Post on 13-Dec-2015
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Brand Extendibility ‘Hall of Shame’
Burger King Boxers
Harley Davidson Perfume
Hooters Air
Dr. Pepper Marinade Chicken Soup for Dog Lovers
Arizona Tea Nachos ‘n Cheese Dip
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Polling Question #1
Which of the following is THE worst example of brand extension?
a) Burger King Boxers
b) Dr. Pepper Marinade
c) Chicken Soup for Dog Lovers
d) Arizona Tea Nachos ‘n Cheese Dip
e) Hooters Air
f) Harley Davidson Perfume
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Brand Extendibility Defined
Existing Brands
Brand Extendibility
Base Business
New Products
New Brands
Sources of Organic Growth
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The Benefits of Brand-driven Growth
Pro
du
cts
& S
ervi
ces
Brands
Exi
stin
gN
ew
Existing New
Market Penetration
Brand Extendibility
Portfolio Extendibility
New Product Development
Higher Risk
Typically Less
Impactful
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Just the Facts…
Brand Extension Failure Rate* Brand Extension 3-year Survival Rate**
0
20
40
60
80
100
Brand Extendibility Track Record
*Ernst & Young, 2013; **David Talyor, Brand Stretch (2004)
84
54
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Top Barriers to Successful Brand Extendibility
No Meaningful Market Need
Demand
There is a Need, but the Solution is
Uninspiring
Supply
There is a Need and an Inspiring Solution, but the
Brand is Wrong
Brand Relevance
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Polling Question #2
What is the most challenging aspect of extending brands for your company?
a) Identifying customer unmet needs/white spaces (demand)
b) Developing creative/inspiring solutions (supply)
c) Determining appropriate fit with brand (brand relevance)
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Reason #1: No Meaningful Market Need (Demand)
Track plant growth and watch an entire growing
cycle in seconds!
PlantCamTM
Example
• Addressing the need is not profitable
Underlying Components:
• No need; difficult to create need
• Satisfactory solutions already exist
• The unmet need is too niche
Demand SupplyBrand
Relevance
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Think Broad
Personal Values
Relaxation/Recharging
Role of Friends & Family in Life
Movies onDVD/Blu-ray
Role of Entertainment in Life
Home Entertainment
Dimensions for Understanding Consumers
Attitudes Toward Free Time
Broad
Specific
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The Latency Effect
“If I had asked customers what they wanted, they would have told me a faster horse.”−Henry Ford
• Customers are often unaware they even have a particular need (latent)
• Customers may be aware of a need, but have trouble articulating it (tacit)
• Some of the most successful new products and brand extensions in history were not inspired by an articulated need
None of these products addressed a widely recognized
problem that any of us had
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The Importance of Precision
“If you don’t know where you’re going, any road will take you there.”−Lewis Carroll
• Big problems and challenges are often comprised of smaller component challenges—each of which has different ideal solutions
• Performance—Is it about productivity? Accuracy? Throughput? Speed?
• Convenience—Is it about speed? Ease? Simplicity? Portability?
How can a 9-hour solution solve the problem of dinner preparation taking too long?
