Thinking about the mixed bag of brand extensions is like watching an ‘I Love the 80s’ TV show. You either fondly recall an old favourite, or look at those oddball follies and wonder how that ever seemed like a good idea.
Leveraging the trust and recognition of a brand to enter new markets, attract new audiences and cater to different needs has become a tried-and-tested part of brand management. It tends to be in the fmcg category – where the need to claw out more shelf space is most furiously fought out – that brands are most active in testing the limits of how far they can ‘stretch’.
Almost 70% of new products in the US fmcg market are brand extensions, and the percentage is similarly high in the UK. The logic seems sound; introducing a new product under an existing brand can reduce introduction costs, lower the risk of failure, and increase profit.
However, only 30% of brand extensions in the fmcg market survive the first two years – a success rate similar to new brands.
So, it’s understandable that brand managers are sometimes hesitant to extend. Stretch too much, and the laws of physics mean it’s liable to ping back in your face.
Colgate is one of those cautionary tales. It took a swing by attempting to enter the frozen food market with Colgate Kitchen Entrées, which were soon discontinued.
Frito-Lay’s crack at launching a lemonade met a similar fate.
It’s easy to poke fun, but for every dud there are brands who’ve reaped the rewards.
Heinz’s ‘Beanz Liberation’ and Baileys celebration cakes are standouts, because they weren’t just line extensions but a foray into entirely new categories. Keeping things closer, Coca-Cola has continued to find growth by introducing new flavours under the same brand.
Walkers crisps have always impressed. Operationally, developing and launching new flavours is relatively straightforward for a crisps brand. But Walkers has been prepared to go beyond the norm. One example was its launch of Cajun Squirrel flavour.
It was fun, attention-grabbing, tasted OK-ish… and consumers bought into its spirit. Granted, not in enough numbers to make it worthwhile keeping it around, but that wasn’t the point.
Who knows – sales of Cajun Squirrel might have caught fire? But the aim of this line extension was to grab headlines, rather than sales. It was a highly effective marketing reminder to buy other Walkers products.
Brands like this should be applauded for understanding their audience, and for their nerve. They are not crippled by the prospect of failure on-shelf, but more concerned with the regrets that come through a failure of imagination.
Tom White is the chief strategy officer at Modern Citizens
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