Brand Extension is Brand Extinction!

“Lux is soap, right?”

“Yeah, why”?

“I am told it is now shampoo too”?

"Bull”!

“No, I am serious.”

“Come on, who would ever use Lux on their head”?

Well, it turns out not many did and Lux shampoo is dying in the shelves. Maybe dead and gone by now. Looks like nobody at Hindustan Lever used their heads in the first place. But, hey wait. Lux stands for glamour. And people want glamorous hair, don’t they. And Lux is a great brand, isn’t it. So why should Lux shampoo die?

Well, the question is so good that it is stupid! And the next 1,788 words in this column explore this very question and more.

We are talking about a silent killer here; call it an epidemic if you will, which is spreading across the Marketing landscape. It goes by the name Brand Extension. Brand Extinction would be a more apt name for it!

Let’s go back to Lux again. Yes, the Indian woman wanted glamour; wanted to be like her favourite actresses; and got it with Lux – but make no mistake about this, she got it all with Lux soap. She just used the name ‘Lux’ as a surrogate for soap and that was Lux’s reason for success.

It made the brand stand for the generic.

In other words, she bought glamour in soap form and called it Lux. So what happened when Lux shampoo came by? She could not bear to use soap on her hair. So Lux shampoo had to die. It was destined to die. And, it will, if it hasn’t so far.

No matter how we all live, we like to simplify life. Simplification includes slotting the best brand (in our mind) in a category and using them interchangeably. Pepsi is Cola. Mach III is razor. NIIT is Computers. The Hindu is Newspaper. This is the pinnacle of branding – making the brand stand for the category. “Can I have today’s Hindu please?” No need to say “Can I have today’s Hindu newspaper?” ‘The Hindu’ has over the years made the brand stand for the generic. And when you extend the brand you shake the very foundations of the brand in the mind of the consumer.

Here’s how.

The Hindu means credibility; The Hindu means authenticity; The Hindu means trust. But what are buried within these traits are things that the consumer would not be able to articulate nor would the marketers of The Hindu be able to figure out. The Hindu is English; The Hindu is a daily; The Hindu is newspaper.

When the marketer tries to extend The Hindu into a Business paper, it fails. Why? The Hindu is not business, that’s why. When the Marketer tries to extend The Hindu into a Web site it fails. Why? The Hindu is newspaper. Try extending The Hindu into anything else and I would wage a month’s pay it will fail too. The marketers can believe that they are extending The Hindu’s credibility, authenticity and trust into other product categories. But the consumer is not willing to extend them any further from where it currently is.

Now you know why ‘The Hindu Business Line’ is floundering. It flounders, not just because of The Economic Times, but also because of ‘The Hindu’ prefix to the brand name. The guys at The Hindu thought their brand name was a source of strength. They realized pretty late in the day that the truth was to the contrary. They tried making the prefix smaller and emphasizing ‘Business Line’. But the damage was done. You can’t expect to change fortunes by just changing the brand name. (More on this aspect of brand names in my next column!)

Welcome to the world of the specialists. To use the much-maligned example of the General Physician Vs Specialist, the world is moving towards specialists for each sphere of life and life’s problems. Gone are the days when we went to our neighbourhood general physician for whatever medical problems we had – from toothache to tuberculosis and from headache to heart ailments. Now, when we have a toothache we rush to the dentist. Problem with the eye? No problem, we just head to the Ophthalmologist. Thank heavens, we still don’t have a left eye Ophthalmologist and a right eye Ophthalmologist. Not yet, at least!

The same story is repeated when we buy brands. We slot the specialist in each category and destine it to be the category. Nothing more, nothing less. So, Clinic Plus is shampoo. When it is extended into hair oil, we simply ignore it and continue to use Parachute or Vatika or whatever we feel is the specialist in the hair oil category.

Need more proof of extended brands dying around us? Just take a look around - hair oils, skin creams, consumer electronics, toothpaste, you name it. The categories are awash with extensions and consequent extinctions.

Colgate. The undisputed leader of Indian teeth, till recently, is still fighting cavities. Just that there are more cavities in its marketing strategy. Ask any Indian women what Colgate is and she would have jumped up and said – “protection”. And, then what happens? Colgate is extended - Colgate Toothbrush, Colgate Toothpowder, Colgate Total, Colgate this and Colgate that. Any extended rubber band snaps after a point. That’s what happened and Colgate started stagnating since it was diffusing its basic brand image in the mind of the Indian women – ‘What’s Colgate now?’ Everything. Read nothing.

