Growth. It seems these days that everyone is trying to find some. How can we drive growth? Can we grow the category at a faster rate by increasing usage occasions? Can we find new customers for our product? Should we acquire a competitor?
The challenge for many brands is that the categories in which they compete are not growing fast enough. In some cases, it’s not possible to grab enough market share from competitors to outpace a sluggish category for very long.
The answer for many is extending the brand. We refer to this as brand domain strategy. Thinking beyond the current category, what is the larger space in which our brand can compete?
The Crest brand did this brilliantly several years ago. Already a strong player in the $6 billion toothpaste category, which was growing at about 1%, Crest expanded into a much broader range of oral care products that included Whitening Strips, floss, mechanical toothbrushes, and co-brand opportunities with Scope. This “domain” exceeded $23 billion dollars and was growing at 6%. Growth found. Check.
However, many brands struggle with this strategy. As David Taylor writes in his book,Brand Stretch, half of all brand extensions fail. So, how can you beat those odds? Here are a few suggestions:
- Remember that it’s not about you. Taylor warns against the “brand ego trip.” Many companies fall into this trap because they’re focused on what they know how to make rather than on what customers really need. It comes down to being more customer-focused and less company-focused.
- Go deep. Don’t stop with an understanding of your customers’ functional needs. Try to understand what really drives them. What are the higher level emotional needs that consumers are trying to fulfill? For Crest, this was “a confident smile,” which was a higher order need than “fewer cavities.” A deeper understanding of consumer needs can broaden the potential domain for your brand.
- Easy does it. While irrational exuberance may be completely appropriate in your brainstorming sessions, it’s best to go slowly when deciding which opportunities your brand should pursue. Research will let you know where consumers believe the guard rails exist for your brand. If consumers don’t believe you have credibility in a particular space, your effort will likely fail. Consumers can be persuaded, but this may need to happen incrementally over time.
Finally, of course, you’ll need to perform due diligence to understand the potential size of each opportunity and to validate the concepts and value propositions. If you keep these points in mind, your brand’s extension will have a greater chance of success.
Please contact us for more information.