Branding, Positioning and DifferentiationBy: Scott White
Why don't identical twins don't have identical first names? Though they may look the same, they're not. Just ask their parents. Even as newborns, they could tell them apart, and as they grow up, they're distinctions become ever more pronounced. This is why we don't give twin babies the same first names.
In the business world, this idea would seem to carry over as the foundation for a common sensical approach to branding-that different products need to be different brands with different names. However, the only thing common about this sense is that it's all too commonly ignored in the hopes of cheating risk and the possibility of failure.
Overextended brands are like overstretched rubber bands
Everyone's heard of a company called Kraft. "Hey, those are the cheese people." Yep. For years, Kraft and cheese were synonymous. It was a Corporate Branding with a position competitors would have been hard-pressed to erode had company brass been content in their cheesiness. They weren't. Like many companies blessed with strong brands, Kraft began to think their brand name was invincible and that any product introduced under its banner would dominate their markets simply because of its name. So, Kraft began offering jams, jellies and mayonnaise among other things.
The numerical truth about Kraft's brand extension strategy
Ohio-based Smucker's owns 35% of the jams and jellies market. Kraft has 9%. Hellman's mayonnaise has 42% of the mayo market. Kraft has 18%. The plan for equal domination didn't quite work out as planned. Despite its dominance in the cheese market, Kraft was relegated to bit player status in these other categories. Their strategy of trying to leverage a great brand name into being all things to all people resulted in few real winning products.
Why doesn't being all things to all people work?
In your family, you may have been the smart one. If you had brothers and sisters, there may have been the "social" one, the "rebellious" one or the "athletic" one, too. And invariably, those attributes seem to stick with a person throughout their life, often regardless of whether they change.
In Japan, Honda is known as a motorcycle company that dabbles in cars. In America, it's a car company that dabbles in motorcycles. Despite the fact the company is equally prolific makers of both, the two different markets have Honda pegged as either/or. One name, one product. Burned-in and branded for life. This is because motorcycles and motor vehicles are two different product categories. It proves that conquering multiple different categories with one brand name doesn't work. Rather, companies who wish to expand into other product areas, or a first product area for that matter, need to do so by using a strong brand identity as the foundation of its marketing strategy. Either that or create new product lines that somehow relate to your old product line, such as cheese companies putting out a line of pre-made cheese and cracker snacks. What Ritz did with Mini Ritz sandwiches, Kraft could have easily done by focusing the product's marketing slant on the cheese in the cracker.
So what do you do with a brand once you have created one?
Those responsible for the brand defend the integrity of the brand and build on it. Just as Barbie dolls have for decades while Ninja Turtles and Cabbage Patch Dolls came and went. The Barbie brand recognizes the niche it fills in the toy industry-dolls with interchangeable clothes. Nothing else. Of course, refreshing a brand is completely necessary over its lifecycle. Barbie has a way of doing this built-in to its product-changing clothing styles. As the times change, so do Barbie & Ken's wardrobe. But that's just one way a brand remains strong through the years. Survey any industry, and you'll find that long-term successful brands have at some point had to reinvent themselves along the way-like automobile companies of today in the beginning stages of moving to alternative sources for energy. This is the same thing that successful magazines do. They carve out a niche, become the leader in it and then defend it by banking on their uniqueness and further differentiating themselves from the competition-not duplicating it.
If this is the case, why do companies try to extend a brand?
Because launching a completely new brand is very risky and expensive. Often times, initial results of brand extension are positive, but the initiative commonly begins to lose ground and takes some of the overall brand strength with it.
Why creating a new brand is better for business than extending one.
In New Zealand, there is one Airline Company, but two airline brands. Air New Zealand is about top-class service with all the frills. Freedom Air, on the other hand, is the airline for the budget conscious. The two brands operate successfully and independently of each other, which allows the parent company to serve two distinctly different air travel markets.
Less really is best
A niche brand may not offer the sheer number potential of a more generalized brand, but it does offer something a lot better-sustainability. Over the long term, as your brand becomes synonymous with a specific kind of product or service, more people will turn to you for that product or service...and continue to do so because they believe they're getting quality only a specialist can provide.
A jack-of-all-trades really is master of none. So if you are a master, or wish to become one, do it. Be it. Just not to everyone.
© Copyright 2007, Scott White