December 17, 2008
Really Bad Line Extensions Get Their Due
Forget about
innovative new products. Think line extensions, and pretty bad ones at
that. It’s not hard to see that there are plenty of products that fit the
bill, but a poll conducted for Brandweek identified
what marketing professionals felt were the absolute dregs of 2008.
At
the top (or would that be bottom?) of the list was Burger King underwear.
(The company’s new cologne gets our vote). Among the list of derided items
was also Allstate Green insurance, Coca-Cola’s RPet clothing at Wal-Mart,
Kellogg’s hip-hot streetwear, Playboy’s energy drink and Sleeping
Beauty executive fountain pens from Disney priced at up to $1,200.
"The
bad ideas keep flowing. It’s amazing and there’s nothing we can do to stop
it," said Robert Sprung, co-founder of the TippingSprung,
which has conducted the study for Brandweek for
five years.
"Marketers
are so in love with their brands that they think consumers are as well
and will go to the lengths of wearing their brand name on their underwear," said
Laura Ries, cofounder of Ries & Ries. "While people love the Whopper, they don’t want
to parade around in underwear that says, ‘This is where my big, fat ass
came from.’"
The
emphasis on green marketing led to a number of missteps, according to the Brandweek poll.
Allstate’s
Green insurance was noted as a prime example of greenwashing.
The company offers paperless statements (very common today) and says it
will donate $10 to an unnamed environmental organization.
Neither was the Coke RPet clothing
line, made from recycled PET bottles, given points for its
eco-friendliness. Almost 58 percent of respondents said the line was more
about greenwashing than
green.
Discussion Questions:
Does the number of line extensions today point to marketers who are less
innovative than in the past? What gets your vote as the best and worst
line extensions of 2008?
BrainTrust
Recent Discussions
Discussion Questions
Poll
We’re missing the point that line extensions and licensing are often about acquiring shelf space. Newest research suggests today’s customer isn’t as likely to prefer a line extension they deem to be inconsistent with their perception of the original brand. Dumb line extensions are even dumber in 2009.
There is nothing inherently wrong with brand extensions when the brand in question has meaningful equity and the “extension” makes sense for the category. It’s also a smart way for CPG manufacturers and other marketers to capture more shelf space while economizing on brand-building budgets. However, there are likely to be more bad ideas than good ones: This is the other side of the issue that panelists discussed a few weeks ago, about the “top ten” product introductions of 2008. Turns out most of them were–no surprise–brand extensions, and most of them weren’t very memorable or innovative. No question that part of the retail slump is due to lack of new, motivating product ideas…it’s not just all about the economy.
When we push for innovation as the holy grail of marketing, you’re going to get a lot of garbage. Consider: if innovation were easy and the businesses available for innovation were plentiful, it wouldn’t be very innovative–it would be normal progress. Perhaps these shouldn’t be called innovations, but rather, new products. Then we don’t have to debate whether today’s marketers are lame or not.
Research should have figured out what stuff was garbage before the introduction. If the companies listed in the article didn’t do their homework, shame on them.
The pressure on marketers by their companies to continually come out with new products causes many of these brand or line extensions that shouldn’t see the light of day. Truly new products require a lot of research and development that extensions do not. I can’t help but think that they might be better off to save the money wasted on these extensions so they can afford the R&D needed to bring truly innovative products to market. Hoping for that is probably as realistic as the people of Illinois getting an honest governor in my lifetime.
The products listed in this survey were mostly all done via licensing arrangements so the parent company did not produce or sell directly. However, they are still brand extensions and should be treated as such. There are some really good examples of this as evident with the Mr. Clean car wash, which is how to leverage the core brand equity into services–something P&G would not do themselves.
I agree with the value of research to build a strategy on brand extension. More licensing programs would benefit from getting consumer insights to building a viable business.
Creating new products can be subjected to a simple, three-part test.
1) Is the differentiation you bring to the category/market significant? (i.e. do consumers notice?)
2) Is it meaningful? (i.e. do they care?)
3) Is it better or worse? (i.e. do they like it?)
Brand and line extensions are much trickier. We have the base brand recognition and equity to start from–so consumers will generally report that they “notice” the product. And by definition, the hurdle for “significant differentiation” is reduced by the need to maintain the basic brand image and value proposition. So marketers can usually justify almost any result on the “significance” test.
When it comes to “meaningful”–line extensions relatively low cost and very high incremental ROI (how many times have you heard “the pipeline volume alone will generate a payback”?) also greatly reduces hurdles versus true new products.
