The Origin of Brands Blog

The Good, the Bad and the Smelly

The past two days I have been up early to appear on Fox Business' "Money for Breakfast" to count down my top 5 line extension winners and losers of 2007 or "The Good, the Bad and the Smelly" as I refer to them. I'll start today with the losers and follow-up later this week with the winners.

What is a line extension?

A line extension is taking a brand name in one category and using the same brand name in another category. Scott used to be just a toilet paper. The number-one brand in fact. Today Scott is into everything:

• Scott toilet tissue
• Scott napkins: Scotkins
• Scott paper towels: ScotTowels
• Scott facial tissue: Scotties

Line extension killed the brand. No longer is Scott the number-one brand of toilet tissue. Today Charmin is the number-one brand. While well-known, Scott is a meaningless brand in the mind because its name is on everything.

Put Scott on a shopping list and what do you buy? I put Coke on the list; I buy Coca-Cola. I put Charmin on the list; I buy toilet tissue. I put Scott on the list and what do I buy and where do I use it?

Are different flavors a line extension?

Line extensions are sometime confused with flavors and varieties. Vanilla Coke is a flavor and Diet Coke is a line extension. There are lots of varieties of Tostitos chips. But Tostitos salsa is a line-extension.

Why do companies line-extended in the first place?

It’s the cheapest way to introduce a new product. You don’t have to spend millions of dollars on advertising establishing your brand’s credibility because everybody already knows your brand name. That’s why 90% of new supermarket brands are line extensions.

Unfortunately most new brands fail. It is especially confusing when you have the same brand name in two different categories. And long term, line extension it can damage the core brand by undermining its meaning in the mind.

But if they didn’t line extend how would companies ever grow?

Instead of always thinking how to line extend, companies should think more about launching second brands. Many line extensions represent a missed opportunity. Toyota could have sold many expensive Toyotas, but they would have missed an opportunity to launch the Lexus brand which today dominates the expensive car category. Lexus is much more valuable than the sales that might have been generated by an expensive Toyota model.

The 5 Worst Line Extensions of 2007

1. Play-Doh Cologne.

Hasbro says the fragrance is "meant for highly-creative people, who seek a whimsical scent reminiscent of their childhood."

Play-Doh does have a unique and different smell, but I doubt too many adults want to smell like Play-Doh. Kids play with the stuff despite the bad smell, not because of it.

What is next Eau de Huggies?

2. Hooters energy drink.

Hooters is known for boobs and chicken. The brand has no credibility in energy.

Just because everybody is doing it is not a good excuse to launch a line extension. Today there are hundreds of energy drinks. In order to succeed, you need be first in the mind and have a good name. Hooters has neither.

3. Jeff Gordon fine wine.

Don’t the wine makers attend any NASCAR races? I have been to several since moving down to Atlanta. And while I have seen a lot of beer consumed, I have never seen a glass of fine wine consumed. Wine and NASCAR go together like water and motor oil.

4. Disney wedding gowns.

As a wedding destination Disney has had some success. Disney World is a great place to visit, and many weddings are part family reunion these days so in some ways a Disney wedding makes sense. I have been to a wedding at Disney, but having Mickey Mouse and Goofy characters dancing with the guests is not my cup of tea.

I just went to a Cinderella party for a three year old. And while little girls loved to dress up as Cinderella, I don’t think 25-year-old really girls do. Not too many brides want to look like a cartoon character on their wedding day. Looking like Princess Diana is one thing, a Disney Princess is quite another. A G-rated wedding night is not a fairy tail ending.

5. Trump Steaks, Trump Vodka, Trump Rugs, Trump Water, Trump Cologne, etc. etc.

Trump is the most line-extended brand in America today. The Trump extensions are novelty items. They might sell a few in the short term, but long term Trump Vodka/Rugs/Water will never be a big deal.

Of course, all Trump extensions are licensed. So Trump doesn’t stand to lose any money on these deals, he just gets a cut if they sell. Which, in the case of most of these won’t amount to much.

Halloween Tricks and Treats

Happy Halloween!

In honor of Halloween, I thought I would follow up last week’s post on great restaurant branding with some of the scariest restaurant branding ideas I’ve recently come across.

