November 1, 2007
Cross-Breeding: A Novel Look at Line Extensions
By Tom Ryan
 |
| The Nike+ iPod Sport Kit, www.apple.com |
While overextending a brand across categories is often seen as a universal ‘no no’, two marketing professors believe companies should be actively seeking to extend brands into dissimilar or even highly remote product categories. Classic examples of this “cross breeding” are the sofa-bed, fax-phone, and fridge-freezer, but technological advancements are opening up more combos such as the cell phone/camera as well as the Nike+ iPod running shoe.
Writing in The Wall Street Journal, Michael Gibbert, from Bocconi University in Milan, and David Mazursky, from Hebrew University in Jerusalem, said brand managers don’t typically explore such combinations based on the belief that companies should stay within established product lines to avoid diluting a brand’s identity.
The problem, according to the professors, is that the “don’t overextend mindset” often leads to “inbreeding.” In these cases, features of one product are combined with those of a related product to an excessive degree. An example would be cell phones, organizers and computers all clumsily sharing each other’s features.
“Since they believe that each additional feature represents a point of differentiation from the competition, managers find it hard to step off this never-ending treadmill,” the professors wrote. “Paradoxically, in an attempt to not overextend the product line, managers overextend the product’s features, leading to ‘feature glut’ and reduced usability for consumers.”
On the other side, cross-breeds “can revolutionize their parent categories and can even create new categories.”
Other examples of recent cross-breeds include a radio toaster, a fridge-TV, a pocket knife with a USB storage drive, and a cell phone with a built-in glucose meter for diabetics.
In coming up with these hybrid combinations, the professors believe brand managers should probe a few key questions:
- What other main product is involved in your product’s usage, and how can
the two can be beneficially combined? - How might a critical function in one product serve a modified purpose when
linked to another product? - How can we create links and dependencies between functions of two remote
products where before there were none?
For example, Nike+ iPod had an obvious linkage since people like running with their iPods. But when hooked to a Nike+ running shoe, the iPod nano screen, which normally displayed music information, displays the distance, pace, and calories burned. Results can be synched back to a computer to track progress. Users can also download playlists tailored to their run, and even click a “power song,” a personal favorite that can help summon up a burst of energy.
Discussion Question: Do you agree that a “don’t overextend mindset” is causing branding managers to miss “cross breeding” opportunities? Is this an opportunity for a large number of products or a select few? What are some essential guidelines in determining whether a hybrid combination might work or is indeed overextending?
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Brand managers are often risk averse, not innovation-driven. Often they’re motivated to keep their jobs, not incentivized to try multiple risk strategies, assuming that 1 success will more than pay for several failures. All too often market research is based on tiny, subtle changes, not significant innovation. A book publisher and a movie company expect 95% failure, knowing that the home run successes will make the business profitable anyway.
Example: look at all the multigeneration huge coffee brands (Nescafe, Maxwell House, Folger’s, etc.) All of them ignored the growth of Starbucks for at least a decade. How much money would it have taken any one of them to copy or buy out Starbucks in 1990? But the brand managers were busy changing the shape of the jar, redesigning the label, and wondering whether to hire another spokesperson.
I think the brand alliance terminology is more true than the concept of brand over-extending. Brand managers who are compensated by making the quarter are not going to drive this type of innovation for the most part. This type of innovation sometimes comes more often from consumers who will help you meet a need or a want they have. Listen and learn from them at all levels.
Moreover, even non-brand insiders and agencies can brainstorm ideas for innovation, if allowed. It would be nice if more companies would set up some time every quarter for a facilitated innovation day, just to allow more folks to be together in an energized environment to “build” ideas in tandem without judgment.
On this one, my thoughts drifted immediately to recent successes in private label, with upscale goods in particular. The brand identity of Kirkland Signature, to cite just one example, translates well across many categories. Also, when Costco began co-branding with major brand names a few years ago, some said the sky would fall. It didn’t. There’s room for a lot more creativity out there. Mark is right about product managers thinking more about job safety than risking true innovation.
There are some spectacular examples of cross breeding these days. Unfortunately few if any take place in the food industry. The best I’ve come across is the use of Bluetooth wireless technology to pretty much create a new industry called “telemedicine” where results of blood tests and other diagnostics can be instantly transmitted to any lab, doctor’s office or operating room in the world. Exciting stuff.
I think there are excellent opportunities for manufacturers and retailers to get together on cross breeding without going too far. Why not greater efforts to market cookware, cookbooks or DVDs with food? We’re probably talking more about cross merchandising here than cross breeding, but I think the two are interconnected.
I’m not quite clear on the professors’ premise. In the Nike/iPod example, both brands retained their identity. Nike didn’t try to become an entertainment device and iPod didn’t try to become a shoe. That’s not over-extending your brand, that is a brand alliance.
All of the other examples given are of implements and appliances that have added functionality, but there is no indication of branding. Are they co-branded? I don’t recall seeing any Nokia/Nikon branded camera phones? So did Nokia overextend the brand by adding a camera to the cell phone?
Cross breeding is a worthwhile approach for an amalgam of practical consumer electronics, but it’s almost always a misguided idea for other types of items. In fact, some studies indicate that consumers perceive many cross breeds as confusing, and even frustrating, because it’s too much on too little.
When you cross a donkey with a horse you get a mule. While the animal is useful it can’t reproduce.
Cross-promotion activities do exist but generally are carefully controlled and last for a specific time period. Cross-breeding products themselves involves having to coordinate product development with another company and most companies are unwilling to have to relinquish control by coordinating with another company. By not having control over what the other company does, any negative publicity that the other company generated would carry over to your company’s product.