“Is it better or worse?” is all too often left to the judgment of the marketer. I’ll bet many of us on this forum have a background in the food business. Remember the “silver tongue test”? That’s when the highest ranking tongue at the product testing overrules the consumer research and says “add more sugar anyway.” I don’t think that’s gone away.
I think brand extensions are a case of slippery slope: short term gain that can so easily lead to long term erosion of the brand. To me, brand extensions aren’t the result of a lack of innovation, but the over-abundance of short-term pressure to deliver top- and bottom-line results. When it’s all about the quarter, no one is going to sit around developing ideas that may take significant time to develop, and throwing out some iteration of an existing product takes no time at all.
RSR’s research shows that this is a cycle that has to stop–retailers and manufacturers alike complain that they have too many SKUs, too many chances for stockouts–a related story among today’s discussions–and no end in sight. An extension might boost sales this quarter, and next quarter, but at some point it becomes an albatross taking up space that a truly innovative product might have served much better.
Great care should be taken before one messes with a brand. Valuable brands add multiple after multiple to enterprise value.
Line extensions of a brand are not only an efficient way to build business, but to also build the value of a brand. Unfortunately, there seems to be a lack of understanding of what a brand means by many marketing/product managers. Not only must a line extension be viewed by how the brand can help it, but it must be viewed on how it can help the brand.
Brands are successful and carry value because in one symbol they communicate to a consumer. A brand carries a meaning that can’t really be described by a user in one word or even one sentence. Or, with any words at all. It includes a standing of a product and a description of the user. And perhaps the connection between the consumer and that brand symbol is what carries the greatest value. Often times it is forgotten that brands carry premium prices, yet they do not always carry that same premium in quality or performance.
My colleagues are correct in referencing egos in the development of silly brand extensions. A company doesn’t need high powered executives divining a brand. The consumer tells it all. If a brand extension doesn’t make sense to the brand user, it doesn’t make sense at all. Further, a great source for brand extension is the user. I have used simple research answering the simple question, “What products would you expect to see under the XXX brand?”
On the matter of innovation, great innovation and line extension don’t always go hand-in-hand. Sometimes, great innovation necessitates a new brand. This is especially true if the target user of the innovation does not match the core consumer of the current brand. Or, the current brand is so powerful in its meaning that it overshadows the innovation.
My vote for an awful line extension in 2008–Entenmanns’s Candles. YUK! Perhaps it makes sense because they are made of the same ingredients?
As a marketing professional, I can tell you that it is my job to make my clients happy. And that usually involves finding way for them to make money. And while Burger King underwear (home of the whopper?) and “green” insurance may be lame, if they sell, then marketers have done their job.
Now if only Sara Lee would come out with a line of scented body spray for women.
All businesses have smart people and not so smart people. Just because a brand is famous doesn’t mean everyone who works there is terrific. So mistakes happen. Even smart people can make mistakes, too. So some brand extensions were dumb. No dumber than a lot of advertising, consultant reports, public works projects, best selling books, and even some RetailWire comments.
Just like the “real people” behind the scenes in the marketing departments, “brands” too have big egos that often get them in trouble, or at the very least, cost more money than what the reward will be valued, at the end.
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We’re missing the point that line extensions and licensing are often about acquiring shelf space. Newest research suggests today’s customer isn’t as likely to prefer a line extension they deem to be inconsistent with their perception of the original brand. Dumb line extensions are even dumber in 2009.
There is nothing inherently wrong with brand extensions when the brand in question has meaningful equity and the “extension” makes sense for the category. It’s also a smart way for CPG manufacturers and other marketers to capture more shelf space while economizing on brand-building budgets. However, there are likely to be more bad ideas than good ones: This is the other side of the issue that panelists discussed a few weeks ago, about the “top ten” product introductions of 2008. Turns out most of them were–no surprise–brand extensions, and most of them weren’t very memorable or innovative. No question that part of the retail slump is due to lack of new, motivating product ideas…it’s not just all about the economy.
When we push for innovation as the holy grail of marketing, you’re going to get a lot of garbage. Consider: if innovation were easy and the businesses available for innovation were plentiful, it wouldn’t be very innovative–it would be normal progress. Perhaps these shouldn’t be called innovations, but rather, new products. Then we don’t have to debate whether today’s marketers are lame or not.
Research should have figured out what stuff was garbage before the introduction. If the companies listed in the article didn’t do their homework, shame on them.
