Hitch Your Wagon to the Right Star

Bloomberg Businessweek reports that P&G is franchising dry cleaners and car washes. There are already three Tide Dry Cleaners stores and nine Mr. Clean Car Wash operations.
     Whether you’d find it profitable to participate depends on a number of business fundamentals. What are the franchise fees? Would this be a product/trademark franchise, like a Toyota dealership in which you’re paying principally for the name? Or is it a business format franchise, like a McDonald’s in which you’re paying for help with site location, quality control, accounting systems, and other aspects of the business?
     From a consumer psychology perspective, there are other considerations. That’s because what P&G is doing is as much a brand extension as a franchise opportunity. Tide Laundry Detergent washes clothes. Dry cleaning is a natural extension, but still an extension. It’s like McDonald’s marketing a line of children’s toys. The Mr. Clean Autodry Car Wash System is already on the market. For those who know about it, the extension to a car wash service is a natural.
     Here are some more questions to ask when deciding whether to brand or co-brand with a well-known name:

• Do your target consumers associate more strongly with Eastern or Western cultures? Research at University of Texas and University of Minnesota indicates that consumers who associate with the holistic thinking of India would be more likely to accept a McDonald’s shaver shop than would consumers who associate with the analytic thinking of the U.S.
• Are there already well-known brands in that business sector? Research at Purdue University, Indiana University, and University of Connecticut suggests that brand extensions are especially likely to succeed in sectors such as dry cleaning and car washes because there aren’t dominant store or operations brands. The research findings also suggest that a Tide Dry Cleaners is more likely to succeed if it opens up its doors with that name than if it changes its name from, let’s say, Don’s Dry Cleaning.
• Is there either brand fit or product fit? Researchers at Indiana University find there are two paths to success. An example of brand fit is a Nike orthopedic supplies store, based on Nike’s athletic persona. An example of product fit is a Nike audio equipment store, based on Nike’s identification with audio equipment for runners.

For your profitability: Sell Well: What Really Moves Your Shoppers

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