The economics of retailing are very different from that of manufacturing, meaning that it makes more sense to manufacture cross bred products than it does to market them. However, the growing significance of online marketing will make adventures in hybrid manufacturing less risky. And the eventual migration of bricks and mortar retailing to more rational management of the long tail may provide additional impetus to hybrid or cross identity products.
The concept of brand cross breeding as defined by these professors strikes me as lacking a focus on the consumer. Some of the examples cited seem more focused on product features than customer benefits. This is always a dangerous position for marketers. Leveraging a brand into complimentary categories is always a tricky thing. The strongest, most enduring brands invariably keep their eye on the things their customers think they do exceptionally well, and leverage that, rather than on what they themselves think they might be able to do well.
The article is right on. However, the authors should be mindful of the inhibitions of brand managers who invest in what is now call third space, where effectiveness and information are asset building brand value through some rather ambiguous financialization. Also branding is a defense when advertising and product innovation is declining.
The answer is for the branders to get with the consumer. Branding is valuable when products can be easily incorporated into one’s life. The merging of difference is preferable to similarities in our present culture.
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Brand managers are often risk averse, not innovation-driven. Often they’re motivated to keep their jobs, not incentivized to try multiple risk strategies, assuming that 1 success will more than pay for several failures. All too often market research is based on tiny, subtle changes, not significant innovation. A book publisher and a movie company expect 95% failure, knowing that the home run successes will make the business profitable anyway.
Example: look at all the multigeneration huge coffee brands (Nescafe, Maxwell House, Folger’s, etc.) All of them ignored the growth of Starbucks for at least a decade. How much money would it have taken any one of them to copy or buy out Starbucks in 1990? But the brand managers were busy changing the shape of the jar, redesigning the label, and wondering whether to hire another spokesperson.
I think the brand alliance terminology is more true than the concept of brand over-extending. Brand managers who are compensated by making the quarter are not going to drive this type of innovation for the most part. This type of innovation sometimes comes more often from consumers who will help you meet a need or a want they have. Listen and learn from them at all levels.
Moreover, even non-brand insiders and agencies can brainstorm ideas for innovation, if allowed. It would be nice if more companies would set up some time every quarter for a facilitated innovation day, just to allow more folks to be together in an energized environment to “build” ideas in tandem without judgment.
On this one, my thoughts drifted immediately to recent successes in private label, with upscale goods in particular. The brand identity of Kirkland Signature, to cite just one example, translates well across many categories. Also, when Costco began co-branding with major brand names a few years ago, some said the sky would fall. It didn’t. There’s room for a lot more creativity out there. Mark is right about product managers thinking more about job safety than risking true innovation.
There are some spectacular examples of cross breeding these days. Unfortunately few if any take place in the food industry. The best I’ve come across is the use of Bluetooth wireless technology to pretty much create a new industry called “telemedicine” where results of blood tests and other diagnostics can be instantly transmitted to any lab, doctor’s office or operating room in the world. Exciting stuff.
I think there are excellent opportunities for manufacturers and retailers to get together on cross breeding without going too far. Why not greater efforts to market cookware, cookbooks or DVDs with food? We’re probably talking more about cross merchandising here than cross breeding, but I think the two are interconnected.
I’m not quite clear on the professors’ premise. In the Nike/iPod example, both brands retained their identity. Nike didn’t try to become an entertainment device and iPod didn’t try to become a shoe. That’s not over-extending your brand, that is a brand alliance.
All of the other examples given are of implements and appliances that have added functionality, but there is no indication of branding. Are they co-branded? I don’t recall seeing any Nokia/Nikon branded camera phones? So did Nokia overextend the brand by adding a camera to the cell phone?
Cross breeding is a worthwhile approach for an amalgam of practical consumer electronics, but it’s almost always a misguided idea for other types of items. In fact, some studies indicate that consumers perceive many cross breeds as confusing, and even frustrating, because it’s too much on too little.
When you cross a donkey with a horse you get a mule. While the animal is useful it can’t reproduce.
Cross-promotion activities do exist but generally are carefully controlled and last for a specific time period. Cross-breeding products themselves involves having to coordinate product development with another company and most companies are unwilling to have to relinquish control by coordinating with another company. By not having control over what the other company does, any negative publicity that the other company generated would carry over to your company’s product.
The economics of retailing are very different from that of manufacturing, meaning that it makes more sense to manufacture cross bred products than it does to market them. However, the growing significance of online marketing will make adventures in hybrid manufacturing less risky. And the eventual migration of bricks and mortar retailing to more rational management of the long tail may provide additional impetus to hybrid or cross identity products.
The concept of brand cross breeding as defined by these professors strikes me as lacking a focus on the consumer. Some of the examples cited seem more focused on product features than customer benefits. This is always a dangerous position for marketers. Leveraging a brand into complimentary categories is always a tricky thing. The strongest, most enduring brands invariably keep their eye on the things their customers think they do exceptionally well, and leverage that, rather than on what they themselves think they might be able to do well.
The article is right on. However, the authors should be mindful of the inhibitions of brand managers who invest in what is now call third space, where effectiveness and information are asset building brand value through some rather ambiguous financialization. Also branding is a defense when advertising and product innovation is declining.
The answer is for the branders to get with the consumer. Branding is valuable when products can be easily incorporated into one’s life. The merging of difference is preferable to similarities in our present culture.