1. The worst restaurant name.

Humuhumunukunukuapua’s, located at the Grand Wailea Resort in Maui, Hawaii.

This terribly long and totally unpronounceable name is the worst I’ve ever seen. The restaurant has a nice view, good food and benefites from being in a popular hotel, but what a missed branding opportunity. Never underestimate the power of a good name.

My husband and I referred to it as the huma-huma restaurant. I was too embarrassed to call for reservations or tell anyone where we ate because I had no idea how to pronounce it. Not a good idea for generating word of mouth.

The name means Hawaiian Triggerfish. Triggerfish would have been a whole lot better.

2. The worst line-extension restaurant.

It is a mistake is thinking that a popular brand in one category will translate into another.

Tommy Bahama, the hot men’s resort ware brand has gone bananas. I saw a Tommy Bahama restaurant in Maui. And see advertisements from Tommy Bahama Rum almost daily in the New York Times.

What are they thinking? Obviously they must be drinking too much of the rum. Just because a brand is successful doesn’t give you carte blanc to take it anywhere.

It is one thing for a famous restaurant to sell t-shirts, it is quite another for a famous shirt maker to sell cheeseburgers.

3. The worst menu addition.

When you build a powerful brand by focusing on a core attribute it is best to stick to that attribute. It is unwise to introduce menu items that are the opposite of your position.

Subway owns fresh and healthy sandwiches in the mind. Jared’s weight loss and the new fresh fit menu reinforce that position in the mind.

So what do they do next? They recently introduced personal deep-dish pizzas! How unhealthy could you get? No much in my opinion. Let’s hope Jared doesn’t go on a pizza diet.

4. The worst company naming strategy.

Luckily this one is just a ghost story. Using current marketing thinking at most companies today, you can see how Darden, founder of The Red Lobster chain, could have named their other restaurants:

Italian Lobster, Steak & Lobster, Bahama Lobster, Lobster Grill and Healthy Lobster.

Instead Darden went with Olive Garden, Longhorn Steakhouse, Bahama Breeze, Capital Grille and Seasons 52 to give each its own brand identity. Good move.

Think the fake names were funny? Well think again, it is a strategy countless companies continue to use. Because most companies prefer to launch line extensions than new brands.

It is exactly what Toys R Us did. They launched Kids R Us and Babies R Us. A strategy that has left the company in trouble. Even though the Babies R Us concept has taken off, it has succeeded in spite of its lousy line extension name because it was first in a new category. And its success has come at the price of Kids R Us being shut down and Toys R Us losing its toy leadership position to Wal-Mart.

5. The worst steal.

Everybody has watched with envy the success Starbucks has had in coffee. Starbucks has single handedly elevated the lowly .50 cup of joe to a $3 experience and obsession.

Instead of launching their own brands early on before Starbucks was firmly established, they waited and now everybody is jumping on the upscale coffee bandwagon.

McDonald’s is serving “premium” coffee along with lattes and espressos. Wendy’s is launching a Javaccino’s menu in an effort to become a beverage destination. On the Javaccino’s menu: Rainforest select sustainable coffee, iced pomegranate green tea and confused turtle Frosty-chinos.

6. The worst Halloween candy idea.

Snickers Marathon energy bars. Sounds like a great idea, take the best-selling candy bar and make it into an energy bar. Because really, what is an energy bar anyway, but lousy tasting candy bar.

The Snickers brand is known for great taste so they will rule the energy bar market. Right?

Wrong. These treats are unlikely to trick any kids or adults. There is nothing wrong with the bars, but there is everything wrong with the brand. Or should I say brands. Snickers Marathon bars come in many different varieties including: energy, nutrition, multi-grain, low-carb and protein. Just to totally confuse you.

Snickers is a candy bar, they would have been better off telling people to just enjoy a Snickers. One bar only has 273 calories and almost 5 grams of protein, not much difference from the Marathon bar. Selling energy bars undermines the candy. It tells people the candy is bad, when in fact they are not much different.

* Snickers: 273 calories, 14 g fat, 33 g carb, 5 g protein.
* Snickers Marathon: 210 calories, 8 g fat, 26 g carb, 14 g protein.

Snickers satisfies because it tastes great. Snickers Marathon is a poor tasting substitute. Remember you taste in your mind not your mouth. A Snickers energy bar is never going to taste good up there. Want energy? Grab a PowerBar.

