A real-life scenario: Sales are stagnant. Members of your sales staff are passing the time surfing the web waiting for incoming orders. Your advertising is long-in-the tooth and short on results. The media is not writing about you.
It’s an all too familiar story in a mercurial global market that has only one predictable characteristic: unpredictability.
Under these conditions, many companies will look for alternative strategies to spark sales and interest. And more often than not, rather than focusing on innovation — new ideas and new products — companies will look to the marketing team for “spin.” The challenge: “How can we put a new coat of paint on this old product?”
What Happens When You Don’t Focus?
This “new coat of paint” approach generally results in dilution of brand equity, something that is difficult to recapture once it’s lost. Many times, rather than investing in innovation, companies will take the shortcut to introducing a new product by focusing on a line extension approach. A line extension takes the existing qualities of a brand or product and looks to expand that equity into what appears to be a new product or service. The results are often marketplace confusion accompanied by a drop in sales.
Example: I was in a restaurant recently with a self-serve soft drink dispenser. When I went to select and pour my drink, I was overwhelmed at the choices. The range of choices was paralyzing. First, select from a range of categories: Soda, Diet Soda, Caffeine-Free Soda, Juice, Water … the list seemed endless. I selected Diet Soda (wanting a Sprite), and after selecting “Sprite” saw a wide range of line extension choices. Who knew that Sprite now came in many different flavors: Cherry Sprite, Grape Sprite, Orange Sprite, Lemon Sprite, etc. What happened to Sprite as the leading lemon-lime soft drink? How would a lemon-lime flavored grape soda taste? Confused, I backed out of the menu and chose sparkling water.
“Line extension names are forgettable because they have no independent position in the mind,” say authors Ries and Trout in the classic marketing book, “Positioning.” “They are satellites to the original brand name. Their only contribution is to blur the position occupied by the original name. Often with catastrophic results.”
WD-40: A Well Oiled Machine
Recently, in a story in the LA Times, Garry Ridge, CEO of venerable brand WD-40 addressed his company’s philosophy on expansion and line extensions. According to the article, “WD-40s stock keeps rising in lockstep with its sales. While the benchmark Standard & Poor’s 500 index has gained about 70% in the last 10 years, WD-40’s stock is up more than 200%. Sales totaled $383 million in its fiscal year ended last August. The company also makes 3-In-One oil, Lava soap and other products, but WD-40 remains its dominant brand.”
LA Times: “The world and technology change so rapidly, but WD-40 seems to do well by mostly sticking to its knitting. True?”
Ridge: “Focus is so important. You have to know what you understand and what you don’t understand. A lot of companies like to diversify but we call it “de-worsify,” where you keep looking for that shiny new penny because what we’re doing sometimes gets boring. We’ve doubled our business in the last 10 years and we know we can double it again in the next 10. All it takes is focus.”
There it is. Put about as simply as it can be from the leader of a successful global brand: “…All it takes is focus.”
In summary, marketing success is not about spin, a new coat of paint or line extensions. It’s about developing a solid marketing plan, based on research (not gut feeling); one with specific actions that you and your team can follow with keen focus; staying on course with primary objectives, veering from the goals set only after market and/or customer intelligence tells you to do so.
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Bill Threlkeld is the president of Threlkeld Communications, a marketing communications and public relations firm that helps businesses develop the right marketing strategies to grow their businesses and meet financial goals. He can be reached at email@example.com