Line extension is popular. No doubt about it.
At one point in time, professional baseball, football, basketball, and tennis teams in the New York City area were known as the Mets, Jets, Nets, and Sets.
The city’s off-track betting offices put up posters featuring the New York Bets. If the city had a gym team, presumably they would be called the New York Sweats.
Why stop there? A street gang could be the New York Ghetts. City planners, the New York Debts.
Fortunately for one’s sanity, the trend seems to be in the other direction. The tennis team changed its name from the New York Sets to the New York Apples.
One of the reasons for the continuing popularity of line extension is that in the short term, line extension has some advantages.
Let’s say there was going to be a professional swimming team in New York. “Here come the Wets” might be a typical newspaper headline announcing the event. With one word, “Wets,” we know it’s (1) a professional sports team, (2) located in the metropolitan New York area, and (3) involved in some kind of water sport.
But that’s only in the short term. As the original announcement fades in the mind, confusion sets in.
Is there really a swimming team called the Wets? Or have I confused them with a basketball team called the Nets? Or was I thinking about a tennis team called the Sets? Now let’s see, the Nets changed their name to the Apples. Or was it the Sets that changed their name to the Apples?
Because the line-extension name is related to the original name, it achieves an instant flash of understanding. “Ah, yes, Diet Coca-Cola.”
It also generates an instant flash of sales. When Alka-Seltzer announces a new product like Alka-Seltzer Plus, everybody stocks up on it. Consumers aren’t necessarily buying it, but retailers are.
So the early sales figures look good. (To book $1 million worth of business, you only have to sell $35 worth to every supermarket.)
Business looks great the first 6 months as you fill the pipelines. But when the reorders don’t come in, all of a sudden things turn dark.
After the initial recognition of a line-extension brand, the prospect is never quite sure there is such a product.
Schlitz Light, Pall Mall Extra Mild, Jergens Extra Dry. Brand names like these slide into (and out of) the mind effortlessly. They require almost no mental work on the part of the prospect.
Easy come, easy go. Line-extension names are forgettable because they have no independent position in the mind. They are satellites to the original brand name. Their only contribution is to blur the position occupied by the original name. Often with catastrophic results.
Way back in the thirties, the Ralston Purina Company was running radio commercials for “Ralston 1, 2, 3.” One was Shredded Ralston. Two was Regular Ralston. Three was Instant Ralston.
One, two, three, they’re all gone.
And the legendary David Ogilvy broke his pencil writing advertisements combining Rinso White with Rinso Blue.
Sara Lee tried to get into the frozen dinner field with products like Sara Lee Chicken & Noodles Au Gratin and Sara Lee Beef & Pepper Stew.
Sara Lee owns the dessert position. Nobody doesn’t like Sara Lee, but there were a lot of people out there who didn’t like the chicken & noodles au gratin. And didn’t buy it. Especially with the name Sara Lee on it.
So the kitchens of Sara Lee came in out of the frozen entree field. After dropping some $8 million on the project.
Almost everybody has tried line extension. Saturday Review Magazine tried to publish in four different flavors—The Arts, Science, Education, The Society. A $17 million loss.
Levi Strauss and Brown Shoe tried to launch, would you believe, “Levi’s for Feet.” Levi is, by far, the market leader in jeans, but this time they booted it.
Then there is Avis flowers, Zenith watches, Old Grand-Dad tobacco, Bic pantyhose, Kleenex diapers.
Also Pierre Cardin wine. In both red and white, of course. And Chanel for Men.
“Two” seems to be a popular line-extension concept. We have Alka-2, Dial 2, Sominex 2, as well as Jaws 2. (Almost never has a motion picture sequel generated as much business as the original.)
Even advertising agencies have jumped into twos. Ogilvy & Mather 2, Doyle Dane Bernbach 2, N. W. Ayer 2, and Grey 2, to name a few twos.
But the most shocking announcement of all came from Proctor & Gamble. After decades of resisting the line-extension fad, P&G spent $50 million to introduce Liquid Tide. “We expect Liquid Tide to be the No. 1 liquid,” said a P&G spokesperson.
But Liquid Tide is unlikely to topple the industry leader, Wisk. Furthermore, the new product is sure to cannibalize Tide powder.
The classic test for line extension is the shopping list.
Just list the brands you want to buy on a piece of paper and send your spouse to the supermarket: Kleenex, Bayer, and Dial.
That’s easy enough. Most husbands or wives would come back with Kleenex tissue, Bayer aspirin, and Dial soap.
Line extensions like Kleenex towels, Bayer non-aspirin, and Dial antiperspirants have not destroyed the brands’ original positions. Yet. But give them enough time to hang themselves.
How about this list: Heinz, Scott, Kraft.
Will your spouse bring back Heinz pickles or ketchup (or perhaps baby food)? Scott tissue or towels? Kraft cheese, mayonnaise, or salad dressing?
