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Wednesday, September 2, 2009

How Can a Mega Brand Equal a Mega Success?


CI SUMMARY: Megabranding can be an effective strategy for marketers to drive growth and efficiency from power brands across related product categories under the right conditions. Executing the strategy successfully involves careful understanding of the brand’s specific equity and leveraging it for competitive advantage with robust marketing support.
By: Rob Mooth, Vice President, BASES Client Consulting and Mike Asche, Vice President, BASES Client Consulting, The Nielsen Company

Do more with less—the mantra being echoed in both businesses and homes. In today’s retail marketplace, increased fragmentation, shrinking store footprints, rising commodity costs, and stretched consumers are creating unique pressures on branded products. As marketers create business plans to address these issues, many also are attempting to produce greater efficiency from fewer brands. This gives rise to the notion of “megabranding” as a way to economize costs and grow broader, stronger franchises that are more resilient to these forces.


Cross-over consumption
Megabranding is when a brandmark is applied across multiple product extensions and flankers that satisfy a variety of consumer needs across different categories. For example, Clorox is considered a megabrand because the broad use of the brand stretches across laundry, home cleaning/disinfecting and small durables. On the other hand, while Coca-Cola is a global powerhouse brand, it has predominant representation in the carbonated soft drinks category alone.



Good practice
Marketers are considering megabrand strategies to increase marketing and operational efficiency across a number of potential fronts: 
  • Media—spots that support multiple complementary items under an umbrella strategy deliver a greater return on investment 
  • Copy development—reducing the number of creative executions presents a savings opportunity 
  • Trade line promotion—folding multiple products into more impactful trade promotions result in improved efficiency and compliance 
  • Consumer promotion—bundling can improve efficiency and breakthrough 
  • Leverage transaction size vs. penetration—it is easier to get a brand’s current consumers to buy more than to gain the same volume from a new buyer
Sustainable competitive advantage
While operational efficiencies are vital, the consumer issues related to megabranding are just as important. The first step to crafting a winning megabrand strategy and creating sustainable competitive advantage is understanding the brand’s unique equity. Misreading the brand’s meaning is the biggest strategic error in megabranding. Brands that fail to meaningfully connect with consumers as they migrate into new categories can lead to disastrous outcomes. We believe Gatorade’s failed 2001 attempt to extend into meal bars is a good example of misread equity. In consumers’ minds, Gatorade likely represented “hydration” rather than “nutrition” or “performance” and did not form a solid link to the meal-bar category.


Most brands lack distinctive, specific perceptions and do not differentiate on the basis of unique attributes or associations. Brands may be well known and have generally positive overall perceptions relative to competitors, but these more general perceptions are usually not a sufficient strategic rationale for cross-category extension. For this reason, many brands do not have a strong opportunity for generating competitive advantage from megabranding.


The basic foundation of successful megabranding starts with identifying a unique and ownable equity for the brand. Executing the strategy successfully involves understanding how the brand’s unique equity can be relevant and leveraged for a competitive advantage.


Unique relevance
Brands produce value for consumers in a variety of ways. First, strong brands help to establish credibility with the customer. Well-known brands can do this if the brand’s equity is relevant to the destination category. At a higher level, impactful megabranding strategies leverage perceptions that are specific to the brand in a way that enhances consumer value.


Successful megabrands are built on a foundation of “unique relevance”—identifying a consumer benefit that can be transferred to build competitive advantage in another category. Beyond being well-known, the equity must bring a unique benefit to the destination category. Three case studies illustrate the point: 
  • Special K snack bars introduced in 2002 were a major success. Although the meal-bar category was well-populated, Special K’s unique value proposition of health and weight management benefits was a great fit with the lifestyle of the brand’s target. 
  • Crest’s successful entry in 2001 into home whitening kits was aided by its strong equity and clinical angle. While other oral care brands also have strengths, we believe few could have developed this new category as effectively. 
  • Olay’s entry into cosmetics in 1999 failed. While Olay is a strong brand with many successful extensions in skin care, its equity brought nothing uniquely relevant to the competitive cosmetics category.
Persuasive actions
When marketers seek viable options for exporting a megabrand into an adjacency, rarely do they find opportunities to improve delivery on current primary consumer needs. Instead, destinations for megabrand equities often call for “activating” a secondary consumer need. That is, elevating the role of a less critical need to a more influential role on consumer purchasing decisions. Successful megabranding often is the result of activating needs that were less influential because no brand was currently focused on that need. Brands that succeed have a strong core strategy and a sizeable marketing investment to energize this shift in consumer thinking and behavior.


Clorox capitalized on the sustainability trend when it activated the eco-friendly driver in home cleaning with its 2008 introduction of Green Works. Being the first mainstream brand to get a substantial portion of the market to think differently, Green Works generated significantly higher volume than the leader in this segment and helped grow the environmental cleaning category 40% in its first year.


