Another reason for the rise in line extensions is a company’s natural instinct to copy the competition. This is the way companies think. The competition must know something we don’t know. Let’s do the same thing.
Don’t confuse what makes a brand successful in the short term with what makes a brand successful in the long term. In the short term, a brand needs a unique idea or concept to survive.
It needs to own a word in the mind. But in the long term, the unique idea or concept disappears. All that is left is the difference between your brand name and the brand names of your competitors.
Does quality matter? Absolutely. But where does the concept of quality reside? Quality, or rather the perception of quality, resides in the mind of the buyer. If you want to build a powerful brand, you have to build a powerful perception of quality in the mind.
When you’re first, you can preempt the category. You are the only brand associated with the concept. You have a powerful publicity platform. You need to put your branding dollars behind the concept itself, so the concept will take off, pulling the brand along with it.
According to the law of contraction a brand becomes stronger when you narrow its focus. What happens when you narrow the focus to such a degree that there is no longer any market for the brand? This is potentially the best situation of all. What you have created is the opportunity to introduce a brand-new category.
Customers respond to competition because choice is seen as a major benefit. If there is no choice, customers are suspicious. Maybe the category has some flaws? Maybe the price is too high? Who wants to buy a brand if you don’t have another brand to compare it with?
An important aspect of branding is having a better name. All other factors being equal, the brand with the better name will come out on top. Being a specialist and having a better name go hand in hand. Expanding the brand and being a generalist tend to destroy your ability to select a powerful name.
What happens when competition appears, as it inevitably does? Most category leaders just can’t wait to shift into a brand-building mode. That’s a mistake. Leaders should continue to promote the category, to increase the size of the pie rather than the slice of the pie.
Market share is not based on merit, but on the power of the brand in the mind. In the long run, a brand is not necessarily a higher-quality product, but a higher-quality name. Of course, customers can have too much choice. The more brands, the more flavors, the more varities, the more confusion in the category.
Marketers constantly run branding programs that are in conflict with how people want to perceive their brands. Consumers want brands that are narrow in scope and are distinguishable by a single word, the shorter the better. But marketers, in an effort to distinguish their products from other similar products in the marketplace, launch ridiculously overzealous brand names.