PROPRIETARY AND CONFIDENTIAL Successful Brand Extension December 16, 2014.

PROPRIETARY AND CONFIDENTIAL

Successful Brand Extension

December 16, 2014


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Brand Extendibility ‘Hall of Shame’

Burger King Boxers

Harley Davidson Perfume

Hooters Air

Dr. Pepper Marinade Chicken Soup for Dog Lovers

Arizona Tea Nachos ‘n Cheese Dip


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Polling Question #1

Which of the following is THE worst example of brand extension?

a) Burger King Boxers

b) Dr. Pepper Marinade

c) Chicken Soup for Dog Lovers

d) Arizona Tea Nachos ‘n Cheese Dip

e) Hooters Air

f) Harley Davidson Perfume


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Brand Extendibility Defined

Existing Brands

Brand Extendibility

Base Business

New Products

New Brands

Sources of Organic Growth


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The Benefits of Brand-driven Growth

Pro

du

cts

& S

ervi

ces

Brands

Exi

stin

gN

ew

Existing New

Market Penetration

Brand Extendibility

Portfolio Extendibility

New Product Development

Higher Risk

Typically Less

Impactful


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Just the Facts…

Brand Extension Failure Rate* Brand Extension 3-year Survival Rate**

0

20

40

60

80

100

Brand Extendibility Track Record

*Ernst & Young, 2013; **David Talyor, Brand Stretch (2004)

84

54


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Top Barriers to Successful Brand Extendibility

No Meaningful Market Need

Demand

There is a Need, but the Solution is

Uninspiring

Supply

There is a Need and an Inspiring Solution, but the

Brand is Wrong

Brand Relevance


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Polling Question #2

What is the most challenging aspect of extending brands for your company?

a) Identifying customer unmet needs/white spaces (demand)

b) Developing creative/inspiring solutions (supply)

c) Determining appropriate fit with brand (brand relevance)


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Reason #1: No Meaningful Market Need (Demand)

Track plant growth and watch an entire growing

cycle in seconds!

PlantCamTM

Example

• Addressing the need is not profitable

Underlying Components:

• No need; difficult to create need

• Satisfactory solutions already exist

• The unmet need is too niche

Demand SupplyBrand

Relevance


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Think Broad

Personal Values

Relaxation/Recharging

Role of Friends & Family in Life

Movies onDVD/Blu-ray

Role of Entertainment in Life

Home Entertainment

Dimensions for Understanding Consumers

Attitudes Toward Free Time

Broad

Specific


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The Latency Effect

“If I had asked customers what they wanted, they would have told me a faster horse.”−Henry Ford

• Customers are often unaware they even have a particular need (latent)

• Customers may be aware of a need, but have trouble articulating it (tacit)

• Some of the most successful new products and brand extensions in history were not inspired by an articulated need

None of these products addressed a widely recognized

problem that any of us had


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The Importance of Precision

“If you don’t know where you’re going, any road will take you there.”−Lewis Carroll

• Big problems and challenges are often comprised of smaller component challenges—each of which has different ideal solutions

• Performance—Is it about productivity? Accuracy? Throughput? Speed?

• Convenience—Is it about speed? Ease? Simplicity? Portability?

How can a 9-hour solution solve the problem of dinner preparation taking too long?


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Beyond Problems… Opportunities

“Effective innovators don’t wait for problems to arise. They fix what isn’t broken and improve things with no apparent deficit.”−Dennis Stauffer, Thinking Clockwise

• Uncovering opportunities that are not inherently problem-solving in nature requires a different approach

• It’s less about asking customers what they think/want…

• It’s more about observing what customers actually do— “and connecting the dots”

Consumers weren’t exactly sitting around thinking to themselves, “Gee, if only I had

a tablet…”


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Reason #2: Uninspiring Product or Service Solution (Supply)

Smokeless Cigarettes…

“produced a flavor and a smell so offensive that it

left users retching…”

Example

• “Flavor of the Day” offering


• Solution not aligned with need

• Lack of imagination/creativity

• “Side effects” or other drawbacks

Demand SupplyBrand

Relevance


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Sources of Inspiration

Core Competencies

Cross-BU Collaboration

R&D and Contracted

Partnerships

Supplier Collaboration

Company

R&D

Vendors

Universities

JVs/Alliances

Analogies & Metaphors Product / Technology

Business Model Levers

Best Practices

Case Studies

Delivery Channels

Service Models

BusinessModel

Functional Attributes

Emotional Benefits

Core Values

Personality

Brand Levers

BrandCustomer Insights

Global Trends

Need Platforms

Digital Ideation

Customer ParticipationCustomer


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Defining Your Frame of Reference

