the perils of over extending a brand

09/11/2006 07:30:00 PM
Influx believes it's smart for brands in slowing categories or those in need of quick revitalization, to adopt what we term "fashion strategy"; this being multiple and sometimes limited edition product extensions that can have the effect of infusing new life into a tired brand.

Nestle's Kit Kat, is an established brand who has experimented with this approach. Under significant pressure in its core market, the UK, it went brand extension crazy.

According to The Globe and Mail, Kit Kat launched ten new flavor variants in 2004 alone. Some of these were pretty radical, Christmas Pudding, Passion Fruit, Blood Orange, Tiramisu, Orange Crush and even Curry. The article describes how British consumers got exhausted and confused by the plethora of variants and sales plunged by 16% in 2005.

This radical experiment pushed the strategy to its limits with disastrous consequences for the brand. As Nestle Canada's CEO, Bob Leonidas highlights in the article; the key to to profitable brand extension is moderation as well as staying true to the fundamental elements of a product and the consumer's expectations.

This doesn't mean that adopting a "fashion strategy" is wrong, but it needs to be approached with considerable care.
Tags:

Comments
It appears you don't have Flash installed.
Email this article to a friend
Send an email to a friend with a link to this article. Items with an asterisk (*) are required.

Your Name:
*

Your Email:
*

Friend's Name:
*

Friend's Email:
*