Brand stretch...to do or not to do

With innovation and NPD coming under increasing focus as companies find ways to grow revenue, the related aspect of brand stretch has also become a topic of interest across the board – from entrepreneurs to corporate boardrooms.

Two key and interrelated questions which typically face us when we talk of brand stretch. i) Where to stretch ie what categories to extend into. And ii) How to stretch ie the branding approach to take (in terms of using the mother brand, creating a new brand or a sub brand etc)

 

When one looks at a cross section of brands and their extension strategies, it seems to throw up more questions than answers at first. How does Dove extend seamlessly, from one personal care category to another…while Colgate struggles with establishing its Gel products in India more than two decades after its launch? What gives Fabindia the courage to foray into organic foods and jewellery, and elicit a reaction from consumers which says ‘great idea’! Why it doesn’t seem odd that Virgin  could extend from music to airlines, AND  it also seems intuitively right when Frito launches a new brand (Aliva) for its biscuits foray, and doesn’t use Lays/Kurkure. 

Why does the same extension strategy work for one company/brand and not for the other? There are extensions into adjacent categories that are not always successful…while extensions into unrelated categories are….


Let's first examine the whole concept of  'FIT'  - a word which comes up frequently when we talk about extensions. And we usually think of fit in terms of adjacent categories. But actually what is more relevant than fit is core values - the deeper meaning of the brand. Core values can be beyond just category, beyond just functional…assuming of course that the brand has a deeper meaning. It is possible that the core values of a brand are very strongly entrenched in a functional benefit space, and that then is the reality of that brand (eg Colgate). But equally there are many brands which have a meaning to consumers that transcend the functional (eg Ponds & Beauty or Dove & softness or Samsung & technology). And this wider meaning of the brand has am impact on what areas the brand can extend to...

The construct below (which I have adapted and modified from a construct by Kapferer), provides an explanation for successful and not-so-successful brand stretch...

Placing brands along the tangible-intangible scale, you’ll have Colgate with its very functional “strong teeth” benefit towards one end of the scale. Further ahead would be a brand like Dove which has over the years built the value of softness (on the back of a strong 1/4th moisturizing cream of its soaps). Now the value of softness is beyond a functional space, and beyond a category…and when there are benefits which extend beyond a category or functional space, it imbues the brand with a certain expertise which enables it to extend across multiple categories.  eg softness for Dove increases the potential for a more diverse range of brand extensions into adjacent categories. And lastly you’d have brands like Virgin /Fabinidia which have come to stand for a certain philosophy. The philosophy could be rooted in a personality (Virgin) or a sourcing and selling strategy (Fabindia) or a way of conducting business (ethically as in the case of Tatas). 

The heart of this framework really is  that the wider the meaning of a brand beyond functional attributes, the greater the ability of the brand to stretch to more dissimilar territory WITH THE SAME BRAND NAME OR WITH THE MOTHER BRAND PLAYING A SIGNIFICANT ROLE AS AN ENDORSER. So Expertise brands are able to extend into more dissimilar territory than functional brands, and philosophy brands are able to extend into more dissimilar territory than Expertise brands. As the meaning of the brand becomes deeper it has the potential to span a greater width of categories.

In essence...
When addressing the issue of brand stretch, it's not just about exploring  relevant adjacent categories. It is about determining the core values of the brand - as the consumer sees them - and using that as a springboard for the extension approach.