line extensions

Interplay between brand strategy and innovation

Many stories told by founders and top managers of Funky Brands in the Funky Brand Interview series have demonstrated that product design and innovation and brand strategy often go hand in hand.  A brand cannot be funky if a product itself has poor design. And vice versa, no matter how astonishing product design is, it's difficult to make a product known without a smart brand strategy that supports its development and launch.

According to the Brand Strategy Insider blog, although there is a close link between innovation and branding, the relationship between these two areas of business is often characterized by many tensions:

"In theory they work together, with the brand strategy providing the ‘face’ of the business’s growth strategy. Brand strategy helps companies bring innovation to the market. Innovation returns the favor by enhancing brand reputation. It sounds simple, but the partnership can be an uneasy one and it is particularly uneasy during a market downturn when investing in new brands or sub-brands can be perceived as ‘too risky’. The difficult choices imposed by hard times forces managers to confront the challenge of ‘brand stretch’ more acutely."

As the article suggests, tensions become especially strong while brand managers begin to play with the idea of introducing brand extensions (for more information about brand extensions, read my article Revitalizing tired brands: Chiquita's fruit bars).  Often,  brand managers are torn between the idea of staying consistent (consistency being one of the main goals of brand strategy) and temptation of delivering the new and unexpected to customers, which is the goal of innovation.

But can the surprise and novelty aspects of innovation become part of the brand DNA whilst allowing the brand in question to stay authentic and consistent? Although it may sound paradoxical, the answer is yes, and many Funky Brands have managed to embrace product innovation as part of their consistent brand DNA.

Many funky brands ensure consistent innovation by opening their companies to external talent. For instance, both Kipling and Swarovski often rely on the fresh inflow of creative ideas from outside of the company.  Both frequently strike deals with external designers in order to deliver constant surprise to their customers.  As a result, the surprise and novelty strategy of constant innovation has become a consistent feature characteristic of both brands. H&M has a similar approach to innovation by co-designing fashion collections together with external designers.

 

Opening your company to innovation does not only only happen at the level of product design.  When I join companies on branding projects in my role of a brand guardian, advisor or partner, I serve as a bridge between the company's existing know how and its potential to innovate.

 

 

Co-branding: Martini and D&G

Today I want to talk about an interesting example of a product launch video that I've spotted through the Facebook feed of Jean-Gabriel from FreshUp.TV. For branding addicts, its main attraction lies in the fact that it has included several impressively powerful branding techniques in one go: co-branding (or brand partnership), celebrity endorsement and even country branding.

Brand partnership

The product in question is Martini Gold by Dolce & Gabbana that has been co-branded by two iconic Italian brands. Here's an ad that accompanied the product launch:

As I've already written in my article Brand partnerships,

A brand partnership is usually a short or medium-term collaboration between two or more brands in order to enhance each other’s positioning vis-a-vis the target market.

In the case of Martini and Dolce & Gabbana, the co-operation between the two brands has been long-lasting and included such initiative as opening Martini bars within Dolce & Gabbana boutiques in Milan and Shanghai, and even a line of suits by D&G called Martini. The launch of Martini Gold is yet another step that strengthens both brands co-operation even further.

Celebrity endorsement

Italian actress Monica Belucci has starred in the Martini Gold ad acting as a brand ambassador.  In addition to that, the ad has been directed by a famous film and music video director Jonas Åkerlund who himself has a celebrity status.

Country branding

One of the main aims of this video is to evoke the origins, culture and lifestyle of Italy.  Italy is also highlighted by the La Dolce Vita style of the ad, and a mix of Italian style and fashion icons. Monica Belucci embodies Italian cinema, and both Martini and D&G represent refined Italian style. The scenes of Rome highlight the Italian cultural background of the product even further.

For many brands, especially those with a lot of heritage and strong cultural roots, associations with their home countries can enhance the overall brand image and give it a special zing.  Look at how Dolce and Gabbana stress the importance of Martini Gold being a truly Italian brand:

Diffusion brands vs parent brands

A significant advantage that successful luxury brands have, is that they have a good chance to launch diffision brands. Diffusion brands are a form of a line extension, discussed before.  They are “step-down line extensions of existing  luxury brands, normally less expensive than the  main-line merchandise.” ((How Young Adult Consumers Evaluate Diffusion Brands: Effects of Brand Loyalty and Status Consumption, Ian Phau Edith Cheong , Journal of International Consumer Marketing, 21:109–123, 2009))  They are often called second lines, subbrands and endorsed brands. Think of them as “children” of their more established “parent brands”.