Halloween warning:

On Halloween, kids play dress-up, act silly and scare people by catching them off-guard.

None of these are strategies you should use for marketing. Dressing up as something you aren’t, acting silly and scaring people are all bad branding ideas.

So Marketers, leave Halloween to the kids and keep your brand true, authentic and focused. No tricks allowed.

EBay Express a failure, I'm shocked. (just kidding)

In today’s Wall Street Journal the top headline is “EBay’s Bid to Go Beyond Auctions Isn’t Selling Well.”

Really? I’m shocked!

Well, actually I’m not shocked. I could have told you that months ago because the idea of EBay going beyond auctions violates a fundamental law of branding. And when you violate a fundamental law your brand suffers.

The Law of Expansion states that the power of a brand is inversely proportional to its scope. In other words, expansion weakens a brand. When you try to stand for everything and appeal to everybody your brand loses its meaning in the mind.

EBay owns online auctions in the mind, a powerful and profitable position to own. EBay owns it because online auctions created the category by being first in the mind.

EBay selling goods at fixed prices make no sense for the brand or to consumers. EBay Express is totally confusing and contradictory concept.

So why do companies constantly mess with a good thing? A never ending demand for growth on a quarterly, monthly or even daily basis at all costs. Unfortunately, building a brand for long term with a solid focused strategy like Southwest Airlines and no frills is the exception rather than the norm in business today.

To attain growth business leaders constantly try to move beyond the boundaries of their brands for a quick growth fix. Unfortunately the quick fix usually fails and many times even leads to long term losses for the brand.

Some examples:

1. Volvo C70 convertibles & coupes.

A carefree sporty convertible is the complete opposite of what the Volvo brand stands for. Not surprisingly the sporty Volvo C70 models did not sell well and were the biggest automotive sales flops of 2005.

2. Kids “R” Us clothing.

At its peak Toys “R” Us, the former top U.S. toy retailer, expanded its brand into Kids “R” Us and Babies “R” Us. Babies “R” Us has succeeded in spite of its lousy line extension name because it was first in a new category and faces no serious competition. (It might have been a better idea to give the brand its own name.) On the other hand, Kids “R” Us was a total disaster. And the toll it took on management’s time and attention under minded the Toys “R” Us brand. Today, Wal-Mart is the leader.

3. IBM personal computers.

When IBM launched its PC line in 1981, the company was the most powerful, most admired company in the world. The PC line was even first in a new category (the first 16-bit business personal computer.) Yet IBM reportedly lost $15 billion in personal computers over a 23-year period. Finally IBM threw in the towel and sold out to Lenovo, a Chinese company.

Every company wants to increase sales. Fortunately there is a right way and a wrong way to do so. In most situations, line extension is the wrong way.

Launch a second brand.

A better strategy is to launch a second brand. As Toyota did with Lexus. As Sony did the PlayStation. As Apple did with iPod. As MTV did with VH1.

A second brand allows a company to expand while still protecting the integrity of its core brand. Even today, IBM still means mainframe computers. Twenty-three years of marketing personal computers didn’t change its basic perception.

The truth is that nothing in marketing or in life is more difficult than changing a human mind. Go home and try and change the mind of your spouse and you’ll see what I mean.

Wake up and smell the coffee.

The coffee category has undergone a metamorphosis. You can blame it on Starbucks. The upscale coffee shop has greatly impacted the mindset of coffee drinkers across the country. What used to be the best part of waking up is now barely tolerated by most self-respecting coffee drinkers. Today drinking the ground-up stuff from a big tin can is like drinking wine from a jug. Done, but not proudly.

So what does Folgers, the former king of coffee, do now? Well, you know you what they would do. And that is exactly what they have done.

Coming to a store near you is Folgers Gourmet Selections. Folgers has moved into the premium coffee shelf with a Folgers coffee brand dressed up in pretty shiny bags, gourmet flavors and $20 million dollars in advertising.

Terrific! Now everyday coffee drinkers can move up to a premium brand they trust. Good thinking, right?

