Each day countless new products and services are launched, the majority of which fail. Look at a single brand in isolation and you will find the good (Virgin Atlantic), the bad (Virgin Brides) and the ugly (Virgin Cola) of brand extensions. Countless articles have been written about the best and worst examples so we thought we’d focus on brands that do more than extend, they disrupt, creating new categories in the process.
Brands require careful management. Stretch them too far and they can snap. But get it right and the rewards can be huge. Create a lucrative new category and you own it. By the time others have entered the race you’re already round the first bend.
Market leaders are often best placed to create new behaviors. The classic example is the Clinique three-step system. The line was created when Estée Lauder, the cosmetics mogul, read an article written by dermatologist, Dr. Orentreich, which stated that clean skin was the root of healthy skin. From this simple principle stemmed a revolutionary range of scent-free cosmetics that turned the simple act of washing your face into a skin care regime.
Today brands no longer need a dermatologist’s endorsement, they have become trusted ‘professionals’ in their own right. Consumers will allow new product launches to guide their behavior, particularly when a well-known brand enters a new field. The big brands have an advantage because both the retailer and consumer are more likely to trial a familiar name, even if it’s in an unfamiliar field, as long as the transition makes sense.
The potential for failure is huge which is why many companies invest millions at the front end to create, research and craft a product that’s truly compelling. There are a number of brands that have achieved it and rolled out brand extensions that broke the mould, to create a new experience that most consumers hadn’t even realized they were missing out on.
Old brand, new audience
The classic example is of course the Wii. Rather than incremental innovation, Nintendo put their core consumers to one side and gambled ‘the house’ on a ground-breaking product that brought the video game out of the teenage boy’s bedroom and into the lounge. Crucially they didn’t stop there, they kept innovating. The recently released Wii U fuses the popularity of the tablet computer with the interactivity of the original Wii to create a family-friendly device that fills niches the Xbox Kinect cannot.
Tapping into a trend, creating a movement
L’Oreal is an outstanding example of a brand that noticed small changes in consumer’s behavior and used it to carve out a whole new category. Scores of brands had dipped their toes into the men’s skin care arena but L’Oreal put the full weight of their organization into creating a comprehensive men’s skin care range. Like what Clinique did for women in the 60’s L’Oreal did for men in the 90’s, creating new habits and gradually extending consumer’s consumption into new areas. L’Oreal has since replicated this feat in China, experiencing 40% growth in the men’s skin care market in 2010. Making value essential
Waitrose also achieved a double whammy when they launched their Essentials range. Of course it was a response to inevitable changes in consumer behavior after the downturn, but it defied the traditional ‘value’ range model that The Big Four had had for years. Waitrose showed that value doesn’t have to mean trading down, it could mean ‘staple’. Accordingly their traditional clientele could afford to maintain their consumption levels, and new consumers could now ‘trade up’ and buy into the Waitrose ethos. Off the back of this success Waitrose has gained confidence to launch their ‘LOVE life’ range, which makes it easier for consumer to select the healthiest options.
Watch a newspaper
Apple has used the emotional pull of its brand rather than functionality to drive consumption. Initially consumers weren’t sure they really needed an iPhone and iPad. The former didn’t seem to be particularly good at being a phone and the latter seemed to be an emasculated laptop. But the social cache of the brand created a snowball effect, changing the way we interact with the world around us, igniting the push towards mobile technology and redefining entertainment, as the latest iPad 2 ad demonstrates.
The key to the success of these disruptive brand extensions was two fold. Firstly the brand owners were listening carefully yet broadly, spotting new opportunities outside of their daily focus. Secondly, once they spotted an opportunity, they didn’t enter the fray half-heartedly but put considerable effort into designing and promoting a product that would meet these needs. It’s vital that brands don’t falter at the finish line, especially when they’re trying to convince consumers of a product choice and experience they’re unfamiliar with. It’s a difficult task, but if carefully crafted it can be hugely rewarding.