And that’s when something else happened. Hindustan Lever launched Pepsodent. Pepsodent targeted the mothers – Colgate style. Pepsodent appealed to the mother’s instincts taking the kids route – Colgate style. Pepsodent stood on protection – Colgate style again. Me too’s don’t work in marketing and Pepsodent should have bombed. It didn’t, simply because Colgate was losing its specialty appeal and Pepsodent walked in to occupy that slot, without a fight. The Indian woman started lapping it up and Pepsodent climbed up the stairs too fast for Colgate’s comfort and started breathing down its neck.

Smart Levers work huh? Nah. The silent epidemic called brand extension was at work again. At the corridors of Levers this time. “Pepsodent’s been a brilliant success. Let’s leverage its equity,” went the thinking there. Read, let’s extend it further. And Pepsodent 2-in1 is launched. So two brands can now fight Colgate. Wow, what a brilliant piece of garbage that masquerades as Marketing Strategy.

The icing on the cake was Pepsodent 2-in1’s base line – ‘The complete toothpaste”. So what does that make Pepsodent? Incomplete? Even Colgate could not have attacked Pepsodent better.

So, where is Pepsodent 2-in-1 heading? Needless to say, where Lux shampoo is. And, what more, it started diffusing what Pepsodent stood for in the minds of the Indian women who is getting confused. And the confused mind always tends to go back to things it is comfortable with – and in this case it’s Colgate. Surprised that Colgate is picking up lost market shares? You shouldn’t.

Let’s get this straight. Brand Extensions don’t work. Period. A Brand stands for one thing in the mind of the consumer – and more importantly in one category, one form only. I repeat ‘only’.

Well, marketers do continue to extend their brands in spite of its miserable failure record because of its short-run benefits – the mirage that, they find out only later. Let’s go back to Lux shampoo. The extension is launched and the sales force takes it to the retailers of India. The retailer is thrilled. “You mean Lux. It sells well and sure I would stock enough of this too.” After all it has the initial extra launch margins too. The initial launch targets are met and the marketing team breaks open champagne, “three cheers to brand extension.” But, like as we saw earlier, the Indian woman thinks other wise and continues to use her favourite brand of shampoo, thank you. The retailer will try to push the brand but ends up pushing it back only to the company, to where it rightly belongs!

But still, why is this mad frenzy for this marketing suicide called brand extensions? The marketing landscape of India is littered with the debris of dead extended brands but why is this lesson not learnt. Just take a look at any category near you.

India Today is a success. India Today Plus isn’t.

Fair & Lovely fairness cream is a success. Fair & Lovely moisturizing lotion isn’t.

Zee Hindi channel is a success. Zee English channel isn’t.

Dreamflower talc is a success. Dreamflower deodorant isn’t.

Well, the roots of this malaise can be traced to the short-term nature of the recruitment, promotion, increment policy that is prevalent in most Indian companies and the peer-pressure it creates within. More so in the marketing departments. Most brand managers handle a brand for just a couple of years. He or she is under pressure to leverage brand strength and rake in extra profits. He or she takes the easy way out and goes and launches a new product with an existing successful brand name. As we saw earlier, the extended brand shows initial promise, launch targets are met, accolades are heaped and the brand manager is promoted to another division or even worse, he or she flaunts this success to leap into another company. A new brand manager walks into his shoes only to coincide with the decline of the extension and promptly takes the blame for causing the decline. And when the final requiem is sung for the extended brand, the brand manager who caused it is two jobs or three divisions away working on, what else, another brand extension, of course!

But hey wait, what about these grand pan-category brands like Videocon, BPL, Philips etc? Aren’t they extended across categories? Doesn’t this argument against brand extension fall flat in front of them?

NO.

These brands belong to an era when serious competition existed more in its absence. Once competition walked in with their guns blazing clear leaders started emerging all over the place. Each of these brands still rule – but they rule just one of the categories they are in and not in all as they used to.

Take this simple test. When you think of Videocon, what comes to your mind? Washing machines, sure. No surprises and Videocon is the leader in washing machines and slipping in many other categories. Why? Consumers see Videocon as the washing machine specialist.

When you think of BPL, what comes to your mind? Televisions. No wonder BPL leads in TV and lags others in every other category. Consumers see BPL as a TV brand and not so much otherwise.

This tells us yet another crucial lesson – call it an escape clause for brand extensions. Brand extensions will succeed only and, make no bones about it, only when its competitor is another extended brand. Take deodorants, for example. Rexona, an extended brand, succeeds in it only because its competitors – Fa, Cinthol and Spinz - are all extensions.

What about all the other new kids on the block like Samsung, LG, Daewoo et al who have extended themselves across categories? Give them some time to hang themselves. Once the dust settles you will find each one ruling in one category and sagging in every other.

Want proof? Remember a brand called Philips? It had its name lent to every possible category in consumer electronics, and now probably sells well…. only in bulbs.

That’s brand extension for you.