Monday, December 7, 2009
Tuesday, October 27, 2009
3 Questions That Drive Successful Brand Extensions
Brand extensions are risky - but by following the methods of successful extenders, marketers can increase their chances of a win. Looking at what drove recent brand extension success stories, we find the questions of why, what, and how have been carefully considered.
Why?
Perhaps the most important question for a brand extension opportunity is, why should we do this? After all, brand extensions should be governed by what I call the "Spandex principle": Just because you can, doesn't mean you should.
Some brands enjoy deep brand identities -- their brand is like a character in a story which captivates the imagination of its readers. When a brand's target is eager to learn more about it, there's good reason to introduce extensions.
Zappos enjoys this kind of interest. Starting as an online shoe store, Zappos has extended its brand into handbags, apparel, accessories, and now even electronics. In a word, the Zappos brand is about happiness, and so its customers are eager to experience happiness in a broad range of categories. Giving customers opportunities to discover new experiences of its brand identity has been good reason for Zappos to extend. Its deep brand identity has grown the business into a billion-dollar-a-year retailer in less than 10 years.
What?
Aspiring brand extenders ask -- and answer intelligently -- the what question of brand extensions. Determining what products to extend into what categories has been the make or break.
The appropriateness of an extension can be evaluated along three dimensions:
• functional similarity -- similar value is delivered by the current product and extension
• fit with brand values and personality -- the principles and character of the brand resonate in the new category
• organizational capabilities -- the extension leverages organizational strengths and established advantages
P&G has experienced success with Febreze brand extensions because they have been appropriate on all of these dimensions. What they started as a fabric freshener they've extended into candles, air fresheners, and laundry detergent, capitalizing on the categories' similarities in freshening function, brand fit as encapsulated by the tagline "a breath of fresh air," and the company's existing manufacturing and channel strengths. Febreze is a billion dollar brand now.
How?
With the why and what addressed, the last question successful brand extensions have nailed is how do we execute it? This has required fitting the new product into the architecture of the organization's brand portfolio and applying the appropriate visual, nomenclature, and promotional approach.
Whether in a branded house or a house of brands, most successful extensions are introduced within the existing brand architecture of the company's brand portfolio. Google, for example, uses a master brand strategy and continues to add new services and applications under it.
Furthermore Google has implemented a consistent visual and nomenclature approach in its extensions - Google Maps, Google Alerts, Google Finance, etc. all employ the primary Google logo plus a descriptive name featured immediately beneath it. And in promoting extensions Google has relied primarily on awareness generation and messaging to existing users. Google is the world's most valuable brand in part because it's gotten the how of brand extensions right.
Following these brand extensions best practices should enable you to answer a confident "yes" to the ultimate question: "Will the brand extension be a success?"
Why?
Perhaps the most important question for a brand extension opportunity is, why should we do this? After all, brand extensions should be governed by what I call the "Spandex principle": Just because you can, doesn't mean you should.
Some brands enjoy deep brand identities -- their brand is like a character in a story which captivates the imagination of its readers. When a brand's target is eager to learn more about it, there's good reason to introduce extensions.
Zappos enjoys this kind of interest. Starting as an online shoe store, Zappos has extended its brand into handbags, apparel, accessories, and now even electronics. In a word, the Zappos brand is about happiness, and so its customers are eager to experience happiness in a broad range of categories. Giving customers opportunities to discover new experiences of its brand identity has been good reason for Zappos to extend. Its deep brand identity has grown the business into a billion-dollar-a-year retailer in less than 10 years.
What?
Aspiring brand extenders ask -- and answer intelligently -- the what question of brand extensions. Determining what products to extend into what categories has been the make or break.
The appropriateness of an extension can be evaluated along three dimensions:
• functional similarity -- similar value is delivered by the current product and extension
• fit with brand values and personality -- the principles and character of the brand resonate in the new category
• organizational capabilities -- the extension leverages organizational strengths and established advantages
P&G has experienced success with Febreze brand extensions because they have been appropriate on all of these dimensions. What they started as a fabric freshener they've extended into candles, air fresheners, and laundry detergent, capitalizing on the categories' similarities in freshening function, brand fit as encapsulated by the tagline "a breath of fresh air," and the company's existing manufacturing and channel strengths. Febreze is a billion dollar brand now.
How?
With the why and what addressed, the last question successful brand extensions have nailed is how do we execute it? This has required fitting the new product into the architecture of the organization's brand portfolio and applying the appropriate visual, nomenclature, and promotional approach.
Whether in a branded house or a house of brands, most successful extensions are introduced within the existing brand architecture of the company's brand portfolio. Google, for example, uses a master brand strategy and continues to add new services and applications under it.
Furthermore Google has implemented a consistent visual and nomenclature approach in its extensions - Google Maps, Google Alerts, Google Finance, etc. all employ the primary Google logo plus a descriptive name featured immediately beneath it. And in promoting extensions Google has relied primarily on awareness generation and messaging to existing users. Google is the world's most valuable brand in part because it's gotten the how of brand extensions right.
Following these brand extensions best practices should enable you to answer a confident "yes" to the ultimate question: "Will the brand extension be a success?"
Blueprint of Brant Architecture
Ask various marketing sorts what brand architecture (BA) is, and you'll get no shortage of responses: "BA is the execution of positioning;" "BA is what brand extensions need to follow;" "BA is a buzz word for product
strategy;" "BA is like a building blueprint." Could brand architecture really be all those things? The truth is, while people throw this term around freely, they don't necessarily know what it means.
And that truth, unfortunately, comes at a bad time. Given today's proliferation of category and line extensions, BA has never been more important. For the record: BA is the organizing structure for a company and its brands and, by extension, a brand and its products. BA is brought alive through each and every SKU. BA, effectively translated, should make decisions easier, not harder. It should make the brand experience fulfilling, not frustrating.
