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.
However, what started out as a men?s wear brand, stormed the bastion of the fairer sex in the year 2000 and emerged the top women?s wear brand within a short span of time. At retail, the brand is valued at Rs 225 crore. When the men?s collection was launched in India the base was small and the growth exponential. With the launch of the women?s collection, there was a top line growth of about 30% and the current CAGR of the brand is about 28%.
The company says the reason for these brand extensions was simple. Women were beginning to make their mark in corporate circles, they were moving step in step with men and were increasingly becoming confident, savvy and fashion conscious. While women were changing, there was hardly any choice in the women?s wear market that would help reflect the changing attitude.
Of, course, the market itself has great potential. According to a Technopak study, the apparel market in India is estimated at Rs 1,17,300 crore and growing at CAGR 13%. It is expected to reach Rs 2,17,000 crore by 2012. While the men?s wear market makes up the largest chunk?accounting for 35.5% of the total apparel pie?it is the women?s wear market that is growing the fastest. Currently valued at Rs 37,900 crore, it stands at 32.3% of the total apparel market. (2007 estimates)
Says Satyajit, ?Being the first brand in western wear women?s market was an opportunity as well as a challenge (for Allen Solly). There were no established norms and hence everything including merchandise architecture, distribution network, educating the consumer about the right fits and so on was a first time experience for us.?
All said, it wasn?t all that easy for the brand, well-acquainted as it were with the men?s wear market to pick up the rules that guide women?s wear. For one, though the lifestyle look is getting more and more important in both men?s and women?s wear, in men?s wear it does get compartmentalised into solids, checks and stripes, and the purchase behaviour is more need-based. In women?s wear, it is completely look-led. Women like to mix and match and hence it is important that at the point-of-purchase the brand helps them create an ensemble look complete with accessories.
Men?s wear retail also has the advantage of staple classics which do not change every season?like blue-and-white pinstripe shirts. Women?s wear has no such staples and is ridden with fads.
Given this, both Allen Solly and Van Heusen have kept their ears close to the ground. For instance, Allen Solly undertook a study prior to the launch of the women?s line to get a fix on what works and what doesn?t. The study revealed that women respond to their apparel needs in the following order of preference?fit, price and brand name. Getting the right fit is of utmost importance and unlike men?s wear where a size 42 will fit a big chunk of the population, in women?s wear, size varies widely.
And while the ground rules haven?t changed much, the market has matured.
R Satyajit, COO, Allen Solly, says, ?The consumer has evolved. Today?s consumer is exposed to international trends and therefore she is much more demanding. Also, as the market opens up, more and more international brands will troop in. It definitely puts pressure on the Indian brands to think ahead of competition and continue exciting the consumers.?
Teething troubles notwithstanding, analysts believe Allen Solly has come a long way from being viewed as only an ?office wear? brand to being a complete fashion and lifestyle brand. ?As we move forward, we will raise the fashion quotient of the brand. We are looking to double our retail footprint in India over next couple of years,? adds Satyajit.
As a strategy, Madura Garments has never restricted any of its brands to one segment. For example, Allen Solly, after exploring the men?s and women?s western wear market, is test marketing clothing for kids. Since it is a soft launch and at the experimental stage, the company is not aggressively campaigning for it. Similarly, Peter England, which was a mid-market readymade apparel brand for men, has now launched a retail wing, People, that houses apparels and accessories for kids, young adults, men and women.
The only brand that seems to be sticking to upper-end men?s western wear is Louis Philippe. It was launched in the sixties in the UK and reached the shores of India in 1989. Analysts say that it won?t be a surprise if Louis Philippe also expands the portfolio. What remains to be seen is the category the brand will eventually target and, more importantly, when.