Wonderful cartoon from “marketoonist” Tom Fishburne to kick off 2012…
“Product proliferation” or “line extension” is one of the biggest mistakes made in the conventional marketing arena…
…and there are useful lessons for direct response marketers.
Line extension sounds such as sensible and logical strategy.
The justification is usually along the lines…
1. It’s a way to leverage current brand equity
2. It’s a way to more closely meet the needs of consumers (in effect, a way to effect a niching strategy)
3. By offering greater choice it will boost overall sales
4. By offering new products it will maintain interest in the brand and improve customer retention
As I said, it all sounds completely logical and it can improve results…
…in the short term..
Line extension has a couple of BIG problems…
…that almost always mean it’s a mistake.
Problem #1 – Focus Is Diluted
The most successful businesses and brands tend to be those that are highly focused. Customers have a very clear idea of what’s on offer.
This idea has been expressed in different ways from the idea of the” Unique Selling Proposition”…
…to the concept of “Positioning” developed by Al Ries and Jack Trout in the seminal marketing book “Positioning: The Battle For Your Mind”.
In a nutshell, Ries and Trout proposed that each brand can only hold ONE position in the mind of the consumer.
So, for example, Volvo used to own the position of “safety” in the car market.
The problem with line extension is that the company or brand loses focus.
The Harvard Business Review published a study on line extension (see page 19 of the book “Repositioning” by Jack Trout). Its observations were that line extension weakened a brand’s image and disturbed trade relations.
Other studies have shown that line extensions perform worse that new brand names, undercutting the leveraging brand equity argument.
More about the problems of line extension can be found in “Focus” by Al Ries, “Big Brands, Big Trouble” by Jack Trout and this post from Laura Ries…
Problem #2 – Cluttered Store Shelfs
Back to Tom’s cartoon and post…
Despite the evidence that line extension is a poor strategy, companies continue to launch waves of new products that are little-different to existing lines.
The result is competition for shelf space and the transfer of power to retailers…
…who have increasingly exploited that power by demanded fees and other concessions.
Even worse, this product proliferation can confuse consumers…
…a remember “a confused mind doesn’t buy”.
Direct response marketers don’t have money to waste…
…and in tough times I suspect big corporates won’t either.
Stay tightly focused and be very clear on what you’re offering your clients.