Chapter 14 3. Debate on brand extension

"Brand extension" can also be called a multi-brand strategy, unified family brand strategy, or vividly compared to "umbrella brand strategy".Brand extension is the in-depth development and utilization of a company's mature brand resources, and its benefits are obvious: it saves a lot of brand building costs such as advertising and PR, and is conducive to concentrating the company's limited resources to build a big brand.The high popularity, high prestige, trustworthiness, and security of a big brand can drive the sales of many extended products—even if these products have no or few advertisements.At the same time, the best-selling of each product under the unified family brand will help further enhance the brand value.

However, how far can a brand extend?What is the law of extension?This is another series of propositions that plague every operator. A marketing expert once had a very simple analogy: the brand of a company is actually like a rubber band, it can be stretched, but it cannot exceed a certain limit.Plus, the longer you stretch a brand, the more fragile it becomes—perhaps the opposite of what you might think.So, where is the limit of the brand?The expert's answer was, "This is as much a question of economics as it is a question of judgment." Therefore, the extension of any brand is often an adventure, and sometimes it is an adventure that has to be taken.After all, most of the time, an entrepreneur is not satisfied with developing in one field - if the industry he is engaged in is already in the situation of market saturation or excessive competition, and brand extension itself is also one of the important means of enterprise innovation First, enterprises will find new growth points in the extension.

Since the birth of the first nutrient solution for children, the Wahaha family has become more and more prosperous, with more than 30 types of products. Interestingly, all products—whether children’s nutrition liquid, fruit milk, eight-treasure porridge, purified water, tea beverages—have only one surname, in other words, only one brand: "Wahaha". It is this extension strategy that has caused quite a bit of controversy in the marketing world. There are many different divisions of corporate brand strategies in marketing circles, but there are two main ones: one is the unified family brand strategy of Wahaha-style brand extension; the other is the multi-brand strategy of one brand with one brand or multiple brands with one brand.

As the name suggests, the multi-brand strategy refers to branding one or more independent brands for each product or category of products of the enterprise.This brand strategy has had many successful examples in many large international companies.Ordinary consumers may not believe that world-class watches such as Omega, Rado, Longines, Swatch, and Tissot are brothers and sisters of the same family. A masterpiece of the watchmaking group SMH.Beverage peer Coca-Cola not only owns the three main brands of Coca-Cola, Sprite, and Fanta, but also successively launched "Heaven and Earth" mineral water, "Lanfeng" tea drink, "Striking" soda and the latest "Queer" juice .

Procter & Gamble is undoubtedly the most frequently cited by marketing scholars when they talk about multi-brand strategy.Founded in 1837, Procter & Gamble is the world's largest manufacturer of daily consumer goods and ranks 75th among the world's top 500 companies.The company has set itself up with more than 250 brands, more than 50 of which are popular brands, among thousands of products ranging from deodorant to facial tissues to mouthwash to disposable diapers. world-class brand.What people talk about the most is that Procter & Gamble has developed a batch of famous brands for only one product of shampoo, and divided the market with different categories and fine positioning.At present, there are five major actresses in the Chinese market: Head & Shoulders (anti-dandruff expert); Pantene (rich in provitamin B5); Rejoice (elegant and smooth, shampoo and conditioner in one); Sassoon (moisturizing vertical feeling, used by professionals) ); Runyan (traditional Chinese medicine is more black).In 1931, Procter & Gamble established the "brand manager system", a multi-brand management system, on the basis of rich multi-brand practice accumulation, which was generally regarded as a "new era" of marketing by later generations.

Advocates of a multi-brand strategy tend to support their views with the following points: ——Multiple brands have different personalities and interests, which can attract more and different consumers and bring greater purchase coverage. ——Do not maintain the reputation of the company on the success or failure of a brand, so as to reduce the risk of the enterprise.Marketing generally believes that any product has a life cycle, which will go through four stages: birth, growth, maturity, and decline.Only using a single brand may affect other products due to the reduction in sales of the main product.In addition, if a product has a crisis such as quality problems, the multi-brand strategy will be more conducive to preventing the crisis from expanding.

- Provide more choices for low brand loyalists.Brand dissociation in purchasing behavior often occurs to those with low or no brand loyalty, and the only way to intercept brand dissociation is to provide multiple brands. — Encourage reasonable competition within enterprises.One of Procter & Gamble’s experience is that the market is always competitive. Instead of letting other companies’ new products occupy the market, it is better to challenge yourself and let the company’s products of different brands occupy the market separately to consolidate the total market share.As the saying goes, "Fat and water don't flow into outsiders' fields."