The confusion caused when one name stands for more than one product is slowly but surely sapping the strength of brands like Scott and Kraft.
Like a star that’s overexpanded, the brand eventually becomes a burned-out hulk. An enormous marketing white elephant. What makes line extension so insidious is that the disease takes many years to exact its toll. Many years of slow, debilitating existence.
Take Kraft. A famous name which suffers from terminal line extension.
What’s a Kraft? It’s everything and yet it’s nothing. In almost no categories is the Kraft brand number one. In mayonnaise, Kraft is second to Hellmann’s. In salad dressing, Kraft is second to Wishbone.
Where Kraftco has the leading brand in a category, they don’t call it Kraft.
In cream cheese, it’s Philadelphia, not Kraft.
In ice cream, it’s Sealtest, not Kraft.
In margarine, it’s Parkay, not Kraft.
Where is the strength of the Kraft name? It’s too diffuse. Kraft means everything and nothing. Line extension is a weakness, not a strength.
What about cheese? Surely Kraft is a strong name in cheese. And it is.
“America,” say the ads, “spells cheese K-R-A-F-T.” Terrible spelling and terrible strategy.
Marketing is like horse racing. The winning horse is not necessarily a good horse. It all depends on the ability of the horses in the race. In a claiming race, the winner is the best of the worst. In a stakes race, the best is the best.
Kraft has been successful in cheese. Now, name all the other cheese brands you know.
Kraft is a winner in a claiming race.
Where there are no brands or weak brands, you can line-extend. But as soon as strong competition arrives, you’re in trouble.
In addition to the shopping list test, there’s the bartender test. What do you get when you order the brand by name?
“J&B on the rocks” should get you scotch. “A Beefeater martini” should arrive with gin. And “a bottle of Dom Perignon” will definitely get you champagne.
What about “Cutty on the rocks”? You’ll get scotch, of course, but will you get Cutty Sark or the more expensive 12-year-old Cutty 12?
Cutty 12 is a typical example of twisted thinking. Combine a well-known name (Cutty) with a descriptive adjective (12). Very logical from the point of view of the distillery. But what about the point of view of the drinker?
When you order “Chivas on the rocks,” you let everyone know you want the best. Chivas Regal.
To get Cutty 12, you can’t just say “Cutty.” And when you add the “12,” you’re never quite sure whether the bartender heard you or, just as important, whether the people around you heard the “12.”
Nor does the promotion of Cutty 12 help the original Cutty Sark brand. It’s a constant reminder to the Cutty Sark drinker that he or she is drinking a lower-quality product.
Cutty 12 got into the ball game after Chivas Regal, so we shouldn’t have expected much. But there was a 12-year-old brand of scotch in the U.S. market well before Chivas.
Johnnie Walker Black Label.
Today, of course, Chivas Regal outsells Johnnie Walker Black Label by a considerable margin.
“Give me a Johnnie Walker with a splash, bartender.”
“Black Label or Red Label, sir?”
“Aaaaaaaaaaah … the hell with it. Make it a Chivas.”
Cutty 12 and Johnnie Walker Black Label are step-up examples of line extension. They usually result in anemic sales at the higher-priced end. (Who wants to pay premium prices for a low-price name?)
The step-down problem is just the reverse. Step-down products are often instantly successful. The hangover comes later.
Before World War II Packard was the premier American automobile. More so even than Cadillac, it was a status symbol esteemed all over the world.
Heads of state bought armored Packards. One was made for Franklin Roosevelt. Like Rolls-Royce, Packard loftily declined the annual model-change policy of lesser makers. They positioned themselves above the pack.
Then in the middle thirties, Packard introduced their first step-down model, the relatively inexpensive Packard Clipper.
The Packard Clipper was the most successful car Packard ever built. Sales were terrific, but it killed the company. (Or more precisely, it killed Packard’s prestige position, which in turn killed the company.)
Packard drifted along until 1954 when Studebaker absorbed the company. The end of the road came years later.
What do you know about Cadillac? How long is it? What colors does it come in? What’s the horsepower of the engine? What options are available?
To the average automobile prospect, General Motors has succeeded in communicating almost nothing about Cadillac. Except its position as the top-of-the-line, domestic luxury automobile.
But even General Motors sometimes forgets that for every product there are two points of view. And most line-extension mistakes are made because the marketer did not appreciate this fact.
What’s a Cadillac? This might surprise you, but from General Motors’ point of view, a Cadillac is not an automobile at all. It’s a division. As a matter of fact, it’s one of GM’s most profitable divisions.
But from the buyer’s point of view, Cadillac is a big luxury car. You can see the problem.
Because of the gasoline situation, Cadillac is worried. So to maintain that profitability, General Motors has introduced a small Cadillac, the Cimarron. But in the long-term a mini-Cadillac conflicts with the big-car position that Cadillac owns in the mind.
