New brands should be a last resort

Jennifer Rice's post regarding comments made by Laura Ries on Weber's brand stretching created a veritable firestorm of debate. Laura's not a big fan of extension, and suggested that Weber should have created a new brand when going from charcoal barbeques to gas grills. Jennifer countered that Weber were right to extend into gas grills to avoid "extinction". Jennifer is right in my book. The massive cost of creating and maintaining new brands means they should be a last resort, not the first port of call as is the case in the Ries school of thinking. 

A simple way of checking if a new brand is needed is to  consider the degree of stretch from the current brand perception on 2 axes (see the image below from Brand Stretch). The first dimension is "functional stretch": how credible is it for consumers that the brand can offer this product?. The second dimension is emotional stretch, the difference in terms of personality of the new extension. Things that can drive a big stretch here include target audience (e.g. much younger) and value position (e.g. much more premium). Surely the stretch on both these dimensions for the Weber example is limited?

In cases like this when the stretch is small, then an "ownable descriptor" is the best bet. An example of this is Bacardi Limon flavoured rum. Only if the stretch on both dimensions is big should a sub-brand be used, as Bacardi did with Breezer for their ready-to-drink offering (more of the risks of this later...). A new brand should be considered only when brand stretch is so big that the elastic snaps.

And remember, as long as you have a great "sausage" (i.e. product), consumers are willing to accept a lot more stretch than many brand owners. And as long as the extension is building a big brand idea, the risk of brand dilution is limited.

5 minute Workout: if you're working on a brand extension, ask how big the stretch is on the funtional and emotional  axes. Based on the result, are you using the optiumum branding approach?

Comments

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[David Taylor (from WheresTheSausage)]

The "cost of brand creation" issue mentioned by Laura seems to be a key issue here. From my experience with companies, the cost is HUGE if you want to be big. This is especially true in the consumer goods arena, where retailers will list you but then kick you out if you don't deliver. Hence if you can leverage an existing, known and trusted brand this is a big advantage. So, with Bertolli Unilever have been able to build a $100million business in Italian frozen entrees in 12-18 months. With a new brand this would have been next to impossible to pull off.

[Laura]

Hey, it's Laura Ries here. Let me put my two cents in.

Bacardi Limon: Ok to extend. We don't say never, ever line extension. But understand the risks, keep brand as focused as possible, watch competition and still look for new brand opportunities.

Launching new brands should not be that expensive. Since new brands should be launched with PR, not massive advertising.

Bacardi Vodka: a definate no-no. Think it sounds crazy, Tanqueray tried it. Obviously it failed.

Bacardi Breezer: I think this needs a new name. Can come from the Bacardi company. But Breezer is too generic for a brand name. It also is lacking a strong category name. What is it? Zima had similar problems along these lines. I don't think this product category will do well in the long run, that's is my prediction. This generation's wine cooler.

Bacardi Juice: I agree forget about it. No Mom will give her kid that.

Best wishes,
Laura