Saturday, March 13, 2010

Compare Unknown Brand Extensions

Do you introduce into your merchandise mix brand extensions which are at first unknown to your customers? If you carried Clorox bleach, you might have decided to come on board when Clorox pioneered the market for disinfectant wipes. Customers recognize the brand name. With new products, the supplier is more likely to agree to favorable purchasing terms. And the supplier is likely to devote extra amounts of advertising support to help you sell the product.
     In deciding whether to carry a particular unknown brand extension in your limited shelf space, though, evaluate not only the amount, but also the nature of the advertising support.
     Researchers at Purdue University, Indiana University, and University of Connecticut find that comparative advertising is particularly powerful. But what comparison is used makes a difference: With the disinfectant wipe product category as an example, for follow-on entrants, such as those from Lysol and Mr. Clean, the comparison should be made to the pioneer product—in this case, Clorox disinfectant wipes—rather than to the parent brand—Lysol cleanser, for instance.
     For a pioneer entrant, comparison advertising is still great, but at introduction, the comparison should be made not to other ways of accomplishing the same function—in this case, disinfecting surfaces—but rather to the existing products that carry that brand name—Clorox bleach, for instance. The objective with the pioneer entrant is to show a favorable comparison to parent brand items.
     If the comparison for the pioneer product to the parent brand items doesn’t look favorable to you, there is reason for concern. Other research suggests that if the new product seems to consumers a moderately logical extension of the parent brand, a customer’s negative experience with the unknown brand extension will corrupt the reputation of all products in your store carrying that brand name.

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