Armani dot com screenshot

Examples of diffusion brands abound in the fashion world, for instance. Armani launched  Armani Exchange, Calvin Klein introduced CK, and Prada started a diffusion brand with a whole new name: Miu Miu. In all of these cases, the important condition for introducing diffusion brands was very high brand loyalty and brand recognition of parent brands. In other words, unless the brand equity of your parent brand is high, it might not be even a good idea to start considering diffusion brand launches.

There are several observations that I want to make in relations to diffusion brands:

  1. By launching a diffusion brand, a parent luxury brand de facto enters a whole new world of new luxury (also referred to as mass luxury and affordable luxury). I wrote on this subject before. New luxury is where many funky or funky-to-be brands develop.  If done properly, the new luxury positioning can bring enormous benefits to both: a child brand and the parent.
  2. Diffusion brands are a good way to target consumers who are usually much younger than the main target market of parent brands. They can tap well into the trend of status consumption, “The motivational process by which individuals strive to improve their status through the conspicuous consumption of consumer products that confer and symbolize status both for the individual and surrounding significant others.” ((Status consumption in consumer behavior: scale development and validation, Eastman, J. K., Goldsmith, R. E., and Flynn, L. R.  Journal of Marketing Theory and Practice. Summer 1999, 41–52.))
  3. Empirical research demonstrates ((Phau, Cheung, Journal of International Consumer Marketing, 21:109–123, 2009)) that diffusion brands have the same quality and status perception among younger target market as parent brands. This is a great way to appeal to a younger audience, and chances are that it will later on develop preferences for the parent brand as well.
  4. Importantly, the success of diffusion brands is often determined by a brand naming strategy. To put it simply, if a child brand bears the name of the parent (like Armani Exchange has a name of the parent brand, Armani), the benefits reaped from the existing status of a parent brand are almost immediate. If, however, a child brand is given a totally new name (Miu Miu vs Prada), such benefits are much less apparent. ((ibid.))

Armani Exchange screenshot

Diffusion brands are not a phenomenon characteristic exclusively for luxury products and services. On the contrary, they frequently occur in a very vast and complex area of brand architecture.

Brand partnerships

Photo by Nelson Cheen on Flickr

Funky brands evolve, they are not static.  In spite of being able to stay true to its authentic values and brand vision, a funky brand is nevertheless able to keep its finger on the pulse of consumers, experiment and surprise them.

BRAND RE-VITALISATION TECHNIQUES

I have already discussed several techniques that brands use in order to stay contemporary and fun.

Line extensions occur when a company “introduces additional items in a given product category under the same brand name, such as new flavours, forms, colours, ingredients or package sizes.” 1.

Example is Starbucks introducing a line of instant coffee, Starbucks Via.

Brand extensions are more radical ways of either capitalizing on the success of your already popular brand, or bringing some fresh air into the otherwise old and tired brand image. A brand extension is “using a successful brand name to launch a new or modified product in a new category.”2

Example: a brand of bananas Chiquita and its new line of fruit juice bars.

BRAND PARTNERSHIPS, OR CO-BRANDING

True to its "schmoozy spirit" (schmoozing is the term I discussed before), SCHMOOZY FOX is fond of brand partnerships.

They can be particularly interesting for you if your brand does not yet plan to launch a whole new product line, or extend into a totally unexplored area.  Then perhaps a brand partnership is something to keep in mind while you are searching for a strategic direction. Brand partnerships are also referred to as co-branding.

A brand partnership is usually a short or medium-term collaboration between two or more brands in order to enhance each other's positioning vis-a-vis the target market.

FASHION AND HOME ACCESSORIES

A recent trend that I've been noticing in the mass luxury (also called new luxury) market is this: fashion brands partner with artists and designers to create home accessories.

Here is a recent example of this trend that I came across in a Dutch magazine (forgot its name :( )

Diesel lamp

This is a lamp that is a result of a brand partnership between Diesel, Foscarini and Moroso.

Another example is a recent partnership between Levis and fashion designer Veronique Branquinho. The suprising result of this partnership is not actually related to fashion at all.   It's .... wall paint that is sold under a slogan Fashion for Walls.

levis_ambiance_1

Watch this space for more examples of brand partnerships.

1) Principles of Marketing, P. Kotler, 2002, p. 478

2) Kotler, Principles of Marketing, 2002, p. 479

Revitalizing tired brands: Chiquita's Fruit Bars

What comes to mind when you think, "Chiquita?" Is this, "bananas?" Lately, Chiquita has extended its brand into fruit bars, based on a franchise model. This short post talks about a Chiquita Fruit Bar spotted in Brussels.

On line extensions and Starbucks Via

Massively criticized, the launch of its first instant coffee by Starbucks might be successful long-term, provided the company chooses its target markets well, and pursues the right pricing strategy in relation to its freshly brewed coffee.