The pressure on marketers by their companies to continually come out with new products causes many of these brand or line extensions that shouldn’t see the light of day. Truly new products require a lot of research and development that extensions do not. I can’t help but think that they might be better off to save the money wasted on these extensions so they can afford the R&D needed to bring truly innovative products to market. Hoping for that is probably as realistic as the people of Illinois getting an honest governor in my lifetime.
The products listed in this survey were mostly all done via licensing arrangements so the parent company did not produce or sell directly. However, they are still brand extensions and should be treated as such. There are some really good examples of this as evident with the Mr. Clean car wash, which is how to leverage the core brand equity into services–something P&G would not do themselves.
I agree with the value of research to build a strategy on brand extension. More licensing programs would benefit from getting consumer insights to building a viable business.
Creating new products can be subjected to a simple, three-part test.
1) Is the differentiation you bring to the category/market significant? (i.e. do consumers notice?)
2) Is it meaningful? (i.e. do they care?)
3) Is it better or worse? (i.e. do they like it?)
Brand and line extensions are much trickier. We have the base brand recognition and equity to start from–so consumers will generally report that they “notice” the product. And by definition, the hurdle for “significant differentiation” is reduced by the need to maintain the basic brand image and value proposition. So marketers can usually justify almost any result on the “significance” test.
When it comes to “meaningful”–line extensions relatively low cost and very high incremental ROI (how many times have you heard “the pipeline volume alone will generate a payback”?) also greatly reduces hurdles versus true new products.
“Is it better or worse?” is all too often left to the judgment of the marketer. I’ll bet many of us on this forum have a background in the food business. Remember the “silver tongue test”? That’s when the highest ranking tongue at the product testing overrules the consumer research and says “add more sugar anyway.” I don’t think that’s gone away.
I think brand extensions are a case of slippery slope: short term gain that can so easily lead to long term erosion of the brand. To me, brand extensions aren’t the result of a lack of innovation, but the over-abundance of short-term pressure to deliver top- and bottom-line results. When it’s all about the quarter, no one is going to sit around developing ideas that may take significant time to develop, and throwing out some iteration of an existing product takes no time at all.
RSR’s research shows that this is a cycle that has to stop–retailers and manufacturers alike complain that they have too many SKUs, too many chances for stockouts–a related story among today’s discussions–and no end in sight. An extension might boost sales this quarter, and next quarter, but at some point it becomes an albatross taking up space that a truly innovative product might have served much better.
Great care should be taken before one messes with a brand. Valuable brands add multiple after multiple to enterprise value.
Line extensions of a brand are not only an efficient way to build business, but to also build the value of a brand. Unfortunately, there seems to be a lack of understanding of what a brand means by many marketing/product managers. Not only must a line extension be viewed by how the brand can help it, but it must be viewed on how it can help the brand.
Brands are successful and carry value because in one symbol they communicate to a consumer. A brand carries a meaning that can’t really be described by a user in one word or even one sentence. Or, with any words at all. It includes a standing of a product and a description of the user. And perhaps the connection between the consumer and that brand symbol is what carries the greatest value. Often times it is forgotten that brands carry premium prices, yet they do not always carry that same premium in quality or performance.
My colleagues are correct in referencing egos in the development of silly brand extensions. A company doesn’t need high powered executives divining a brand. The consumer tells it all. If a brand extension doesn’t make sense to the brand user, it doesn’t make sense at all. Further, a great source for brand extension is the user. I have used simple research answering the simple question, “What products would you expect to see under the XXX brand?”
On the matter of innovation, great innovation and line extension don’t always go hand-in-hand. Sometimes, great innovation necessitates a new brand. This is especially true if the target user of the innovation does not match the core consumer of the current brand. Or, the current brand is so powerful in its meaning that it overshadows the innovation.
My vote for an awful line extension in 2008–Entenmanns’s Candles. YUK! Perhaps it makes sense because they are made of the same ingredients?
As a marketing professional, I can tell you that it is my job to make my clients happy. And that usually involves finding way for them to make money. And while Burger King underwear (home of the whopper?) and “green” insurance may be lame, if they sell, then marketers have done their job.
Now if only Sara Lee would come out with a line of scented body spray for women.
All businesses have smart people and not so smart people. Just because a brand is famous doesn’t mean everyone who works there is terrific. So mistakes happen. Even smart people can make mistakes, too. So some brand extensions were dumb. No dumber than a lot of advertising, consultant reports, public works projects, best selling books, and even some RetailWire comments.
Just like the “real people” behind the scenes in the marketing departments, “brands” too have big egos that often get them in trouble, or at the very least, cost more money than what the reward will be valued, at the end.