Is Your Brand Coherent?

There are two types of brand; generalist brands which are aimed at multiple market segments; and specialist brands; which are often targeted on a single market segment.

Generalist brands often have products which are sub brands.  For example, Heinz is famous for its 57 varieties (in fact there has always been far more than 57 Heinz product lines). Heinz Tomato ketchup is a sub-brand which has a number of product variants e.g. reduced sugar content and organic ketchup.  Generalist brands demand a differentiated marketing strategy.

Specialist brands have products which are variants. Morgan is a specialist sports car brand aimed at vintage motoring enthusiasts. The brands products are variants of the vintage sports car design (including the three wheel tricycle). Jim Dunlop is the go to brand for guitar plectrums and a wide variety of plectrums is produced using different materials to give distinct tones.  Specialist brands require a niche marketing strategy.

There are commonalities between generalist and specialist brands.  Both have physical and intangible attributes.  Both have core and peripheral facets. To be successful and to grow brands, these attributes and facets have to be coherent.

Commonly, brands grow through multiplication.  growth through the introduction of product variants.  In this way specialist brands can grow to become a generalist brand and market expansion occurs.  There is a gradual shift from a niche strategy to a differentiated strategy.

Often growth requires adaptation of a brand’s products as the initial market is expanded and growth may also require the adoption of new distribution channels.  The marketing mix may need to be adapted to suit the requirements of these new distribution channels. Care needs to be taken to deal with potential channel conflicts e.g. pricing disparities.

Often market expansion to grow a brand means going international. In such circumstances brands may need to be adapted to suit different cultural and social norms.  The use of local agents and distributors may mean that there is local reinterpretation of brands.

What is certain is that growing a brand introduces diversity.  So how do you grow a brand without losing the necessary facets and attributes of the brand identity?

The answer is the creation of brand coherence.  Growth of a brand should not be seen purely in terms of increases in sales and profits. You also need to grow the brand’s reputation, identity and its defences against competition.

This means that brand growth requires your business to be coherent in everything it does.

Brands are constructed in stages; from top to bottom.  Senior managers will create a brand platform, the core of a brand; its identity.  Functional management will then create products services and experiences which fit that brand identity.

Consumers however view brands in the opposite way. They see the products, services and experiences first.  Consumers assess the essence of a brand through their expenditure and the processes they have to go through to access and use the brand. The brand identity is perceived through repetition of this process.

A consumers first contact with a brand is the beginning of a journey to the understanding of a brand’s identity.

So managers across an organisation from Marketing to HR, Finance to Operations, need to know the perception an organisation is trying to create in the minds of consumers with respect to the brand.  They must be sure to eliminate that which does not conform to the required brand perception.  So a successful brand, to be coherent external to the organisation, needs strong internal policing of brand activities.

You need to build a brand through specific brand values, its exclusiveness and by the creation of motivational added value.

You need to teach and repeat brand coherence over time.

However, repetition of brand attributes to build coherence does not mean uniformity. Repeating an identical message over and over again is boring. To drill your brand coherence into the minds of consumers, you need surprise.  However if you overdo the variety in your message, your brand identity will turn out fuzzy and incoherent.

Brands need family resemblance, but everything should not be cloned. There and be difference but within a family resemblance.  The Kardashians are a family brand but each member of the family is different.  However each Kardashian shares family traits.

So when growing a brand you need to retain core family attributes and the core identity whilst carefully introducing variety and surprise.

A brand name is a point of reference and an indicator of added value. If you put a product under a brand name, you are attaching that brand identity to it.  If the product does bot conform to expected brand attributes, it is incoherent, and can risk the brand as a whole. Consumers must be able to visualise the family identity in the product.  Critical in this are product packaging, labelling and other physical elements of the brand.

If extending a brand, the introduction of big changes can weaken family identity.  Family identity cannot be reduced solely to physical appearance. You need to create and sustain the brand halo.

Brand coherence is not brand uniformity. An excess of uniformity kills consumer desire. Coherence involves little surprises but the maintenance of core brand values.

Brand coherence is a see-saw balance between those surprises and brand specifics.

