from: Geoff Ficke
The extension of the brand can be a key to the growth and evolution of a consumer product line or service
Switzerland is the capital of fashion watchmaking in the world. A visit to Geneva and its surrounding cantons exposes the traveler to the hundreds of exotic watch brands made at this famous watchmaking center. Watch shops, displays, advertising and billboards and jewelers are omnipresent. Each brand is proud of the personalization, the details, the incredible complications and the mastery of the old world that is present in every handmade craft product.
Rolex, Frank Muller, Constantine Vacheron, Piaget, Chopard and dozens of other manufacturers offer pieces that retail for thousands, to hundreds of thousands of dollars. The exclusivity of the distribution is practiced with military diligence. In this world of clubs, an outlier was born in the late 20th century. The extraordinary Swatch line of watches was born.
Swatch is all that Audemars Piguet and Breitling are not. Mass production, simple mechanical movements, plastic bands, unlimited and flashy color combinations and very low sales prices make Swatch a watch for everyone. No exclusivity here.
Swatch has become an international success almost immediately. Consumers loved the bizarre and extravagant appearance of the pieces of the time. And then Swatch did something that seemed counter-intuitive: the Company collaborated with Mercedes Benz to create the Swatch range of cars.
Mercedes Benz and Swatch look like strange business partners. Yet, this has become an international example of a successful brand extension that is mature with benefits for both companies.
Mercedes Benz has been able to keep production thriving, develop small car manufacturing technologies that could never be perfected in their exclusive luxury models, generous profits and keep their brand and brand. The car they produce is known by consumers as a Swatch car, not like a Mercedes Benz Swatch.
Swatch, not having the ability to produce cars as complex as cars, has obtained the luster and the verve of having a vehicle produced by Mercedes Benz to sell. The car brand, the fun, the trendy color combinations of the interior and exterior of the Swatch cars stand out in a sea of bored, boring, even ugly looks. It is fun to own and drive a Swatch, also practical as a miserly fuel aspirator and a vehicle easy to maneuver in crowded cities.
The Swatch car has further extended the reputation and brand of the Swatch watch business. The same word Swatch creates instant thoughts of bright, fresh and fun products with great design cues. Swatch is by far the most sold watch brand in the world.
Rossignol is a famous ski manufacturer. Many Olympic champions, professional and serious skiers, prefer Rossignol skis to any other brand. This is one of the most famous sports brands in the world.
A few years ago Rossignol, after conquering the ski slopes, decided to enter another arena. They started producing tennis rackets. Rossignol tennis rackets are now ubiquitous for men and women on international professional tennis tours. This is another obvious example of using the concept of Brand Extensions to grow a mature company in another space.
Extension of branding can be detrimental to a franchise company. A famous example of this is shown in the history of the venerable fashion industry of Pierre Cardin. Cardin was one of the first supporters of the granting of his name. In the 70s, at its peak, Pierre Cardin was generating over $ 400 million dollars a year in the turnover of his clothing lines and fragrances for men and women. Then the search for licenses began.
Over the course of about 20 years, the fashion franchise Pierre Cardin had laboriously built began to crumble. The extension of his brand became a joke in the industry. The already famous logo of Pierre Cardin began to appear on a slew of completely independent, outmoded and inexpensive products. Sports bags, running shoes, cheap Asian ties, mass-market plastic tableware, bath towels and hundreds of other products have started filling stores with low-end products with the iconic PC logo. The department stores and luxury boutiques took note and interrupted the lines of Pierre Cardin that they had proudly carried for years.
Mercedes Benz has improved its business by extending its collaboration with Swatch. Pierre Cardin has not overseen his trademark and its extension into rubber-thong type products meant the death of his fashion house.
Brand extension is a technique we have practiced on our products and for consumer product brands for many years. It’s a wonderful way to grow a mature company. But remember, brand extension must make sense for your most important asset, your customers and customers. Do not do damage!
from: Geoff Ficke