WorkoutT-shirts

SportingGoods

AthleticApparel

Lifestyle & Fitness

Health & Wellness

Pedometers

Running Shoes

Jerseys

Shorts

SocksSweatshirts

Footballs

Golf Clubs

Hockey Skates

Basketballs

Tennis Balls

Soccer Nets

Knee Bands

Trail Maps

Hiking Gear

Mountain Climbing

Camping GearPrepared

Meals

Physician Network

Wellness Website

Nutrition Plans

Fitness Bands

Heart Monitors


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The Power of Convergence


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Cross-Pollinating the Unlikely

Mash-ups

+Using the same design as a weed whacker with

a motor on one end and an impeller at the other,

a miniature computer-controlled heart pump has

been designed to help patients waiting

on the transplant list.

How Would X Approach Y?

+If Google were in the business of manufacturing

nuts and bolts, how would they go about it? In

what ways would their nuts and bolts be different

from others on the market today? Why would

they be different and better?


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Reason #3: Lack of Brand Relevance

EBay selling goods at fixed prices made no sense for the brand or to consumers…

EBay Express was a confusing and contradictory concept

Example

• Base brand “baggage”


• Lack of credibility

• Inconsistent persona

• Contradictory price/value relationship

Demand SupplyBrand

Relevance


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Brand Extendibility Footprint

Brand Footprint

Dimension 1

Dimension 3

Dimension 2

Dimension 4

Dimension 5

Dimension 6

Dimension 7

Dimension 8


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Illustrative Dimensions/Axes

CategoriesSpices Seasonings Appetizers Main EntreesSide Dishes

SegmentsToddlers Young Kids Tweens Young AdultsTeens

Price PointsEntry Value Mid-Price LuxuryHigh-End

Occasions

Breakfast Snack Mini-Meal DinnerLunch

EmotionsMeditative Calming Relaxing StimulatingEnergizing


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Polling Question #3

What is the most ‘dimension’ your company considers when extending brands?

a) Product category

b) Customer segment

c) Usage occasion

d) Functional benefit

e) Something else


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Example—Extending Along Categories

Categories

Desktop Software

TODAY

Cloud Solutions

Subscriptions/ Licenses

Not doing today, but there is high customer

permission…seen primarily as new platforms

Value-added Reseller

Credible “stretch;” but would likely

require some

convincing

Consultative Services

Off-brand; Not able to span from a

‘mass’ to ‘custom’

Company:Financial Planning

Software Developer


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Example—Extending Along Occasions

Everyday/ Routine

TODAY

Crunched for Time

Portable/On-the-Go

Lack of drive-thru window makes these occasions a bit more challenging, but

still have ‘permission’

Seek Different Experience

Basic food fare makes this a big

stretch; would need to

significantly alter

cuisine/menu offering

Special Occasion

Off-brand; Highly

functional nature of brand is a disconnect

Occasions

Company:‘Fast Casual’

Restaurant Chain


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Example—Extending Across Different Dimensions

Product Attributes

Emotional Benefits

Functional Benefits

• Sets ambiance• Eliminates odor• Releases scent• Illuminates• Cleans

• Trustworthy• Welcoming• Homey• Family-oriented• Soothing

• Diffuser• Candles• Plug-ins • Sprays


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The Power of the Intangibles

“At Caterpillar, we build the machines that help our customers build a better world. The boots and shoes we build are made with the same commitment.”

“Excellence is a continual quest at the Tata group and Tata companies are supported in their efforts to achieve world-class standards in all aspects of operations...”


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Parting Thought…

The hard part is letting go of what worked for you two years ago, but will soon be out of dateRoger Von Oech


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1603 Orrington Ave. Suite 600

Evanston, IL 60201

T 312.239.8985

[email protected]

www.fullsurge.com

@MitchDuckler

http://www.fullsurge.com/

PROPRIETARY AND CONFIDENTIAL Successful Brand Extension December 16, 2014.

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Transcript of PROPRIETARY AND CONFIDENTIAL Successful Brand Extension December 16, 2014.