Why firms use Brand Extension

The Ansoff Matrix tells us that brand extension as a growth strategy is a riskier option than market penetration and market expansion; although it is less risky than diversification.  Ansoff also stated that brand and product extensions should only take place once market penetration and market expansion opportunities had been exhausted.  So in today’s marketplace, why do so many firms choose brand extension as their primary method of growing their brand?

Well the answer is that many of today’s commercial markets are mature.  Market Penetration and expansion opportunities are scarce and increasingly costly.  Rather than starting from scratch in a new market, it is easier to enter it with an existing brand.

In his book The New Strategic Brand Management, J.P. Kapferer give advice on whether brand extensions is an appropriate strategy.  He strongly believes that in mature and luxury markets it is necessary.

Many luxury brands use extension as a core business model.  In these markets it can provide increased brand power and profitability.  This is why major names in the fashion industry introduce perfumes, luggage and watches.  Some fashion designers, such as Victoria Beckham extend their design services to products like cars.  Mrs Beckham apparently designed the interior trim of the Range Rover Evoque.

A successful brand extension relies on the business’s ability to create a distinct competitive advantage through leverage of existing reputation in a new, growing, market sector.

Kapferer argues that five basic assumptions must be met if a brand extension is to succeed:

  1. The brand must already have strong equity and a strong asset base.  Trust levels with consumers must be high.  The extension must offer strong customer benefits, both tangible and intangible.
  2. Assets must be transferable to the extension.  Consumers must believe and acknowledge that the new extension product will be endowed with the benefits already associated with the brand.
  3. Extension products must offer a real perceived competitive advantage in the minds of consumers compared to the products of competitors.
  4. The brand’s values must be relevant to the market segment into which it will be extended.  However, the segmentation of the new market should be done in such a way as to make it difficult for competitors to react quickly.
  5. The brand extension must be competitive in the long run.  That means you need to provide sufficient resources to achieve market leadership and to develop productivity.

Brand extension can also be a defensive strategy.  It can also be linked to efficiency and productivity measures.

  1. Firms use brand extension to reduce media and other costs.  Rather than the expense of separate campaigns for different products, they are merged into a single mega-brand.
  2. Some brands operate in declining product categories.  To avoid market contraction and closure, these brands need to expand into new segments.  In 2003, Porsche entered the 4×4 market.  A time when the market for sports coupe was declining.
  3. In business to business markets, brand extensions can evolve as a result of the need to provide ever-increasing customer value.  For example, a firm providing office cleaning services may begin to offer the provision and maintenance of house plants, or furniture, or art, to its existing customers.  British Gas faced new competition when the UK utilities market was opened up to competition.  They extended their base by offering domestic white goods maintenance to their existing customers.
  4. A brand’s market can be cyclical or seasonal.  Brand extension may be necessary to flatten out that cycle.  The Bill Paterson film, Comfort and Joy took inspiration from a real life  and very violent war between the operators of ice cream vans in Glasgow.  The real war was a very nasty affair between organised crime gangs who were using the vans to sell drugs.  In the film, it was a battle to preserve territorial boundaries.  The main protagonist of the film, a radio DJ played by Bill Paterson, got the competing firms to cooperate by extending their brands into the sale of deep-fried ice cream fritters which could be sold in the winter. (the film was made before the advent of the deep fried Mars Bar).
  5. Brand extensions can also be a result of a firm having insufficient resources to maintain a wide brand portfolio.  By merging brands the costs of packaging and promotion can be shared.  Scarce resources can be targeted on productivity or quality improvement.  In such circumstances, brand extension can a curse into a blessing turning a house of brands into a branded house.
  6. Brand extensions can get round promotional and advertising restrictions.  The promotion of tobacco products is widely prohibited.  Brands such as Dunhill are now as well, if not better known for their luggage and accessories than their cigarettes.  In many states it is illegal to advertise prescription drugs directly to consumers.  Pharmaceutical firms therefore extend their brand into over the counter medicines.

Brand extension can be a risky growth strategy but if you are operating in a market which is mature and meets the above circumstances, brand extension may be a better option than a full diversification.