For 15 years IMC has been helping the owners of global iconic brands find ways to grow through new products and partners. And every company we’ve worked with has expressed the fear that any new licensed product or brand extension might hurt the value of its brand equity, its most precious asset.
While brand managers can be over-protective, I’ve typically agreed with them about their underlying fear that extending their brand into new categories might confuse (or even turn off) their existing customer base.
But now I’m not so sure.
As I look around, the brands that continue growing and winning in today’s marketplace are generally the ones that explore new categories with passion, not caution. Consumers are rewarding (not punishing) brands that expand their relevance and personalities into new products and channels, and retailers are giving greater attention to the companies and brands that play well with others.
A while back I wrote a blog about what an omni-channel world means for licensors; your brand may face bigger risks from failing to reach all channels than by getting that move wrong. Your brand may also face bigger risks from failing to tackle new categories than by resisting them just because they may not work out.
A few mega-brand examples illustrate this point:
We worked with the Jack Daniel’s brand for many years, a global icon whose equities were so narrowly defined at the time that it was difficult for brand managers to approve new product categories for fear that it would diminish the brand’s value.
While defining itself as a brand that resists change, Jack Daniel’s itself has spent the last twenty years introducing its own successful line extensions: Gentleman Jack offered a premium positioning before the super-premium whiskey category even existed, and in the last couple of years Jack Daniel’s Tennessee Honey, which reaches younger consumers, and especially women (and which older brand stewards would have rejected out of hand) has become the company’s fastest-growing new business.
Outside of whiskey, the brand has partnered with everyone from Heinz (for barbecue sauce and marinades), Peavey (for guitars and musical equipment), and even ready-to-eat meats. Not all partnerships succeeded, and not all categories worked out. But the brand has exceeded growth projections nonetheless. There is no reasonable argument that any product-line failures – and none of the many smaller deals that never generated scale – have held back the brand’s growth, even when they were committed by the brand itself: does anyone remember Jack Daniel’s beer?
Newer brands are created to break down existing boundaries, and sometimes start-ups can become successful omni-product offerings faster than their competitors because they think more broadly from the beginning.
Method is one of them, thanks in part to defining itself as a set of brand equities (including methodology and packaging) rather than as one exclusive category.
If your brand spent its first 100 years as dishwasher fluid it can be harder to consider becoming a soap; and a brand that spent its first 100 years as a face soap would likely perceive great risk from extending into floor cleaning.
But not Method, which broke down the walls between floor and face faster than any brand I can think of. Consumer celebrated the brand’s category-busting efforts because they understood its equities (“Clean Happy”).
Method’s very newness seems to have helped it avoid the navel-gazing that keeps most brand managers from thinking about their brands has broadly as consumers are willing to do. Brands that remain proud of defending boundaries risk making themselves irrelevant in the eyes of consumers and retailers today.
Arm & Hammer
If Arm & Hammer had conceived of itself as a one-category brand, its consumer base today would be limited to bakers and the occasional back-to-nature tooth brusher. But Arm & Hammer recognized its category-busting potential almost 20 years ago, and consumers love it more than ever.
How could one brand deliver value in categories as different as kitty litter, air filters, laundry soap, toothpaste and diaper pails? By trusting its consumers while its competitors were busy defending their own narrow turf. As a result, this once-small business has earned itself a giant consumer franchise that appears to have almost no limit. A brand built slowly on odor-removing equities is now even extending itself into “positive fragrancing” with a scented air spray that gives it an entirely new meaning. This wouldn’t have been possible if it hadn’t started looking at new categories more for their potential than their risk.
Omni-Product Brands may be the Only Winning Brands
15 years ago, when we asked the biggest brands about new product categories, they usually asked, “What if it doesn’t work out? We can’t afford that risk.”
But brand extensions often fail, and strong brands rebound. Brand managers would do well to remember that fact, and to follow successful companies into the brave new omni-channel, omni-product world where their brands actually live.