

The hard truth about brands is that if the brand isn’t growing, it’s dying. Most marketers are familiar with the brand adoption lifecycle, illustrated by the classic bell curve. At the beginning of the curve, there is an innovative concept that becomes the brand. At the apex of the curve, the brand reaches maturity and begins its inevitable decline. Marketers will do any number of things to avoid the fall before being overtaken by a competitor or reaching saturation in their market. Extending the brand’s reach into other areas is one way to give it a new lease on life. However, this move is not without risks.

FAILED CASE STUDIES
Many years ago, The Home Depot (THD) introduced a truly innovative type of flooring with a catchy proprietary brand name: TrafficMaster. It was an instant success. In fact, even as my client was setting up the first aisle display in a store test, customers were elbowing their way past the merchandising team and loading up their carts with the new product. Soon, THD reported that TrafficMaster was among the best new product introductions in the retail chain’s history. It skipped past a limited test to nationwide distribution in record time.

So, what did THD do next? It slapped the name of this new product on a range of ordinary flooring products to capitalize on the popularity of the recent introduction. There was nothing special or innovative about the other products; they just now bore the same proprietary name. In the retailer’s enthusiasm to cash in on its new success, it ran the risk of losing customers in the confusion or through the failure to meet expectations.

In another case, this same retailer also took its highly popular proprietary label for ceiling fans and lighting fixtures, Hampton Bay, and applied it to patio furniture and other somewhat odd and dubious connections to the original product line. Product managers and category captains are always looking for ways to gain advantage over a competitor by leveraging the popularity of a brand into other departments, in hopes that the customer will blindly follow. The risk here was stretching brand credibility beyond its core competency.

Both stories are examples of a brand extension strategy as part of brand architecture. In this case, marketers are counting on the awareness, positive associations and quality perceptions of the original brand to make the brand extension across a new range of products more credible to existing customers and more desirable to new customers.

As usual in marketing lore, there are numerous bad examples where well-intentioned brand managers made bone-headed, even laughable, brand-extension decisions:
• Colgate Kitchen Entrees: Colgate, a popular toothpaste, ventured into the frozen food market with Colgate Kitchen Entrees in the 1980s. The brand extension failed because consumers associated Colgate with toothpaste, oral hygiene and cleanliness, making it difficult to associate with food.
• Cosmopolitan Yogurt: Cosmopolitan magazine, known for its content focused on fashion, beauty and lifestyle, launched a line of yogurt in partnership with Yoplait in 1999. The attempt to extend the brand into the food industry was not well received by consumers, as they did not associate Cosmopolitan with yogurt.
• Harley-Davidson Perfume: To expand its brand beyond motorcycles, Harley-Davidson launched a line of perfumes for men and women in 1996. However, the perfume line failed to resonate with consumers, as they did not associate the motorcycle brand with fragrance or personal care products.
• Zippo Fashion Line: Zippo, renowned for its windproof lighters, attempted to enter the fashion industry in the late 1990s by introducing a clothing line. Despite the brand’s strong association with durability and utility, the fashion extension did not align with the brand’s core values.
• Bic Disposable Underwear: Bic, a well-known brand famous for its disposable pens and razors, attempted to extend its product line into disposable underwear in the 1970s. The brand extension was met with skepticism and consumer resistance since Bic did not have the necessary credibility or expertise in the clothing industry.
• Kodak Digital Cameras: Kodak, a leading brand in traditional film photography, was slow to adapt to the digital revolution. When the brand eventually entered the digital camera market, its products failed to compete with established digital camera brands like Canon and Nikon. Kodak’s brand equity did not extend seamlessly into the digital realm.

The common reason for most of these errors is a lack of brand alignment. It’s not that the Colgate Kitchen Entrees packaging was bad or that guys who ride Harleys don’t appreciate wearing a nice perfume. It’s because, at its foundation, the marketers didn’t understand their customers and why they were loyal to the brand in the first place.

METHODS FOR SUCCESS
To cultivate customer loyalty, you must dive deeper into understanding the relationship between your brand and your customer. This process strengthens and deepens the bond between customer and brand. Poor brand extensions, on the other hand, run the risk of diminishing that bond so that the customer may look elsewhere and be more open to other options.

To be in alignment with your customer requires more than a simplistic or situational equation, such as, “We have this really innovative flooring product, so lets call all our other flooring products the same thing and see if anybody notices,” or “We have ceiling fans. Ceiling fans can go in porches, so patio furniture is an obvious extension.”

To stave off brand decline and continue brand growth, seek ways to remain relevant to your customers’ needs and expectations through continued innovation and marketing. If a brand extension does look necessary, measure your decision against these eight strategies, compiled by Derrick Daye of The Blake Project:
1. Similar product in a different form: This is where a company changes the form of the product from the original parent product.
2. Distinctive flavor/ingredient/component: When a brand “owns” a flavor, ingredient or component, there may be other categories where consumers want that property.
3. Benefit/attribute/feature: Many brands “own” a benefit, attribute or feature that can be extended.
4. Expertise: Over time, certain brands may gain a reputation for having expertise in a given area. Leverage can be achieved when extending into areas where this special expertise is deemed important.
5. Companion products: Some brand extensions are a “natural” companion to the products the company already makes.
6. Vertical extensions: Some brand extensions are vertical extensions of what they currently offer. A brand can use its “ingredient/component” heritage to launch products in a more (or sometimes less) finished form.
7. Same customer base: Many brand extensions represent a marketer’s effort to sell something else to its customer base.
8. Designer image/status: Certain brands convey status and hence create an image for the user.

APPLYING IT TO YOUR BUSINESS
Many flooring manufacturers have extended their brand to include LVT and rigid core products out of necessity in recent years. These marketers must find the common bond between their original brand and the extension. Once identified, they must realign their brand positioning and craft their messaging to communicate customer benefit.

While it is true that most of these manufacturers have no consumer marketing concerns, their ultimate customer remains the consumer. Distributors, retailers and OEM customers are no less important when it comes to brand marketing and properly executed brand extensions.

Copyright 2023 Floor Focus

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