Wrong! The last thing a consumer wants is to move up the ladder with a brand from the bottom rung. Astonishingly, here is the strategy Procter & Gamble, owners of Folgers, gives for the move:

“Folgers is going after customers who drink a cheaper coffee every morning at home, but consider finer coffee to be a special treat. The brand is hoping there is an opening in the category for a gourmet-inspired coffee that could be consumed on an everyday basis.”

In other words, Folgers is moving into the mushy middle. Folgers Gourmet Selections is a classic mushy middle brand.

A once powerful brand sees the category moving upscale so it tries to appeal to consumers with an upscale brand at less than upscale prices with a down-market name. It never works, guys.

The lure of the mushy middle has gotten some of the world’s most powerful brands in trouble.

To combat the move to diet soda, Coca-Cola introduced C2, a half-calorie soda. A total disaster. Pepsi-Cola tried the same thing with Pepsi Edge. Another total disaster.

To combat the move to ultra-premium vodka, Absolut introduced Level from Absolut. So far, Grey Goose has nothing to worry about.

The Zales jewelry story chain tried to chase upscale customers by replacing almost a third of its merchandise with more expensive products. Result: The CEO was fired.

Gallo wine tried to move upscale with $80 bottles of Gallo Family Vineyard Estate Series. Ernest & Julio would turn over in their grave if they found out.

So what should Folgers do? Once a brand is so firmly established there is not much to do if the market moves upscale. All you can do is keep the brand focused, suffer some loss of market share and launch a new brand to appeal to the changing market.

In fact, Procter & Gamble does have another premium coffee brand on the shelves already called Millstone. But as a brand it is been expanded into too many varieties, so many it boggles the mind. Improving the focus and power of that brand make a lot more sense that trying to move Folgers up into the premium category.

Let me also comment on Starbucks, because I think they are making a big mistake selling their coffee in supermarkets. It diminishes the power of the brand. If I can make the same coffee at home, why should I spend $4 to buy a cup in the store? Starbucks should be a brand focused on an experience that can only be had in a Starbucks store.

So what should Starbucks do about supermarket sales, a huge potential market? First they need to keep Starbucks as a coffee shop brand. Period.

Second they have the perfect solution for a separate supermarket brand. Starbucks bought a company called Seattle’s Best Coffee (which most people assumed was Starbucks anyway). I would use the Seattle’s Best Coffee brand name as the supermarket brand. It gives a gourmet feel without bastardizing the Starbucks name by putting on retail shelves.

The best part about waking up for me is knowing there will always be another nonsensical line extension introduced to blog about in the morning.

Over the Edge

I have been following the interesting discussion going on over at Jennifer Rice’s blog over positioning, line extensions and second brands when a new brand came on my radar.

The way SC Johnson has handled its Edge brand represents what companies should avoid when launching new brands. It also demonstrates how line-extension can damage a core brand, confuse customers and leave no good enemy to fight. For those of you who have not been shaving for the last 100 years, a little history might be in order.

Over time, every category diverges, creating endless opportunities to build new brands based on these diverging new categories.

Years ago, men shaved with soap and a brush. You put the soap in a cup and stirred it up with a brush before slathering it on your face.

Then came Barbasol, the “brushless” shaving cream, a new category and a successful new brand.

Then someone got the bright idea of putting the shaving cream in an aerosol can to make a shaving “foam,” a new category that spawned a number of brands including Colgate.

But the big marketing victory went to SC Johnson, the company that introduced Edge, the first shaving “gel.” Edge went on to totally dominate the shaving cream category. A megabrand to say the least.

What is a shaving gel? A gel formula that you rub on your face into a full lather. Gels are said to lubricate better than foams. The results, according to some sources, are a closer shave without irritating the skin.

That’s the theory, at least. I’m not sure I agree that it’s a big advantage. I do know it takes extra work to message a gel into foam before it can do its job.

But no matter. What works in marketing is not being better. What works in marketing is being different. And a gel is definitely different than a foam.

Then there’s SC Johnson’s Skintimate? What is a skintimate? A shave gel for women shaving their legs. They did a great job with the Skintimate brand. It is a classic second brand with all the necessary requirements:

1- New name. 2 – New category. 3 – New identity.

Now women have an authentic brand of their own for shaving. And Edge can remain the male-oriented brand.

Having watched the evolution of the Edge brand over the years I have noticed despite the successes done they have made a few classic errors. So I feel it’s time to blow the whistle on a number of marketing mistakes that SC Johnson is making with Edge.