So the prospect looks at the Cimarron and asks, “Is it or isn’t it a Cadillac?”
Long-term, the Cimarron gets in the way of the most effective answer to the challenge of smaller luxury cars like Mercedes and BMW. To establish a small luxury brand, General Motors needs a separate high-price name and a separate dealer organization.
For automobiles as well as other products, you can ask yourself that age-old question and you’ll know if you have a positioning problem.
What is it?
For example, what’s a Chevrolet? It’s a car that’s fallen into the everybody trap. By trying to appeal to everybody, a product winds up appealing to nobody.
What’s a Chevrolet? We’ll tell you what a Chevrolet is. It’s a big, small, cheap, expensive car.
O.K., how come Chevy is still No. 1? How come they haven’t lost their leadership to Ford?
To which we reply, “What’s a Ford?” Same problem. Ford is also a big, small, cheap, expensive car.
Ford has another problem. Not only is Ford an automobile brand. Ford is also a company.
A Ford Ford might be all right, but there is a real problem for the company in selling Ford Mercurys or Ford Lincolns. (One reason why the Ford Motor Company has always had a hard time selling higher-priced cars.)
A line-extension tragedy usually moves to its inevitable conclusion in three acts.
Act One is the big success, the big breakthrough. Usually the result of finding a wide-open creneau and then exploiting it brilliantly.
Volkswagon invented the small-car position and moved rapidly to exploit the breakthrough. “Think small,” perhaps the most famous single advertisement ever run, stated the position in no uncertain terms.
Very quickly, the Volkswagen Beetle established an exceptionally strong position in the automotive market. Like most classic success stories, Volkswagen became more than a brand name for a product.
“I drive a Volkswagen” says more than who made the automobile the person owns. “I drive a Volkswagen” says something about the owner’s way of life. A no-nonsense, practical person, self-confident about his or her status in life. A simple, functional piece of transportation equipment.
The Volkswagen owner is a reverse snob. He or she loves to put down the car buyer who loves to impress the neighbors. “The 1970 Volkswagen will stay ugly longer” expresses this attitude perfectly.
Act Two is fueled by greed and visions of unending successes. So Volkswagen extends Volkswagen reliability and quality to bigger, more expensive cars. To buses and jeep-type vehicles.
Act Three is the denouement. Is it possible that eight models won’t sell as well as one? It’s not only possible, it happened.
From first place in imported cars, Volkswagen fell to fourth. Behind Toyota, Datson, and Honda. And just barely ahead of Mazda and Subaru.
The pattern of early success followed by line extension followed by disillusionment is fairly common. After all, you can’t expect companies like Scott and Volkswagen to rest on their laurels. You’d expect them to find new fields to conquer. So how do they go about finding them? One way is obvious. They develop a new concept or a new product with a new position and a new name to match.
It will stretch, but not beyond a certain point. Furthermore, the more you stretch a name, the weaker it becomes. (Just the opposite of what you might expect.)
How far should you stretch a name? This is an economics call as much as a judgment call.
Let’s say you have a line of canned vegetables. Do you have a brand name for peas, another for corn, and still a third for string beans? Probably not. Economically, it wouldn’t make sense.
So Del Monte is probably right to use the same brand name on its line of canned fruits and vegetables. But notice what happens when a competitor zeroes in on a single product. The Dole line of canned pineapple.
Dole vs. Del Monte in pineapple is no contest. Dole wins every time.
So what does Dole do next? It puts the Dole name on fresh bananas. The Dole banana.
Let’s say Dole is successful in making Dole mean bananas. So what happens to pineapple? It’s the teeter-totter principle with bananas on one side and pineapple on the other.
But can’t Dole do what Del Monte did? Become a full-line supplier of canned and fresh food products?
Sure, but only at the expense of sacrificing its valuable pineapple franchise. And with the added disadvantage of being the last to line-extend.
We call line extension a “trap,” not a mistake. Line extension can work if.…
But it’s a big if. If your competitors are foolish. If your volume is small. If you have no competitors. If you don’t expect to build a position in the prospect’s mind. If you don’t do any advertising.
The truth is, many products are sold, few are positioned.
That is, the customer will pick up a can of peas without having a going-in preference, or position, for a brand of peas. In this case, any well-known brand name is going to do better than any unknown name.
And if you work for a company with thousands of small-volume products (3M is a typical example), you obviously cannot have a new name for every one.
So we offer some rules of the road that will tell you when to use the house name and when not to.
1. Expected volume. Potential winners should not bear the house name. Small-volume products should.
2. Competition. In a vacuum, the brand should not bear the house name. In a crowded field, it should.
3. Advertising support. Big-budget brands should not bear the house name. Small-budget brands should.
4. Significance. Breakthrough products should not bear the house name. Commodity products such as chemicals should.
5. Distribution. Off-the-shelf items should not bear the house name. Items sold by sales reps should.