Brand extensions that turn into turkeys

The news that Bernard Matthews is planning to launch organic and free-range products in a bid to encourage consumers to "reappraise" the company (MW last week) has been met with some scepticism by industry observers.

While branding experts say that the move to organic and free-range products as part of a wider Bernard Matthews revamp shows consumer insight and coherent strategy, there are also suggestions that it is a step too far and smacks of desperation.

Graham Hales, managing director of Interbrand, believes that any brand that has suffered from the scrutiny of TV cameras will find it hard to change consumer perceptions.

"It must be abundantly clear to Bernard Matthews that they must do something tangible," he says. "But an organic range tries to take it back to a rural idyll of days gone by. The news cameras showed footage of food processing plants rather than Bernard Matthews’ stately home."

The peril of extending a brand into new categories has become part of marketing folklore, with the industry littered with examples of failures. Branding experts continually warn that any extension will only work if it is true to the brand’s values. But such advice is not always heeded.

Hales says that many brand marketers do not realise the value of the brands that they are looking after but instead "want to be seen to be doing things". He adds: "They want to create action and have ideas. A good idea will increase brand value but a bad one will decrease it."

Giles Lury, director at The Value Engineers, thinks brands should be moved in a step-by-step process over a period of time but he adds that consumer research can often give brands misplaced confidence in a launch.

"People are so used to being asked whether a brand could move into new product areas they always agree but that does not mean that it should," he says. "Companies should ask themselves if it is relevant."

Lury points to the extension of Timotei into skincare products in the late 80s which, despite being positioned as a mild product for everyday use – like the shampoo – failed to win over consumers.

Brand over-extension
Adrian Goldthorpe, vice-president of strategy and innovation at FutureBrand, believes easyCruise is another example of over-extension. He says it went against easyGroup’s brand strategy because it took out the essential elements of a cruise. "Its strategy is to strip out a product to make it easier and more functional. If you strip out the fun and leisure of a cruise, there is nothing left."

The large number of variants launched by companies such as Coca-Cola and Nestlé-owned KitKat are also seen as desperate attempts to reignite sales of the core brand with irrelevant products such as lemon yoghurt-flavoured KitKat and Coke with vanilla. Goldthorpe says: "Flavour extensions do not really harm a brand but they do not do it any good either."

While some suggest a lack of rigour when it comes to consumer research can be blamed for failed brand extensions, there is also a feeling that too much research can lead to paralysis.

But Lury points out that there are other ways for a company to develop and grow. He says "There is an idea that a brand extension is always the right answer to a problem, that it is almost a panacea, rather than investing in an existing product or a completely new brand, or even buying a new brand.

"Too often brands do not have a long-term vision, so they do not really know what they should or shouldn’t do."