Tuesday, November 8, 2005

Brand Bifurcation

The level of line extension in consumer goods these days is just out of control.

Line extension (i.e. "ChunkyCake is very successful - let's do Diet ChunkyCake for fat people and those that fear becoming them, and ExtremeChunkyCake for Extreme People(tm)") has it's place. It can let you take a particular brand in one segment and either further tap that segment or tap into a new segment.

However, taken too far, you just start confusing people and cannibalizing your own market share. Cases in point from the grocery store run this evening:

  • My wife asked me to get some "Trader Joe Organic Crushed Wheat Sourdough Bread". Then I almost bought - I am not kidding you - "Trader Joe Organic Cracked Wheat Sourdough Bread". PULLLEEEZZZ! Is it not enough that my bread can be made with sourdough or not, wheat or not, organic or not, and be associated with a particular manufacturer? Now I have to worry about what method was used to render the grain itself into submission?!?
  • Attention Coca-cola corporation. WHAT THE HELL ARE YOU DOING!?!? There is coke and diet coke. Regular and C2Variations of diet and non- with vanilla, lemon, lime, or cherry. There is diet coke, 'zero', and diet coke with Splenda-brand sweetener, because now the diet category is being further subdivided into three groups. Crazy enough?! Wait, there's more! There's caffeine free permutations of many of those brands! I went to the cocacola.com web site and counted 14 variations on their "brand fact sheet" (hint - if you need one, you have a problem!). Now, the soft drink (that's what we call them in Canada) market is GIGANTIC, so maybe this is a feasible number of derivatives to sustain, but as a consumer, I'm confused. Maybe I'll just go have a Mr Pibb (which will suit CC just fine, since they own that brand too).

Anyhow. Rant over, but perhaps there's a lesson to be learned here for our industry? Sims folk, take heed!

1 comment:

adam lake said...

i was actually going to post awhile ago when coke announced the new c2 brand. basically, i am a customer, and i am completely confused by all thier various coke brands. i can't tell what is sugar free, what has twice the caffiene (c2???), what is caffeine free, etc. its a total mess with a naming convention to match.

as an investor i would question purchasing a company with such a chaotic strategy in their core franchise, as a consumer i don't know what satisfies my desire for a non-artificially flavored but coke tasting beverage. pepsi free? but is this sugar free or caffeine free. agh!