In tough economic times, many companies launch new brands to keep the attention of consumers and stimulate demand at distribution channels. Nothing is wrong with launching new brands. As a matter of fact, now is a very good time to do that.
But to hedge their bets, top management at most companies have chosen to launch line-extensions instead of launching products with new brand names.
Why does this happen? Because line extensions sound so logical to top management that they can’t resist them, especially when budgets are tight.
“We already have a great brand that people trust. Let’s just leverage our powerful brand equity,” goes the thinking of management. “We’ll use our well-known and trusted brand name on this new product which will give our line extension instant credibility. And a line-extension will also be easier to get retail stores to stock the product on their shelves. And our advertising will be more effective because we can put all our money behind one name. Why waste our money on launching a totally new brand, it makes no sense.”
Trying to convince management otherwise is a very difficult job for marketing. The truth is that in the short term, line extensions usually do rack up some sales. Management loves that; they are more interested in saving their quarter than saving the brand.
With sales of $159 million, G2 from Gatorade was the top new food product of 2008. Hard to believe isn’t it? Since it is really one of the worst line-extensions ever, right up there with C2 from Coca-Cola.
But even dumb ideas can sell initially. Crystal Pepsi got a 5 percent share in test markets (unheard of, but one of the best test results ever) but the clear cola product quickly fizzled.
Why does that happen? Silly line-extensions, well supported and discounted at retail, receive the “oh I’ll try it once” effect.
But rarely do they get repeat business especially at full price and in the end any remaining sales just cannibalize the core brand and even worse will undermine the core brand’s position and identity in the mind.
Today, G2 is a product without any buzz. G2 is a product most people tried once because it was part of a huge display and on-sale. G2 is a product is usually only bought by accident, since the package looks exactly like G.
Gatorade is a mess. Put Gatorade on your husband’s grocery list and you are guaranteed a panic call. “Honey is that G or G2 or G3 (probably coming soon and he is clueless.) Is that G with or without Tiger? Is that the power or the liquid? Or do you want this chocolate Gatorade protein bar?” Forget it sweetheart, just get some Red Bull. (Of course he’ll probably come home with Red Bull cola by accident.)
Despite marketing’s advice to the contrary, management just can’t seem to get enough of line-extensions. The store shelves are loaded with them.
But what to name the line extension can be tricky. Besides the “diet,” “light” and “2” extensions, companies have to get a little more creative when it comes to other line extensions. But not too creative. Management likes simple descriptive names. The thinking goes “consumers don’t have the time and we don’t have the money to educate them. So to make it easy for everybody we’ll just add a generic to describe exactly what our line-extension is.”
It sounds so simple and logical, how could it not work? Well it doesn’t. Because marketing is not simple or logical.
Here are three new products that management confidently signed off on, but marketing minds cringe at.
Spray 'n Wash
Spray 'n Wash is the leading pre-wash stain spray. But this new line extension is not prayed on or used before you wash. Instead Spray 'n Wash Bright & White is an bleach-alternative stain remover that you add by the cut into the washing machine. I kid you not.
Even the marketing director for fabric care at Reckitt Benckiser (owner of Spray n’ Wash) admitted that the “Spray ‘n Wash name sounds weird for an in-wash product.” No kidding. Yet she still said that it made sense “to extend an existing brand name.” No it doesn’t.
The product even has a differentiating benefit: It helps to extend the life of your clothes. But stain removers have the image of damaging your clothes it doesn’t make sense that they help save them too. About as logical as Woolite Rug Cleaner, oh yeah Reckitt used to have the dumb extension too.
Haagen-Dazs is the leading super premium ice cream. To take advantage of the trend toward more natural and whole foods they wanted to launch an ice cream composed of just five natural ingredient. (Which begs the question how many unnatural and natural ingredients does regular Haagen-Dazs have?)
So Haagen-Dazs is launching a new line-extension called Five. Haagen-Dazs brand manager Ching-Yee Hu explained that “part of the reason we called it Five is that we have modest marketing dollars and wouldn’t have a lot of money to explain what it was.” Most people still won’t get it and will have a hard time getting over all the junk ingredients in their regular Haagen-Dazs.
Besides, “I think I’ll have vanilla Haagen-Dazs Five tonight?” People just don’t talk like that. When will management listen to marketing? The truly scary thing is that regular Vanilla Haagen-Dazs only has 6 ingredients, so what is the point of Five anyway?
Quaker True Delights
Quaker is the leading oatmeal. Everybody knows oatmeal is good for you. But the glop isn’t necessarily appealing and messy to cook. On the other hand, bars are easy. But most are highly processed and many are high in calories.
Well Quaker has the whole dilemma solved with a new line extension. It has the Quaker name which stands for goodness. It has the name “True Delights” which tells you it tastes good. It has wholesome qualities with ingredients like raspberries, rich dark chocolate, and whole almonds. And the best part is it only has 140 calories! Wow! What more could you want?
Try this over the weekend “Hunny, how about a True Delight tonight?” His face will probably beam, until you throw the Quaker bar at him.
Good News! War in the Boardroom was reviewed in USA Today Monday!