Note to readers: Season-2 of our column Marketing Mocktail breaks down and explains the big ideas, new disruptions and old concepts and marketing practices that matter in the modern age.
When you study the lifecycle of brands, you will discover that most of the multiproduct brands began life as a single product. Over time, they expanded their product portfolio into adjacent or new categories to leverage their equity and create growth.
For example, Dove began life as a soap (or beauty bar) and stayed with that for a long time until it extended the brand into other personal care products like shampoo, conditioner, face wash, body wash, lotion, hair oil, deodorant and recently into the men’s category and baby care.
Today, new D2C brands are straightaway entering the market with a wide portfolio, and they rapidly keep adding new products and categories.
The question is, do brands extend their portfolio randomly, or is there a thought process behind it? What is the basis of extending a brand? Is there an underlying theme?
Analyzing a wide cross section of brands provides the answer. There are five types of brands based on the theme that they use to extend themselves. This theme becomes the common redline for brand extension.
The themes straddle a spectrum from a narrow and focused scope to a broad and diverse one.
The theme chosen by a brand depends on its current core and future ambition. Also, over a period the theme may move from a narrow to a broader scope.
Let us look at these five types of brands, from narrow to broad, with examples.
Product brand
Here the brand does not extend at all and is focused on a single product line.
These brands subscribe to the school of thought that ‘the strength of a brand is inversely proportional to its scope.’
Head & Shoulders anti-dandruff shampoo plays only in the shampoo category.
Intel is only into chips (while they could have easily expanded into PCs).
Heineken is just a beer, and this is the case with almost every alcohol brand which is focused on a particular type of spirit.
Formula brand
These brands extend based on a common formulation or ingredient.
Parachute coconut oil extended its portfolio to other hair care and styling products as well as body lotion, based on its ‘coconut nourishment’ platform. Every Parachute product contains the goodness of coconut oil.
Embedded in Dettol’s range of liquid antiseptic, soap, hand wash, sanitizer, shaving cream and kitchen cleaner is its patented ‘antiseptic formulation’.
Know How brand
In this case the extension is driven by a common area of expertise or knowledge.
Gillette’s range of offerings are built around its expertise in wet shaving and ‘male grooming’.
Himalaya has a diversified portfolio covering personal care, baby care, pharma and nutrition that is created on its knowledge of ‘blending nature with science’.
Interest brand
Brands in this bucket cater to an area of human interest.
A classic example is Disney, which has designed its offerings for ‘family entertainment’- be it theme parks, resorts, cartoons, movies, music, merchandise and OTT platform.
North Face offers a range of adventure apparel, shoes and accessories that are meant for ‘outdoor adventure’. The brand targets climbers, mountaineers, snow sport athletes and endurance athletes to novice explorers in search of adventure.
Philosophy brand
A common philosophy or ideology is what these brands extend on. Offerings in their portfolio are unrelated and diverse.
Virgin is one such brand where the extension into unrelated categories is held together by the philosophy of ‘charismatic irreverence’. This philosophy makes them a ‘cartel buster’ in every category they enter and is largely driven by the persona of its founder Richard Branson.
TATA, the salt to software brand, is bound together by the values of ‘trust, integrity and responsibility’ that people associate the brand with.
The strange case of Patanjali
Patanjali makes for an interesting discussion in this context.
The brand was introduced with Baba Ramdev as its face, across personal care, food & nutrition, and pharma as a ‘Know How’ brand built on the expertise and knowledge of Ayurveda.
However, there was an underlying emotion of ‘Neo-Nationalism (pride of made in India and an anti-MNC sentiment), which the brand exploited as a philosophy.
Thereafter, Patanjali made a foray into apparel with jeans under a sub-brand called ‘Patanjali Paridhan’. While this had nothing to do with Ayurveda, perhaps it was attempting to ride on the philosophy of ‘Neo-Nationalism’.
It did not work! Probably Pantanjali was not able to make the transition from a ‘Know How’ brand to a ‘Philosophy’ brand.
Contrast this with Nike, which began as a ‘Product Brand’ with sports shoes and has now evolved into an ‘Interest Brand’ built around ‘sports and fitness’ with its portfolio of athleisure products.
So, when you are developing your brand portfolio or expanding it, decide on the theme for holding it together. Be clear on how narrow or broad would you like to play?
Anand Narasimha is a corporate turned academician with over three decades of experience spanning Brand Marketing, Advertising, Consulting, and Teaching. He writes the column Marketing Mocktail for Storyboard18. Views expressed are personal.