As Al Ries and Jack Trout described in "Positioning": With the continuous enrichment of material products, people become more and more dizzy.For example, a college graduate has about 8,000 daily vocabulary, and there are more than 10,000 different brands of goods on the shelves of any small supermarket.In order to cope with the product explosion and make it easier for consumers to choose their own products more clearly, the best way may be to imagine that there is a set of ladders in the human mind, each ladder represents a category of products, and there is a product brand on each level.Any sane manufacturer must convey a clear message to consumers unmistakably: which layer of the ladder is your product on, and what is the difference from other brands?This is positioning.However, brand extension will just make the brand positioning blurred, which will eventually cause consumers to be at a loss.

The success of the Procter & Gamble model and the views of Rees and Trout are the theoretical starting points for those who disagree with Wahaha's brand extension strategy.In the past few years, there have been two diametrically opposed arguments about the success or failure of Wahaha's brand extension. An author named Wang Xinxin wrote in the article "Brand Extension, Beware of Traps": "'Wahaha' was originally a brand of nutritional drinks for children. As soon as it appeared, it won the favor of children with its distinctive personality, making the product popular all over the country."

"However, I don't know when, under this brand, Wahaha red bean paste, mung bean paste, Wahaha eight-treasure porridge, Wahaha purified water and other products have appeared one after another under this brand. It deviates from the original attributes of the Wahaha brand such as 'nutrition drinks'. How effective is the manufacturer's brand extension strategy? It may be good in the short term, but it has begun to blur the original personality of Wahaha's charm. Many consumers face The Wahaha pure water advertisement of "I only have eyes for you" made by handsome guys and beautiful girls on TV is full of confusion, and the original belief in my heart that "Wahaha is a very good nutritional drink for children" has been blurred and shaken .So, in the long run, this may be a bad omen for Wahaha.”

