Agent Of Change

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: When Olay, a division of Procter & Gamble, joined hands with Pharmavite to extend the Olay brand, known for its face creams, to vitamins, analysts had a potential head-scratcher: will anyone actually want to put Oil of Olay in her mouth? But the company had done its homework. It understood that Olay’s core values are about beauty and that its customers see this as well. So it went ahead and marketed the vitamin as a beauty product, rather than as a health pill, and plonked it in the vitamin aisle of food, mass-market and club stores. And guess what, customers didn’t find the extension in the least bit jarring.

Of course, the temptation to stretch is irresistible. Companies need to grow, and in the short term, most brand extensions offer quick returns. In the long term, however, extensions can leave customers thoroughly baffled and create what experts call a doom loop. (Read the book extract on Page 2 of BrandWagon to get some pointers on the likely pitfalls and how to get past them.) “When you are looking to extend your brand, you should look to extend the core of the brand, what the brand essentially stands for,” says Shital Mehta, chief operating officer, Van Heusen, at Madura Garments.

Mehta would know. By sticking to this simple principle, Van Heusen, which began its career in India as an everyday couture brand for men, forayed into women’s wear, bolstering the brand’s franchise in the process.

At retail, Van Heusen is valued around Rs 350 crore with a compounded annual growth rate (CAGR) of 42%. Prior to the launch of the women’s collection, the brand grew at 25-30%. “With Van Heusen Woman, we extended the parent brand’s promise of ‘contemporary class’ to the sub-brand despite catering to an entirely new target audience,” points out Mehta. “A key consideration in any brand extension is whether what the parent brand stands for is relevant to the new target audience or market,” he adds.

The other brand from the Madura Garments stable, which made a similar transition—again quite successfully—is Allen Solly. Launched in 1993 in India, Allen Solly was positioned as an “anti-establishment” brand. It trashed the whites and the greys and gave the corporate world a colourful and vibrant makeover with its Friday Dressing positioning.