What’s the connection between Freeserve rebranding as Wanadoo, Coco Pops becoming Choco Krispies, Dixons turning into Currys.digital, Nestlé launching Chunky and Kube Kit Kats, and Heinz branching out into “ready-made” baked beans on toast?
The flippant answer might be that they have all been a colossal waste of money; though in some cases this remains a suspicion yet to be proved. The more measured observation is that too much brand activity ­ whether at the level of brand migration or brand extension ­ is driven by anything but consumer need, and therefore faces an enormous possibility of failure.
Let’s look at the Wanadoo story in a little more detail, as an example. France Telecom has spent about &£30m advertising Wanadoo in the UK, mainly in an effort to rebrand Freeserve after its acquisition from Dixons. Some attribute the motive to Gallic brand chauvinism rather than an obvious need to rationalise brands. It’s a suspicion made plausible by France Telecom’s decision, only two years later, to drop the Wanadoo brand in favour of Orange, a brand it had acquired one year earlier than Freeserve, in 2000. It may be that the convergence agenda has moved on a lot in two years or, alternatively, that France Telecom is guilty of muddled corporate thinking.
Not all brand migrations proceed in this unsatisfactory fashion. Masterfoods has proved astute in balancing global brand management with local market requirements. As can be judged from its largely successful transformation of Marathon into Snickers and Opal Fruits into Starburst. We have yet to see the fruits of Virgin Mobile’s marriage with the bureaucratic nightmare that is NTL. But Virgin Mobile brand director James Kydd (expected to become marketing supremo at the newly merged telco) is right to stress the need for reform, especially in the area of customer service, before Virgin lends its brand name.
Kellogg, on the other hand, was forced into an embarrassing U-turn over Choco Krispies in 1998, because it had underestimated public reaction. As for Dixons (stores) ‘migration’ into Currys.digital, it has all the signs of disorderly retreat after a surprise rout by the online brigade. The real question underlying this particular piece of brand migration is: how could DSG have allowed what was once such a great brand name to become so diminished before taking action?
The same psychology all too often applies to brand extensions. The fact that they are usually a cheaper alternative to genuine product innovation may be considered bad enough. But worse, in a way, is how they are used as a knee-jerk reaction to deteriorating market conditions. Thus Kit Kat’s expansion into Chunky and Kubes. And thus, we might suspect, Heinz’s foray into ‘ready-made’ baked beans on toast, in a desperate attempt to keep one step ahead of supermarket own-label competition. Naturally enough the popularity of these incremental ‘innovations’ can be ramped, if the media spend put behind them is large enough, but that in itself is unlikely to lead to significant repeat purchases. As a famous American adman once said: “The consumer is not a moron.”