First of all, the number of Edge varieties is mind boggling. Today, Edge comes in 8 flavors: Sensitive skin, extra moisturizing, extra protection, normal skin, tough beards, clean, ultra sensitive and soothing aloe. Furthermore, you might think the Edge can would emphasize its leadership in the gel category with words like “The leading shaving gel.”

But no, the word “gel” is very small on the can. What SC Johnson does emphasize is “ADVANCED” and “REFRESH YOUR SHAVE.” Neither of which is very compelling or something they own. Brands should reinforce the position they own in their advertising and most importantly on the packaging. Something many brands miss. Gel should be large and bold on the can. After all that is why people buy Edge to begin with.

How many varieties should any brand have? In general, three is about right. In pricing, for example, you’ll generally find three categories: cheap, regular and expensive. Using the same sort of thinking, I would have three varieties of Edge: normal, ultra sensitive skin and tough beards. (Even Joe Sixpack could handle these choices.)

But what really boggles the mind is SC Johnson’s latest entry in the shaving category which it is calling Edge ActiveCare. What is an ActiveCare you might be thinking?

Well ActiveCare is a shaving cream. Yup, they seem to be going backwards. Maybe the ad slogan should be “Edge ActiveCare, it’s not your Grandfather’s shaving cream.”

Talk about evolution in reverse, if an Edge shaving gel is better than shaving foam and shaving foam is better than shaving cream, how can Edge shaving cream be better than Edge shaving gel?  It makes no sense and undermines the position of both brands.

Furthermore, Edge ActiveCare comes in three flavors: revitalizing, deep hydrating and deep cleansing. (Only a woman could deal with these choices. Joe Sixpack is going to be totally lost.)

And then to top it all off, there’s a fourth flavor of Edge ActiveCare. It’s called “Therapy” and it comes in a can. That’s right. To give it its full name, it’s “Edge ActiveCare Therapy Shave Gel.” I am now totally confused, I thought ActiveCare was a cream, now it comes in a gel variety. Baffles the mind.

What happened with the Active Care brand is unfortunate. It results from a brand management theory which plagues many major corporations today.

Companies are in love with their brands. They overestimate what the brand stands for in the minds of consumers. Edge is a shaving gel, period.

But that’s not necessarily what they think over at SC Johnson. I’m sure the company has a brand charting system that says that Edge is the shaving product that shavers trust, with the emphasis on “trust.”

Therefore, goes the thinking at SC Johnson, “Why can’t we use the Edge brand name when we introduce a new revolutionary way of shaving with “cream?” They attempt to launch it as a second brand. But they can’t help themselves and end up putting Edge boldly on the label and saddle the brand with a generic name leaving the consumer with Edge Cream in the mind.

Furthermore, calling it Edge ActiveCare leads the consumer to think “What is the old Edge no good?” Indeed that is exactly what the new brand should be saying, that Edge gel is passé. Much the way Edge did to it processor Colgate. But that is very difficult to do when Edge is on the label.

Had they done what they did with Skintimates and given the brand its own name and identity, I think it would have been a smart move.

There certainly is an opportunity to build a new shaving brand, but it would need a new category name and a new brand name. Using cream again is too confusing.

Look at the divergence in the pain reliever category. First there was Bayer. Then Tylenol. Then Advil. What will be the next big brand? Better Bayer? I don’t think so. It will be a new brand in a new category of relievers.

Will Tide wipeout?

            After reading my post about the 14 different flavors of Coca-Cola, Kevin Delaney was kind enough to send me a list of the different varieties of Tide detergent he found at his local Target store. Would you believe, there were 32 varieties on sale. Here’s the list.

