A new survey carried out by Omnimas shows how successfully – or not – brands can move, or “stretch”, into new sectors.
Just over 2,000 adults throughout the UK were asked whether they would buy products – such as cosmetics and personal care products, membership of a health club or financial services – from a range of well-known brands.
The findings look beyond brand “permission” – what new products or services the consumer “permits”brands to offer them (this “permission” being reflected in sales), to brand “persuasion” – what the brand can produce that is difficult, if not impossible, for the competition to replicate.
The brand permission index of the survey was calculated by asking consumers the questions “can you imagine this brand moving out of its home sector?” and “are you willing to give it a go?”
Unsurprisingly the results show consumers are far more comfortable, whatever the sector of business, buying new products from established brands.
This highlights how more established brands are able to exploit their equity and high level of trust. They are perceived as more trustworthy and offer reassurance. These factors allow established brands to innovate outside their traditional sectors with relative ease.
Newer brands such as Egg or Freeserve seek to become the consumers’ preferred choice across an increasingly broad range of sectors. But the new research shows this may be presumptuous.
The permission index for newer brands is significantly lower than that for established brands. Consumers responded on an emotional level and were notably short on goodwill.
These attitudes were confirmed by the clear hierarchy which emerged from respondents’ answers to the “most popular dinner guest” question.
Consumers were asked to choose which brand they would most enjoy having round for dinner. Boots, M&S and Kellogg were by far the most popular. Nearly one in two respondents chose them, a result due, surely, to their familiarity and what is perceived as their friendly personae. Ikea, Gap and Orange were chosen by around one in five respondents, demonstrating their lower salience and respondents’ limited emotional involvement with these product categories generally.
Egg and Freeserve were selected by around one in ten, mostly male, respondents, reflecting the colder and more distant personalities of these brands.
The research also showed significantly more willingness on the part of women to develop an active relationship with brands: 56 per cent of them were willing to invite at least one brand to dinner, compared with only 19 per cent of male respondents.
Successful “persuasion” is the result of a brand bringing clearly defined, positive attributes which are relevant to the category it is moving into. This is what allows them to convert customers.
The research shows that Boots and Kellogg could expect one in four to one in five consumers to buy their brand if they entered the health and fitness sector. Their perceived expertise in healthy living and a modern image were two factors driving consumer acceptance of these brands’ move into different areas.
But if Egg decided to move into home food delivery or Gap into financial services, they would be unlikely to convert much more than 5 per cent of consumers.
Consumers would struggle to identify any relevant brand qualities or values which would allow them to imagine what the product would actually be like.
The survey also indicated that financial services and utilities are the sectors most open to new entrants, with stronger brand equities found in other sectors.
The cosmetics and personal care sector appears to be the least vulnerable. This may be due to the higher emotional involvement consumers have with brands in these sectors and the greater number of strongly differentiated brands already occupying the sector.
The survey shows that newer brands need to establish firmly their brand equities before they exploit them in new areas.
For this they require brand consistency at all levels, not to mention innovation used strategically to shape and enrich the brand.
The feasibility of brand stretch must be considered not only in terms of new revenue streams, but also in terms of the potential enhancement of the existing brand, reinforcing the core product’s appeal in its original market.
Factfile is edited by Julia Day. Benoit Wiesser, CLK planning consultant, contributed