Nigerian corporate organisations particularly the fast moving consumer goods segment of the manufacturing sector, has had a fairly infamy reputation towards brand extension marketing strategy. Most products given birth to as result of the marketing exercise usually frequently experienced hiccup hence their early exit from the market.
Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. The new product is called a spin-off. Organizations use this strategy to increase and leverage brand equity.
This, in Nigeria, has been a more frequent marketing activity. Prominent brands are usually the first to jump at the idea of line extension either to consolidate on the existing equity or wade off competition. Most of often than not, the resurgence in competition mostly in price will give rise this effect.
Besides, trying to consolidate on the existing marketing segment or wading off competition, line extension can also seek to recreate new market environment for the brand. For instance, a telecommunications company can branch out to financial segment with the same operating name such as MTN Bank, Airtel Bank and even Glo Bank or GTBank Telecom, Access Mobile and so on.
For most brands rather than consolidate their positions, most brands tend to lose their equity, market share and never recovered from the setback even for the primary brand.
Examples abound for brands that jumped into the murky waters of line/brand extension. Some of the brands that tried unsuccessfully to brand extend are Gulder Max, Star Lite, Zero Coke, Maggi Signature- Jollof, Miya and Pottages, Maggi Machop, Pepsi Lite, Star Triple X, Harp Lime, Heineken Magnum and several others.
According to a book: Pitch: Debunking Marketing’s Strongest Myths written by a foremost brands and marketing journalist, Ikem Okuhu, he said, “A line extension can be a way to make a brand more relevant, interesting and visible. In doing so, it can create a basis for differentiation, build audience for the advertising of a tired brand and stimulate sales.
In most cases, before the line extension takes place, the mother brand should be a formidable brand in terms of market leadership, market share, equity and strong enough to fund the activity of the extended brand.
Organisations that have felt prey to this attractive but slippery marketing exercise are Nigerian Breweries Plc with Gulder for Gulder Max, Star Lager for Star Lite and Star Triple X, Guinness Nigeria with Extra Smooth and Harp Lime, Maggi with several variants and Maggi Machop and Indomie with Indomie Pepper Soup and Relish.
Other very unsuccessful brands that jumped into the murky waters of line extension include Coke Zero, Pepsi Lite, and Heineken Magnum.
Gulder had done well in its segment particularly when I chose to bankroll a reality TV show property, Gulder Ultimate Search, (GUS). Maybe because of how the show was viewed by consumers, the brand decided to introduce Gulder Max, a stronger version of the Gulder lager.
Supported with huge marketing outlays, the new innovation, as it was called could not make it beyond few months because Gulder was (is) already a masculine larger hence it demise.
Heineken Magnum was caught in the same web. A hugely successful line extension in other markets, Magnum could not excel in the Nigerian market because of our drinking culture. An average Nigerian beer consumer loves to count bottles but Magnum does fall within that category hence its early withdrawal.
Indomie has been a success story in the Nigeria new market development experiment. The brand enjoyed absolute monopoly until recently. To further, protect its territory, Indomie began to get involved in unnecessary brand extension.
Pepper Soup and Relish are yet the most unsuccessful in the venture. Today, these products are lying uninspiring in the shelves. It is, however, gathered that Indomie has concluded plans to finally withdraw these products from the market in the coming months.
Experts said, “Today, nine in every 10 new grocery products are extensions. The reason why brand extensions are so popular is obvious: when a company has saturated a market with one product, it has two options for future growth.”
“Either it expands into a new market or a set of markets or it launches a new product. If the firm chooses the latter option, it is choosing to exploit, perhaps, the most important asset owned by a business- the brand,” Darlington Okere, a communications expert said.
Marketing experts, Jack Trout and Al Ries spent most of their writing careers arguing that line extensions cost market share and can devalue the identity of the brand in the long term. But the success of extensions like Diet Coke, Gillette shaving cream and almost everything the virgin brand has done (except Virgin Cola, of course) has proven that brand extensions, if well executed can work.
NwokeAgulu
