NEW PRODUCTBRANDING

What is a brand ?

Branding is a combined effort of the company which is projected to the consumer.

Company

Brand

Consumer

Marketing

Design

THERE ARE MANY FACTORS THAT INFLUENCE THE SUCCESS OF A NEW PRODUCT.

• Does the product fill a compelling need?

• Is it unique?

• Is it designed, formulated, priced, packaged, distributed and promoted effectively?

• Any of these considerations can make or break a new product launch.

• With all of these potential pitfalls, it’s not surprising that at least 40% of all new products will fail within two years of their launch.

• If all of this isn’t challenging enough, there is one other consideration that is often overlooked: the role of your brand. Many experts agree that understanding how consumers view your brand can often be the most important factor influencing new product success.

STRATEGIC ALTERNATIVES

• Companies have two major alternatives when branding new products.

• The first is to launch the new product under an existing parent brand.

• This alternative can reduce the consumer’s perception of risk, helps gain distribution, increases the efficiency of promotional programs and reduces the cost of marketing programs.

• Yet, the second alternative, developing a new brand, may be the bigger opportunity in the long-run.

• Over extending a parent brand can confuse consumers, dilute the meaning of the brand and can even hurt the image of the parent brand.

• Virgin is a good example of a brand that has been extended in so many directions (Airlines, Colas, Music Stores, Mobile Phones, etc.) that the brand meaning has been significantly diluted.

• Sub-branding (also known as mixed branding) is a hybrid of the two alternatives discussed above.

• Nabisco is a parent brand that serves as an umbrella with sub-brands such as Ritz, Snack-Wells and Oreos.

• Sub- branding can offer the benefits of leveraging a parent brand while establishing a new brand that can provide much success over the long run.

• But companies must be careful with sub-branding. Sub-branding can still dilute the meaning of the parent brand and can be confusing to consumers.

IT STARTS WITH THE CONSUMER

• The first step in understanding how your brand will impact the success of a new product is to become familiar with how consumers view the brand.

• Understanding your brand is all about knowing what associations, both positive and negative, consumers link to your brand.

• These associations can include things like quality, value, innovation and reliability.

• But brands can also be very strongly associated with specific product categories. Because of these category associations, consumers can either grant or deny permission for a brand to enter new product arenas.

• It’s important to remember that the consumers’ view of your brand may not be the same as your company’s view.

• In the early 1980’s Levi Straus wanted to get into the market for dressier clothing. Their entry was called Levi’s Tailored Classics and offered men nice, off-the-rack suites. They knew that the Levi brand would be critical to the success of their new offering and concluded that their brand stood for quality clothing – a good fit with the new product line. But the Levi name was so strongly associated with blue jeans that the product failed. The company underestimated the importance of that one key brand association.

A FORMULA FOR SUCCESS

• Understanding where the consumer will give the brand permission to go is critically important.

• Is the brand strongly associated with a particular product category? If so, be sure you are clear about exactly what the product category is.

• For example, do consumers think of Campbell’s as a canned foods brand or a soup brand? Given the failure of canned spaghetti sauce and canned tomato sauce launched under the Campbell’s brand, it seems that consumers think of Campbell’s as a soup brand. The recent success of Campbell’s Soup at Hand (a ready-to-eat, microwavable soup) would tend to support this conclusion.

• Companies must also understand whether or not core brand associations help strengthen the new product. • A brand like Alka-Seltzer had many positive associations when

they were considering line extensions in the 1960s. One of Alka-Seltzer’s key brand associations was relieving an upset stomach. So when the company launched Alka-Seltzer Plus (a cold remedy), consumers were confused. What does a cold medicine have to do with upset stomach relief? In response to this confusion, the label has changed over the years. The word Alka-Seltzer has gotten smaller and smaller while the word Plus has gotten larger.

IMPACT OF AWARENESS

• Launching a new product under a well known parent brand can generate consumer awareness with much less money. Given the high cost of establishing new consumer brands, this can be a big benefit. By launching new products under an established parent brand, the cost of marketing programs can be reduced by 40% to 80%. But, remember, high awareness won’t be helpful unless the parent brand has the right associations.

• Many years ago, when Kimberly Clark first entered the disposable diaper market, they named their product Kleenex Diapers. But since the Kleenex brand was so closely associated with the facial tissue category, the product was a flop. The high awareness of the Kleenex brand didn’t do the trick. When they re-launched the product under the Huggies name, it was a big success.

USING RESEARCH

• So how do companies understand these critical brand associations before making new product branding decisions? Not surprisingly, the best way to understand consumers’ is through consumer research. Many companies conduct on-going brand tracking and brand equity studies.

• When information doesn’t exist or when you need information that is more specific to your new product launch, qualitative research is a good place to start. By talking to your consumers in focus groups, in-depth interviews and so forth, it is possible to develop a good sense of how consumers view your brands

• . Qualitative research can help you develop a very useful sense of your brand’s image and associations. Qualitative research can also give you an opportunity to explore consumers’ reactions to your new products and can help you optimize your offering.

• Quantitative research may be an appropriate next step – especially if your new product launch involves large amounts of money and risk. Quantitative research can help you validate findings from qualitative research and attaches specific, projectable numbers to your findings.

• Regardless of the research approach that you select, it is important to remember that you should always view your brand from the consumer’s point of view. With that perspective, your new products are one giant step closer to a successful launch.