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Naworring or Expanding the Brand?


Ramon Murguia Branding 2

When you put your Brand name on everything, that name loses power. That is a fact. At least in consumers minds about what your brand stands for and what value proposition it represents. When you are trying to build a brand, you should always stay firm to your value proposition and your target segment. Once you have those two in place, Branding becomes part of the 7 tactics to build a comprehensive and strategic marketing plan. However, successful brands have all the company performance and pressure over their shoulders. Moreover, the management team tends to propose new ideas to increase sales and expand the brand to new "opportunities" that could potential destroy what the brand have created, erode the strong association to that value proposition and minimize the category association it has.

As much as 90% of all new products introduced in the United States are line extensions. That number is critical if you think of how a market or categories might remain the same size in volume or value, only with more products while consumption does not change . For example, categories such as shampoo that has more than 1,300 brands competing, have a big impact in the size of each slice of the total shampoo market, but they don not make an effort to make the market pie bigger at least in volume. As a matter of fact, if you have so many competitors and people have 1 shower or 2 a day. How can you make them use more shampoo than what they already use? Do you think that launching more brands will benefit the brands? Take a look at the following picture and try to make a decision on what to chose.

Ramon Murguia Shampoo

Line extensions are introduced to the sole purpose to increase sales and market share. Most decisions are based on brand prestige and how they can stretch the brand to either product extension or brand extensions. Product extensions are launching new SKUs, packs, colors, add flavors, etc under the same brand. Brand extensions are brands that are entering to new industries or segments with the same brand name. However, the easiest way to destroy a Brand is to put its name on everything. Specially with categories that are not increasing in market size, what tends to happen is that most of these products accumulate dust in the supermarket. In fact, if you narrow the focus of your brand, you can create a more powerful branding. Most successful and recognize brands always initiate by focusing on the category, not expanding the brand with extensions or even worse with brand extensions. In order to dominate the category a brand should become the category reference and the ultimate objective of any branding program, is to dominate the category. Examples such as Kleenex, Q-tips, Post it, to mention some successful brands that are related even with the way the category is named.

As you can see, the more focus one brand is with the value proposition and in one category the more powerful that brand can become in the consumers mind. The more you expand your brand the more you dilute the benefit that brand is providing for consumers in a particular category. There is a lot of pressure for results, but keeping in mind that the long term success of a brand is related to the focus it provides to the category the better decisions you will be making to sustain the life of a successful brand.

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