Another article titled "Beware of the Beautiful Trap" mentioned, "A few years ago, Wahaha Oral Liquid quickly became a domestic famous brand with the simple and powerful appeal of 'drinking Wahaha, eating is delicious'. After that, Wahaha The group has successively launched Wahaha mung bean paste and Wahaha nutritional eight-treasure porridge to enter the children's market, rock sugar bird's nest to enter the elderly market, and even has been advancing into the liquor and real estate markets. These products that use the name of Wahaha have used a lot of human, financial and material resources of the company , but the market response is almost zero.” In the other camp, the "approving faction" represented by the planner Weng Xiangdong is equally plausible.Weng analyzed that: Over the past 15 years, Wahaha has achieved two extensions from children's products to products of all age groups, from a single product to a series of products.One of the important success points is that after years of accumulation, Wahaha has formed its own unique and inclusive brand core value of "health, happiness and trustworthiness".The extension of Wahaha is not just a simple expansion of products, but a unified penetration of the brand's core values. Weng Xiangdong also cited the example of Ting Hsin Group as evidence for Wahaha: Ting Hsin once tried to take the multi-brand route and used the "Kanglian" brand to promote soft drinks.With Ting Hsin Group's rich accumulation in the instant noodle market, its financial resources are not insignificant; as a Taiwan-funded enterprise, its brand promotion ability and marketing management level are not insignificant, but the result is that "Kanglian" failed to promote successfully.Ting Hsin Group learned from the painful experience, and finally decided to use the "Master Kong" brand to unify all its food and beverage products, such as instant noodles, oolong tea, eight-treasure porridge, biscuits, fruit juice, tea drinks, purified water, fragrant rice cakes, etc., all use the Master Kong brand.We have not found any substantial impact on the concept of "Master Kong" as instant noodles in the minds of consumers, nor have we found any significant decline in the market sales of "Master Kong" instant noodles. Among all the brand extensions carried out by Wahaha, naming pure water after "Wahaha" is the biggest turning point for Wahaha Company to expand from the field of children's products to the field of adult products, and it is also the most controversial. Even Zong Qinghou himself regards it as the growth history of Wahaha One of only a few adventures.Weng Xiangdong explained this from a very unique angle: it is very one-sided to mistakenly believe that "Wahaha brand has children's color and cannot be extended to adult products".Mickey Mouse's adult products, which are much more child-friendly than Wahaha's, are still selling well; Shanghai's Ami toffee was once the first choice for wedding candies.Children's products are not limited to the promotion of children's products.On the contrary, because it is full of childishness and affinity, it can win the special favor of adults to some extent, at least it will not cause resentment and rejection.If, as some people say, the children's color of the Wahaha brand will affect the promotion of adult food and beverages, then should Haier be suggested to remove the two children from the trademark, because the buyers of electrical appliances are undoubtedly adults. Wahaha remained silent amidst the rising and falling voices.Zong Qinghou seems unwilling to get involved in any vortex of debate from concept to concept. "The winner is the prince and the loser is the bandit", this is almost the "last truth" in business management.Zong Qinghou hoped to use his own practice to answer.The fact is that despite the turmoil and twists and turns, the brand extensions of Wahaha's leading products have achieved obvious success.In the process of writing this book, Zong Qinghou expressed his brand views to the outside world for the first time. He said, "No matter how advanced the theory is, it may become a fallacy once it leaves the suitable soil." Zong Qinghou believes that the advantages of multiple brands should not be denied, but the fact that the vast majority of Chinese enterprises are still facing the fact that the currency resources are not yet abundant.Under such circumstances, attempting to attack from all directions and defeat each other is probably just a good wish in the end.More importantly, although the competition in the Chinese market has been quite fierce in recent years, compared with Europe and the United States, it is far from entering the period of finalized competition.Take the two major products of fruit milk and purified water that Wahaha has successively intervened in as examples. At that time, there was no dominant category brand with an unbreakable position like the Western market. in this way.Generally speaking, in the Chinese market, which is still undergoing a major reshuffle of brand status, cost-minimized brand extension not only has opportunities, but even has great promise. In the growth of an enterprise, there is no brand strategy that remains unchanged and can have a competitive advantage.Enterprises often need to constantly correct their strategies with the evolution of the times and changes in the market.After careful study, we can find that in the development process of many enterprises, multi-brand strategy and brand extension are not either-or, diametrically opposed, and in many cases also have the compatible characteristics of mutual reference and penetration. The world's leading automobile giant, General Motors (GM), has four major brands: Buick, Opel, Chevrolet, and Cadillac. In addition, there are more than 40 non-dominant brands such as Oldsmobile and Pontiac, which is a typical multi-brand The operator of the strategy. On a single product, the logos of independent brands such as Buick and Opel are placed on the front face of the car, which is very eye-catching.But at the rear of the car, we can always find the company's unified main brand "GM (GM)", although the font is small.The marketing world refers to this practice as endorsed branding or helping branding strategy.Guaranteed brand strategy has been widely adopted by many domestic and foreign companies that implement multi-brand strategy. In the transmission of public brand information, it generally strengthens the independent brand image, supplemented by the unified main brand, which obviously draws on some aspects of the brand extension strategy. irreplaceable advantages.Take Procter & Gamble again as an example. At the end of every television advertisement for shampoo of an independent brand, there will always be a sentence "P&G, Procter & Gamble's high-quality products". Similarly, among the main products of Wahaha's series, we can also observe that only the carbonated beverage product has not been completely implemented a simple brand extension, but has been dubbed "Wahaha·Very Coke".Zong Qinghou explained that both "Wahaha" and "Very" are registered trademarks. The reason for adopting this dual-brand or source brand strategy is mainly to consider that there is already a strong category brand Coca-Cola in the domestic market.In this case, pure brand extension and pure multi-brand are not good choices.He also gave an example that Haier Group added sub-brands to the newly developed series of products with improved functions, and called them "Haier Handsome Prince", "Haier Little Prince", "Haier Little Prodigy" and so on. A novel primary and secondary brand strategy is also the crystallization of eclectic blending and penetration of brand extension and multi-brand strategy. Zong Qinghou believes that everything "changes to establish, and remains unchanged to lose".Brand extension may be the Waterloo in the development of the company if it is not done well, but it may also become an accelerator for the company to take off if it is used properly. The key lies in how to do it.The market economy is complex and ever-changing. We should not just copy books and formulate concepts with our eyes closed, but we must be good at operating flexibly based on our own reality. Another principle Wahaha adheres to in brand extension is that it is moderately controllable, and is generally limited to beverages that are highly related to the product range or industries with strong brand associations. The Wahaha brand core value is within a reasonable radiation radius.But there are exceptions. In 1994, Wahaha went west to invest and set up a factory in Fuling City, Sichuan Province, and one of the three merged local enterprises was a small brewing enterprise.Thinking back to the time when Liu Bei, Guan Yu, and Zhang Fei, the heroes of the Shu Kingdom, drank blood in Taoyuan and performed the eternal friendship from then on, Zong Qinghou made a final decision to launch "Wahaha Guandi Liquor" on the basis of the original corporate expertise and combined with Wahaha's brand advantages.The carefully brewed products quickly caused a sensation in the market, and the first batch of orders from sugar and wine companies in Harbin, Wuhan, Hangzhou and other places reached 600,000 bottles.However, due to the industrial differences in brand extension and other factors, the hidden dangers of further product development began to appear.The rational and pragmatic Zong Qinghou immediately broke his arm and quickly withdrew from the marketing field of "Guandi Liquor" to ensure that the company would not fall into possible quagmire. "Just like advertisement operation, the highest principle of brand operation should be 'reality and effectiveness', without the slightest exaggeration and impulsiveness." Zong Qinghou reflected. In a sense, "real and effective" is not the core of Zong Qinghou's marketing secret.