I love this cartoon from marketoonist Tom Fishburne. It illustrates the risks of trying to turn a product brand into a "masterbrand" that serves as an umbrella for a range of different products. He refers to our term "brand ego tripping" to explain what can go wrong with this approach.
Tom sums up the theory behind multi-category "umbrella" brands, quoting from Prophet:
- The assurance of a familiar brand provides comfort and inspiration
- Consumers are seemingly more comfortable letting brands extend into new categories than most brand managers are
- Investing in a master brand is typically more efficient than allocating limited budgets across a stable of brands.
Unfortunately, this theory is fatally flawed. In particular, take the second point. There's a bloody good reason that consumers are "more comfortable about letting brands extend into new categories". They don't have to worry about little details like manufacturing capability, supply chains and retailer negotiations.
Indeed, the key reason 50%+ of brand extension efforts fail is not to do with branding at all, as explored in detail in our book Brand Stretch: Why 1 in 2 Extensions Fail and How to Beat the Odds. The problem is more to do with the company's "ability to win" in the new market they are stretching into. This is to do with business models, not just branding. And its an area where marketers tend to be less competent.
Using Prophet's theory above, Heinz stretching from canned soup into chilled soup made sense, and the "Farmer's Market" concept was OK. However, Heinz came up against serious issues regarding the business model: It meant new manufacturing, new product development and a new sales team to sell to the chilled department of retailers. Plus, Heinz was up against a dominant brand leader in Covent Garden, and own label, as I posted here.
The same goes for Red Bull trying to compete in cola. From a brand stand-point, why not? Consumers probably said, "Great! Bring it on." However, Red Bull faced the business challenge of having to compete for attention and shelf space vs. the might of Coca Cola and Pepsi, and has struggled.
To stretch a brand from one category to another you need not just a good concept, but also a good business model. Dove's stretch from cleansing bars into deodorant was helped by Unilever being a world leader in deo technology and supply chains. Also, they had commitment and stamina to make this launch work, as they wanted to grow the deo category as a whole.
So, next time you are discussing brand extension, don't ask "Can our brand stretch into category x or y?" Instead, ask "Can we make any money by stretching into category x or y?" Think business model, not just brand theory.