What differentiates the winners from the losers? Good branding.
The power of a brand is inversely proportional to its scope.
The emphasis in most companies is on the short term. Line extension, megabranding, variable pricing, and a host of other sophisticated marketing techniques are being used to milk brands rather than build them. While milking may bring in easy money in the short term, in the long term it wears down the brand until it no longer stands for anything.
Levi Strauss has done the same with blue jeans. In order to appeal to a wider market, Levi introduced a plethora of different styles and cuts, including baggy, zippered, and wide-leg jeans. At one point, Levi’s jeans were available in twenty-seven different cuts. And if you could not find a pair of jeans off the rack to fit, Levi’s would even custom cut jeans to your exact measurements. Yet over the past seven years the company’s share of the denim jeans market has fallen from 31 to 19 percent.
Many companies try to justify line extension by invoking the masterbrand, superbrand, or megabrand concept.
But people don’t think this way. In their minds, most people try to assign one brand name to each product. And they are not consistent in how they assign such names. They tend to use the name that best captures the essence of the product. It could be the megabrand name. Or the model name. Or a nickname.
Marketers constantly run branding programs that are in conflict with how people want to perceive their brands. Customers want brands that are narrow in scope and are distinguishable by a single word, the shorter the better.
Marketers often confuse the power of a brand with the sales generated by that brand. But sales are not just a function of a brand’s power. Sales are also a function of the strength or weakness of a brand’s competition.
If your competition is weak or nonexistent, you can often increase sales by weakening your brand. That is, by expanding it over more segments of the market. You can therefore draw the conclusion that line extension works.
But in so doing, the only thing you have demonstrated is the weakness of the competition. Coca- Cola had nothing to lose when it launched Diet Coke, because the competition (Pepsi-Cola) also had a line-extended product called Diet Pepsi.
While extending the line might bring added sales in the short term, it runs counter to the notion of branding. If you want to build a powerful brand in the minds of consumers, you need to contract your brand, not expand it.
In the long term, expanding your brand will diminish your power and weaken your image.
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