If you want to see how well BA is working in the field, take a look at a grocery shelf. It isn't a pretty picture. Sensory overload and a glut of choices make shopping these days just plain stressful. The mess on store shelves is not the fault of our colleagues in package design. It is the brand owners' responsibility to provide an underlying strategy and to make sure that what's in, and on, the product makes sense and contributes to a greater whole. That's what BA is supposed to be about.
One company that gets it is the global brand Barilla. Its pasta products are all in a clean and uncluttered blue package with the Barilla oval logo. Below the cellophane window is the subtle-but-important "No. 1 in Italy" benefit reinforcement.
Next, it's on to the type of pasta. Barilla's portfolio of pasta shapes is clearly justified, based on past and predicted usage. A straightforward descriptor (no need for a subbrand or fanciful name) designates each variety, supported by two visuals. There's a see-through panel through which consumers can literally view the pasta itself, and then a photo of the end result: a pasta-filled fork. To simplify matters further, in the U.S., Barilla prints a preparation time right below the pasta's name.
And that's it. It's in perfect sync with our pasta logic. We don't have to work to find our pasta. In fact, we don't even need to know the language to understand the brand or the product—the ultimate torture test for any brand with global aspirations.
With this schematic, Barilla also illustrates the three critical strategic underpinnings of an effective BA:
• Insight guides communications. Some brand owners rely on bells and whistles, form market structure studies to needs analysis. Others innately know what really matters to their consumers. Either way, advertising should communicate the right messages in the right order and manner. Packaging mirrors the purchase-decision thought process. Every communication reflects the brand owners' intimate understanding of their brand.
• Relevance drives offerings. Every product has a reason that suits and enhances the brand. No offerings overlap. If a product doesn't make sense, it's eliminated. When a product is missing, it's obvious.
• Simplicity rules decisions. Smart BA practitioners follow the less-is-more mantra: There aren't a lot of messages; those that exist will more directly drive purchase. The use of subbrands, endorser brands, branded features and ingredients should be justified and minimized. All product names—be they branded or otherwise—are straightforward.
It's our hope that true brand architecture, effectively translated, becomes common practice. Consumers will welcome being able to buy what they want effortlessly. And companies will benefit by giving their brands and products every opportunity to succeed.
strategy;" "BA is like a building blueprint." Could brand architecture really be all those things? The truth is, while people throw this term around freely, they don't necessarily know what it means.
And that truth, unfortunately, comes at a bad time. Given today's proliferation of category and line extensions, BA has never been more important. For the record: BA is the organizing structure for a company and its brands and, by extension, a brand and its products. BA is brought alive through each and every SKU. BA, effectively translated, should make decisions easier, not harder. It should make the brand experience fulfilling, not frustrating.
If you want to see how well BA is working in the field, take a look at a grocery shelf. It isn't a pretty picture. Sensory overload and a glut of choices make shopping these days just plain stressful. The mess on store shelves is not the fault of our colleagues in package design. It is the brand owners' responsibility to provide an underlying strategy and to make sure that what's in, and on, the product makes sense and contributes to a greater whole. That's what BA is supposed to be about.
One company that gets it is the global brand Barilla. Its pasta products are all in a clean and uncluttered blue package with the Barilla oval logo. Below the cellophane window is the subtle-but-important "No. 1 in Italy" benefit reinforcement.
Next, it's on to the type of pasta. Barilla's portfolio of pasta shapes is clearly justified, based on past and predicted usage. A straightforward descriptor (no need for a subbrand or fanciful name) designates each variety, supported by two visuals. There's a see-through panel through which consumers can literally view the pasta itself, and then a photo of the end result: a pasta-filled fork. To simplify matters further, in the U.S., Barilla prints a preparation time right below the pasta's name.
And that's it. It's in perfect sync with our pasta logic. We don't have to work to find our pasta. In fact, we don't even need to know the language to understand the brand or the product—the ultimate torture test for any brand with global aspirations.
With this schematic, Barilla also illustrates the three critical strategic underpinnings of an effective BA:
• Insight guides communications. Some brand owners rely on bells and whistles, form market structure studies to needs analysis. Others innately know what really matters to their consumers. Either way, advertising should communicate the right messages in the right order and manner. Packaging mirrors the purchase-decision thought process. Every communication reflects the brand owners' intimate understanding of their brand.
• Relevance drives offerings. Every product has a reason that suits and enhances the brand. No offerings overlap. If a product doesn't make sense, it's eliminated. When a product is missing, it's obvious.
• Simplicity rules decisions. Smart BA practitioners follow the less-is-more mantra: There aren't a lot of messages; those that exist will more directly drive purchase. The use of subbrands, endorser brands, branded features and ingredients should be justified and minimized. All product names—be they branded or otherwise—are straightforward.
It's our hope that true brand architecture, effectively translated, becomes common practice. Consumers will welcome being able to buy what they want effortlessly. And companies will benefit by giving their brands and products every opportunity to succeed.
Success Factors of Brand Extension
Launching new products can be an attractive growth strategy, however it is not without risks. An increasingly popular approach to reducing risk, when launching new products is to follow a brand extension strategy. Dr. Leif E. Hem have finished him research about the success factors of brand extension in September 2001, his journal name is “Factors Influencing Successful Brand Extension”. He was suggesting four factors that influencing successful brand extension, the factors were:
1. Similarity
1. Similarity
The extensions categories similarity to the parent brand category.
The higher the perceived reputations to the parent brand, more favorable should the brand extensions.
The perceived risk associated with the extension category
The higher consumers innovativeness, the more positive will be the evaluations of the extended brands.
Monday, October 26, 2009
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