The daily chemical brand extension is like a rubber band?

The father of positioning Alice had advised: "The brand extension is a rubber band. The more you stretch a name, the more vulnerable it becomes." Many years later, people seem to forget the advice of their predecessors. With the increasingly fierce competition in the daily chemical industry, many companies have carried out brand extensions in order to gain greater market share and higher profits, and unbridledly pull this “rubber band”. However, the rapid expansion does not seem to have given the company much proud results, and even some counterproductive.

Extend too fast = overdraft brand power

In recent years, a number of powerful Japanese companies have gradually formed in the country. In order to pursue greater profit margins, companies continue to accelerate the pace of brand extension.

The rising star of the upstart, through the concept of “herbal medicine”, has opened up a breakthrough path for companies in the highly competitive shampoo market. However, the fast-paced brand expansion after taking off seems to have made it a bit too much. It is understood that in 2010, the overlord shampoo was not quelled by the dioxane storm, and another 480 million Hong Kong dollar investment plan was deployed. With a ten million yuan endorsement fee, Donnie Yen spoke of the new product of the overlord, the Overlord Herbal Tea. But the results do not seem optimistic. As of 2010, the Overlord Herbal Tea received only 0.6975 billion yuan, accounting for 4.7% of the total revenue of the Overlord, which is obviously far from the previous investment. At the end of 2011, even news of the withdrawal of the Overlord Herbal Tea was reported.

“The reason why Overlord faces such a difficult situation is not difficult to explain,” said one person who did not want to be named. He had analyzed the relevant personnel of the management department of Overlord Marketing. “The Overlord hair loss shampoo is the first in China to prevent hair loss and shampoo. Brands, popularity is very high, consumers will think of shampoo as soon as they see the product name and advertisement of the overlord, they will think of anti-hair shampoo. This cognition is already an established fact, to change the concept of consumer minds And the idea is hard."

"In order to maximize the brand effect, unbridled brand extension, this is an overdraft of brand power." Huang Shuji, deputy general manager of Guangzhou Ogilvy, bluntly stated that brand power is based on the brand loyalty of consumers. If the brand extension is at the cost of reducing the loyalty of the original brand, the sales generated by the extended brand come at the price of the original brand's decline. Then, the brand extension will outweigh the benefit.

Indeed, establishing brand influence in the market is not a day's work, but destroying a brand may be an instant matter. To maintain the influence of existing brands, overall planning is indispensable, and product development and extension cannot be ignored. The use of existing brand influence to try to penetrate other industries should be done with caution. Companies must consider the changes that consumers may already have after the introduction of new products and must not allow different types of products to be triggered under the same brand. Consumer confusion.

Brand extension needs relaxation

If the cross-category expansion of herbal tea is one of the overlord problems, the rapid brand extension is a more important problem for the overlord. In just one year in 2010, the performance of the overlord shampoo has not yet stabilized, and the overlord herbal tea has been introduced successively. The brands of the two different categories of skin care products and Herba Church, although slightly revenue-generating, but the overall performance of the Overlord is declining. In fact, not only the overlord, many domestic companies have tried to generate income faster through the rapid and extensive development of new brands.

Extensive branding is understandable, but many domestic companies do not have long-term plans. Not only do they fail to obtain the expected profits, they do harm to the brand value. Brand extension is a double-edged sword. If it is reasonable, it can speed up the development of the company, otherwise it will be a stumbling block to the development of the company.

The connotation of any brand is not endless. The brand extension is not a rubber band that can be elongated indefinitely, nor is it a race on the field. The faster the better. Brand extension needs to be moderate, and only a reasonable amount and speed of extension can guarantee the security of brand extension and ensure the sustainability of the company's health.

For many years, Bai Yunhu, general manager of Shanghai Yuezhuang Information Technology Co., Ltd., who has been marketing Procter & Gamble for many years, told reporters that brand extension should be a systematic and strategic business model that is gradual and rule-based. Wide variety of thin income, extensive extensions that do not speak of survival rate are taboos for brand extension. Brand extension should be one, live one, not one, live a few. Procter & Gamble's brands are many, but careful analysis of Procter & Gamble brands has two main categories: One is a brand that has settled for a hundred years, and the other is through the acquisition of a collection of brands. Its brand extension is extremely robust.

He also added: "The brand extension is a key part of the brand strategy. The product with irregular extension is the destruction of brand value. However, market practice shows that the brand structure of a single brand and a single product, such as Red Bull and Red Can Wanglaoji, is A “small-probability, transitional” successful brand architecture; and over time, a brand that starts as a single product will definitely extend the product line, which is much less risky than horizontally extending across a large span. In the case of single brands and multi-category products, if the category itself is highly relevant, the driving force of consumers is the same, and the channel correlation is large, such brand extension is correct and necessary. Otherwise, it is the wrong brand strategy.