Credibility carries clout
Big names carry weight and can also do wonders when introduced into underdeveloped markets and segments just by lending credibility to the mix. For example, the fledgling brand Clean Shower was slowly building the daily shower cleaner category in the late 1990s when Tilex, Scrubbing Bubbles and Lysol entered the fray, which instantly legitimized the category for consumers and volume responded. While the expected return from this basic strategy may be modest, it can be executed quicker and with less risk.


Brands with strong sales are good potential candidates for extension and megabranding, but this is not necessarily the most critical factor. A strong and specific equity may be the more important issue for creating a megabrand platform. The key is to find the specific equity and how it is relevant and transferable to a different category. 


Sometimes big brands do not have the flexibility for megabranding, but smaller brands might.
For example, Mr. Clean was a relatively small brand in the U.S. through 2002, selling dilutable cleaners with a 10% share of the market. But the brand had broad awareness and recognition, a strong cleaning equity, and an iconic visual equity. When Procter & Gamble launched Mr. Clean Magic Eraser in 2003, it leveraged its equity to establish credibility for this novel product.


Invest for growth
The fact is, megabranding programs are typically only as effective as their marketing support. Most marketers do not employ megabranding as just an efficiency play. Rather, they view it as an opportunity to grow volume and share. While there is no single support strategy that fits all cases, it is clear that most marketers have devoted substantial marketing support to capitalize on megabranding initiatives.


As support is allocated, we believe in most cases that dedicated support for the adjacent extension is important. There is a logical attraction to brand-family communication strategies given the potential for marketing efficiencies. However, most successful megabrand strategies that we have examined do not place great weight on family messaging. In most cases, a critical need exists to educate and convince consumers about the megabrand’s relevance in the adjacency. Family messaging may play a role later in the megabrand’s evolution, but in the introductory time period, more focused support should usually be the priority.

Occasionally, a megabrand strategy is implemented as a swapout of an existing equity for a megabrand. In this case, a co-branded approach is wise. A timely example exists in dish care, where Reckitt-Benckiser is replacing Jet-Dry for the Finish brand on its rinse aids, and also converting its Electrasol detergent to the Finish franchise. As the Finish branding is implemented, there is a visible co-branding for at least an introductory period and a healthy level of media support for the megabrand. This approach provides clarity for Jet Dry and Electrasol consumers.


Distinct direction
Megabranding can be a successful strategy for generating marketing and operational efficiencies as well as overall brand growth; however, to realize these advantages, the strategy must be carefully navigated. A successful strategy requires that the manufacturer clearly understands what the brand represents in consumers’ minds and makes the right choices on how the brand’s unique equity can be relevant to the category and leveraged for a competitive advantage.


Successful megabranding also requires a commitment to support the brand as it works to extend itself into new categories. When a manufacturer can identify the right equity, leverage it in a relevant category in a meaningful way, and vigorously support the initiative, the ingredients are in place to turn a megabranding strategy into a megasuccess.
Read more about how to turn a megabrand into a megasuccess in Nielsen’s recent report.


There are couple of ways to classify brands. One may specify the annual sales to name a billion-dollar club, others may call it mega brands for the application of certain brandmark across multiple categories. While the benefit of having valuable brands is unquestionable, it's interesting to discuss what to consider to stretch a brand or introducing a new one for different category, ie. how far can we stretch the brand?

The new venture needs to borrow from and pay dividend to the parent brand's equity, that means it shouldn't change the current brand meaning and consumers can link its relevance to how it currently stands in the heart & mind, even make it stronger.

Five practices for global brand success

By Nigel Hollis, The Global Brand, author.


A strong, scalable business model is a major advantage for multinational companies (MNCs).
In addition, these companies typically have:
  • An extraordinary depth of management talent that allows them to out-think the competition and survive changes in leadership.
  • The best advice from their global media, advertising and research agencies.
  • Global Research and Development capabilities that provide a constant stream of innovation and can readily adapt existing products and services to meet new market needs.
  • An understanding of what is likely to work in a new market based on experience elsewhere.
  • Big marketing budgets with which to establish their brands. If their first attempt to enter a market fails, they have the resources to try again, using research to understand where they went wrong and how they might do better.
MNC brands can succeed at disrupting the status quo in a new market by following five steps:
  • Adapting products and services to meet local needs and tastes
  • Solving the local value equation through product and pricing strategies
  • Creating a strong presence and a distinctive identity
  • Adopting more aggressive point-of-purchase tactics
  • Getting as close to the local culture as is possible
The Global Brand discusses these steps in more detail before going on to consider general practices that will help grow a successful global brand.
One of the biggest challenges faced by global marketers is how best to communicate across countries and cultures.

Message from the author: Strong global brands are built upon local market winnings. The cummulative local leadership gained by being the best in each unique market it exists is the foundation to establish scale that will halp the birth of next billion dollar brands. Success is build one step at a time, preserverance and consistency are key ingredients. Being grown by MNC is great advantage, but great men behind the gun are the real deal.