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Beyond Problems… Opportunities
“Effective innovators don’t wait for problems to arise. They fix what isn’t broken and improve things with no apparent deficit.”−Dennis Stauffer, Thinking Clockwise
• Uncovering opportunities that are not inherently problem-solving in nature requires a different approach
• It’s less about asking customers what they think/want…
• It’s more about observing what customers actually do— “and connecting the dots”
Consumers weren’t exactly sitting around thinking to themselves, “Gee, if only I had
a tablet…”
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Reason #2: Uninspiring Product or Service Solution (Supply)
Smokeless Cigarettes…
“produced a flavor and a smell so offensive that it
left users retching…”
Example
• “Flavor of the Day” offering
Underlying Components:
• Solution not aligned with need
• Lack of imagination/creativity
• “Side effects” or other drawbacks
Demand SupplyBrand
Relevance
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Sources of Inspiration
Core Competencies
Cross-BU Collaboration
R&D and Contracted
Partnerships
Supplier Collaboration
Company
R&D
Vendors
Universities
JVs/Alliances
Analogies & Metaphors Product / Technology
Business Model Levers
Best Practices
Case Studies
Delivery Channels
Service Models
BusinessModel
Functional Attributes
Emotional Benefits
Core Values
Personality
Brand Levers
BrandCustomer Insights
Global Trends
Need Platforms
Digital Ideation
Customer ParticipationCustomer
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Defining Your Frame of Reference
WorkoutT-shirts
SportingGoods
AthleticApparel
Lifestyle & Fitness
Health & Wellness
Pedometers
Running Shoes
Jerseys
Shorts
SocksSweatshirts
Footballs
Golf Clubs
Hockey Skates
Basketballs
Tennis Balls
Soccer Nets
Knee Bands
Trail Maps
Hiking Gear
Mountain Climbing
Camping GearPrepared
Meals
Physician Network
Wellness Website
Nutrition Plans
Fitness Bands
Heart Monitors
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Cross-Pollinating the Unlikely
Mash-ups
+Using the same design as a weed whacker with
a motor on one end and an impeller at the other,
a miniature computer-controlled heart pump has
been designed to help patients waiting
on the transplant list.
How Would X Approach Y?
+If Google were in the business of manufacturing
nuts and bolts, how would they go about it? In
what ways would their nuts and bolts be different
from others on the market today? Why would
they be different and better?
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Reason #3: Lack of Brand Relevance
EBay selling goods at fixed prices made no sense for the brand or to consumers…
EBay Express was a confusing and contradictory concept
Example
• Base brand “baggage”
Underlying Components:
• Lack of credibility
• Inconsistent persona
• Contradictory price/value relationship
Demand SupplyBrand
Relevance
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Brand Extendibility Footprint
Brand Footprint
Dimension 1
Dimension 3
Dimension 2
Dimension 4
Dimension 5
Dimension 6
Dimension 7
Dimension 8
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Illustrative Dimensions/Axes
CategoriesSpices Seasonings Appetizers Main EntreesSide Dishes
SegmentsToddlers Young Kids Tweens Young AdultsTeens
Price PointsEntry Value Mid-Price LuxuryHigh-End
Occasions
Breakfast Snack Mini-Meal DinnerLunch
EmotionsMeditative Calming Relaxing StimulatingEnergizing
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Polling Question #3
What is the most ‘dimension’ your company considers when extending brands?
a) Product category
b) Customer segment
c) Usage occasion
d) Functional benefit
e) Something else
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Example—Extending Along Categories
Categories
Desktop Software
TODAY
Cloud Solutions
Subscriptions/ Licenses
Not doing today, but there is high customer
permission…seen primarily as new platforms
Value-added Reseller
Credible “stretch;” but would likely
require some
convincing
Consultative Services
Off-brand; Not able to span from a
‘mass’ to ‘custom’
Company:Financial Planning
Software Developer
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Example—Extending Along Occasions
Everyday/ Routine
TODAY
Crunched for Time
Portable/On-the-Go
Lack of drive-thru window makes these occasions a bit more challenging, but
still have ‘permission’
Seek Different Experience
Basic food fare makes this a big
stretch; would need to
significantly alter
cuisine/menu offering
Special Occasion
Off-brand; Highly
functional nature of brand is a disconnect
Occasions
Company:‘Fast Casual’
Restaurant Chain
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Example—Extending Across Different Dimensions
Product Attributes
Emotional Benefits
Functional Benefits
• Sets ambiance• Eliminates odor• Releases scent• Illuminates• Cleans
• Trustworthy• Welcoming• Homey• Family-oriented• Soothing
• Diffuser• Candles• Plug-ins • Sprays
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The Power of the Intangibles
“At Caterpillar, we build the machines that help our customers build a better world. The boots and shoes we build are made with the same commitment.”
“Excellence is a continual quest at the Tata group and Tata companies are supported in their efforts to achieve world-class standards in all aspects of operations...”
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Parting Thought…
The hard part is letting go of what worked for you two years ago, but will soon be out of dateRoger Von Oech
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@MitchDuckler