How you can use the stretching potential of your brand to full advantage
whilst avoiding the involved risks
In the USA more than 90 per cent of all new offers are nowadays launched under an existing brand. And some people believe that brand stretching is "a quick, low cost, low risk way"
to extend a brand into new product areas.
Experience, however, shows that is not true. Not every extension fits to the brand concept or lives up to expectations. 80 per cent of all image transfers into new product categories are flops and nearly 30 per cent of all line extensions within a market are failures.
Even worse inappropriate brand extensions can cause considerable damage to the parent brand. In the worst case scenario negative (or "bad will") re-transfer can threaten positive brand images. (eg. Beaujolais Noveau damaged the premium image of expensive Beaujolais wines beyond repair.)
Another danger is that former strong brand image profiles can be weakened via launching inappropriate partner products. A brand that tries to stand for everything winds up standing for nothing. – Crest with its anticavity proposition had achieved a dominant U.S. market share of 30 per cent by the early nineties. In an attempt to increase its market share even further Crest launched numerous specialist tooth creams (e.g. against plaque, tooth decay, with whitening power etc.). This proved to be a mistake because its undermined Crest`s former perceived ability to provide total dental health. - Colgate Total was launched in the U.S. in 1997 and became market leader with a share of 37 per cent in four years. As its name suggests, Colgate Total claimed to offer everything. – By the way, due to the same mistake the former German market leader blend-a-med lost its position to Odol med 3. Brand stretching is therefore a challenging and undoubtedly risky task.
On the other hand considerable evidence proves that appropriate brand extensions can increase brand revenue and profitability and intensify brands image profiles.
A strong brand represents the key asset of a company. Therefore managers have to know when and how they can use the brand name to full advantage and when they have to protect it.
In the last twenty years we have developed proven reliable brand stretching simulation methods. These have paved the way for outstanding brand extension and image transfer successes such as Bahlsen, Beck's Gold (Marken / Brand Award 2004), Ellen Betrix, Enzym Lefax, Krombacher, Leitz, LEKI, Nestlé, Niederegger, Nordmilch, Nivea, Pfanni, Weight Watchers and Wrigley.
For example Weight Watchers in Germany used Dr. Mayer de Groot know how and techniques to full advantage. After re-focussing its licensing program the brand prospered in Germany.
Accordingly Weight Watchers and its licensees achieved numerous prizes such as 4 x product of the year 2005, 5 x product of the year 2006 and the Brand Diversification Award 2006.
We have published several books and numerous articles using our expertise on brand stretching. Just to name a few: