How powerful is a brand name? Is it strong enough to cross borders? To cross oceans? To cross categories? Is a brand name strong enough to sell a related product or even sell an unrelated product?
The concept of "branding" a product began as early as the sixteenth century when tavern owners realised that to create repeat purchases of their products, it was important to link consumers to their brand.
By burning their name onto their barrels (actually "branding" the package), these tavern owners distinguished their product from cheaper imitations and created a mechanism that would set their product apart in the minds of the consumer.
From this early definition, marketers have made the art of branding an integral part of a brand's evolution.
Common marketing threads unite global brands:
Why do manufacturers create mega brand franchises? Some marketers would argue that by extending the brand across categories, you dilute the brand's image; others would claim that by extending the brand you continue to reinforce the brand in the minds of the consumer.
ACNielsen has been studying brands all over the world for more than 60 years. A lot of research carried out recently throws up some very interesting insights onto what characteristics take brands a lot further and make them truly global. Some of these would be:
1. Reinforcing the brand as expert: By extending a brand name that is synonymous with a particular expertise to categories that can benefit from that same expertise, manufacturers maintain the essence of the brand and reinforce the consumer's brand perception. (e.g., Gerber means babies
Gerber has put their name on a wide range of products for babies and toddlers, capitalising on their corporate expertise).
2. Maximising consumer trust in the corporate name: When a brand is a derivative of the corporate name, manufacturers are using the consumer's trust and recognition of their corporate name to extend to a range of product categories. In fact, most successful brand franchises in our research are some extension of a parent name (e.g., Nestlé). This number would be even larger if we included those brand franchises that have been acquired by another company (e.g., Nabisco, Gerber).
3. Extending brands that reflect a lifestyle: Manufacturers have created brand franchises that focus on a particular consumer lifestyle need (e.g., weight loss) and have extended that brand name across a range of products within multiple categories that benefit from the brand's lifestyle image (e.g., Weight Watchers).
4. Licensing the brand name: By licensing a brand name to manufacturers outside of the corporate expertise, manufacturers are able to use the expertise of others to extend theirbrand name into alternative product categories (e.g., Sunkist).
One interesting commonality, though not surprising, is that most of these brand franchises first began their expansion at "home". Once the brand expansion proved successful, the global expansion of the mega brand franchise could begin. There are some exceptions, however, where a brand has grown into new categories outside of the home country.
Unilever, for example, recently launched a Dove brand of shampoos in Korea, extending this brand beyond the traditional skin categories. With the success of this local expansion, the shampoo is now sold in more than 30 countries.
One last note ...
It should be highlighted that every successful brand name is not destined for expansion into new categories. While marketers may argue that if you have a strong brand name why not extend it, some manufacturers have taken a more focused branding approach.
Their belief is that by remaining focused, consumers are then able to clearly relate the brand to the category. It is an interesting marketing debate and one that will evolve over the next decade as manufacturers continue to expand their product lines across both categories and countries.
The author is the managing director of ACNielsen GCC and Iran.
The importance of brand names
The importance of brand names