Brand Ego Trip

Brand stretch – or brand ego trip?

CHAPTER 1

Headlines

Most companies have caught the brand stretching bug, seeing it as a cheaper and less risky way of launching innovation than creating new brands. In reality the benefits are less cut and dried, with the majority of extensions dying an early death. This poor performance is caused by ‘brand ego tripping’: an inward focus on the needs of the business, rather than an outward focus on the consumer and competition. This leads to misplaced complacency about a brand’s ability to stretch profitably into new areas. To avoid falling into the same trap, you need a ruthless focus on adding value for consumers.

Extension advantages

Over 80 per cent of marketing directors in a recent brandgym survey said that brand extension would be the main way of launching new innovation in the next two to three years (Figure 1.1). They look enviously at the stunning success of extensions such as Bacardi Breezer (a rum-based ‘ready-to-drink’ product; Figure 1.2) and think ‘I’ll have some of what they’re having!’ On paper, the advantages of stretching a brand rather than creating a new one do indeed seem compelling: • Consumer knowledge: using an existing, strong brand to promote a new product or service means that there is less need to create awareness and imagery. Associations have already been established and the main task is communicating the specific benefits of the new innovation. In contrast, a new brand starts from scratch: it has to spend heavily just to get itself known. • Consumer trust: beyond merely being known, strong brands are trusted by consumers to deliver against a particular promise. Done well, an extension uses this reputation to create a compelling value proposition in a new segment or market. A survey by the brandgym

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BRAND STRETCH

Most important way of launching new products and services in next 2–3 years

15% 2%

Brand extensions New brand creation Equal 83%

Figure 1.1: Planned use of extensions...