·        Tide - Liquid

·        Tide - Powder

·        Tide Coldwater - Fresh Scent - Liquid

·        Tide Coldwater - Fresh Scent - Powder

·        Tide Coldwater - Glacier Scent - Liquid

·        Tide Coldwater - Glacier Scent - Powder

·        Tide Clean Breeze - Liquid

·        Tide Clean Breeze - Powder

·        Tide Free - Liquid

·        Tide Free - Powder

·        Tide High Efficiency - Liquid

·        Tide High Efficiency - Powder

·        Tide High Efficiency - Clean Breeze - Liquid

·        Tide Mountain Spring - Liquid

·        Tide Mountain Spring - Powder

·        Tide Tropical Clean - Liquid Tide

·        Tropical Clean - Powder

·        Tide with Bleach - Powder

·        Tide with Bleach - Mountain Spring - Powder

·        Tide with Bleach - Clean Breeze - Powder

·        Tide with Bleach Alternative - Liquid

·        Tide with Bleach Alternative - Mountain Spring - Liquid

·        Tide with Bleach Alternative - Clean Breeze - Liquid

·        Tide with a Touch of Downy - April Fresh - Liquid

·        Tide with a Touch of Downy - April Fresh - Powder

·        Tide with a Touch of Downy - Clean Breeze - Liquid

·        Tide with a Touch of Downy - Clean Breeze - Powder

·        Tide with a Touch of Downy - Soft Ocean Mist - Liquid

·        Tide with a Touch of Downy - Soft Ocean Mist – Powder

·        Tide with Febreze - Meadows & Rain - Liquid

·        Tide with Febreze - Spring & Renewal - Liquid

·        Tide with Febreze - Spring & Renewal – Powder

            Choice is one thing. But who benefits when a manufacturer offers so many different choices that consumers are totally confused?

            Certainly not the consumer. Who are make a rational choice of laundry detergent from a list of 32 different varieties?

            Certainly not the manufacturer who has to produce, stock and delivery the 32 different varieties.

            I don’t think you can find a marketing person who would agree with Procter & Gamble’s strategy . . . in detergent or toothpaste. (Crest is available in an equally ridiculous list of varieties.)

            And yet when you look at the market share of Tide detergent, you find that Tide dominates its category with a 41.3 percent market share, more than four times as much as the No. 2 brand.

            As a matter of fact, there is no No. 2 brand. It’s not like Coke and Pepsi. In laundry detergents, there are a host of brands that trailing so far behind Tide that no one deserves to be recognized as a true No. 2 brand.

            It’s Snow White and the Seven Dwarfs all over again. Gain, All, Purex, Cheer, Arm & Hammer, Etra and Wisk are the detergent dwarfs with no one brand having more than 9 percent of the market.

            In detergents, in cola, in toothpaste and in any other categories, it’s become a battle to capture shelf space rather than a battle to capture the consumer mind. The consumer can’t buy what’s not on the shelf. So the leading brands in many categories launch line extensions to push competitive brands off the shelf, or in some cases to locations where consumers can’t find them.

            Terrific in the short term, but dangerous in the long term. What’s a Tide? I don’t know and I’m sure most consumers don’t know either. All they know is that Tide is the brand that’s all over the shelf “so it must be good.”

            That sets up Tide for a competitive attack by a single brand that can stand for something in the mind. And don’t think it can’t happen.

            Take Hoover, the leading vacuum cleaner for as long as I can remember. What’s a Hoover?

            Well a Hoover comes in six different types: uprights, deep cleaners, hard-floor cleaners, canisters, specialty vacuums and central vacuum systems. But that’s not all.

Hoover uprights, for example, come in 14 different varieties.

·        Hoover Bagged Tempo Widepath.

·        Hoover Bagged WindTunnel.

·        Hoover Self-Propelled WindTunnel.

·        Hoover Ultra Upright.

·        Hoover Tempo Widepath.

·        Hoover Tempo Upright.

·        Hoover Bagless Tempo Widepath.

·        Hoover Fold Away Widepath.

·        Hoover Fold Away.

·        Hoover Fusion Cyclonic Bagless Upright.

·        Hoover EmPower.

·        Hoover Savvy.

·        Hoover Self-Propelled WindTunnel Bagless.

·        Hoover WindTunnel Bagless Upright.

            You know what happened next. Dyson came into the market with a limited line and one single, powerful positioning idea. “The first vacuum cleaner that doesn’t lose suction.”

            Two years after its introduction, Dyson became the number one vacuum cleaner brand with 21 percent of the market (compared to Hoover’s 16 percent.)

            Could that happen to Tide? Sure. Years ago, Tide had a single powerful positioning idea. “Tide’s in. Dirt’s out.”

            In the future, the theme might become “Tide’s in. Tide’s out.”