TrustedPeer Blog

What we're thinking about

⬅︎ Back to Blog

Tagged ‘March, 2014’


Ted Judson

Taking Chocolate to the Next Level: A New-Dimension Line Extension

Most product line extensions do not stray far from the original offering. For example, video games are commonly extended into movies, as shown by films like Mortal Kombat and Lara Croft: Tomb Raider. Similarly, television shows regularly prompt board game extensions, like the Simpsons® Monopoly® edition. Even the wildly popular internet video 'What Does the Fox Say?' is now being turned into a children's book! All of these examples are very natural extensions of the original product, because they fall under the general category of entertainment. This kind of closely-related extension is considered same-dimensional.

Rarer are extensions which are new-dimensional, representing a complete transformation into mediums which were not there at the start. A recent example comes from M&Ms®, the beloved chocolate candy, which will soon star in a movie! This is not the first line extension for this iconic brand: they have extended their original chocolate product to everything from pretzel and dark chocolate versions to Easter and mini-sized versions. They have also ventured further afield, making candy dispensers, mugs and even t-shirts celebrating their product. However, these extensions have all been in the food category or in the broader consumer packaged goods (CPG) arena. Their newest product bridges their offering from a food product to an entertainment vehicle.

theatre.jpg

This is not an easy feat, and it did not happen overnight. What first paved the way for this revenue-generating extension was the brand's commercials. Initially, the creative team came up with the idea to anthropomorphize the candies in ads to help sell more chocolate by fueling a sense of connection. One way to do this, they found, was to make the product relatable, by pumping up its personality. This early idea resulted in ads in which different colors of M&M® candies had different personas: fun, mischievous and sometimes cheeky. The life of these personalities continued to evolve in subsequent ads with ongoing storylines for each color of candy. Finally, there had been enough exposure to these ads that the characters had come alive to consumers. With this series of small steps, Mars built up consumer demand for a movie featuring their candies.

But how did the brand know that their characters were ready for the big screen? The key would have been observing how consumers perceived the brand. For example, in focus groups, did consumers talk about liking 'that color' – or did they mention liking 'that guy?' Consumers who thought of M&Ms® as 'guys' were seeing them as peers, for whom certain actions would be in- or out-of-character. This is why an M&M® movie is hitting theaters, but a gummy bear movie is not: you would be hard-pressed to name or assign characteristics to any individual bear. 

New-dimensional product extensions like this are very rare – and have great potential. Though it is difficult to predict how successful the transition will be for M&Ms®, it is an opportunity that not many brands have.

The important question is: will watching M&Ms® on the big screen increase or decrease M&M® sales at the theaters themselves? How will viewers see it: happy convergence or disturbing cannibalism?

If you need consulting on Product Life Cycle Management, contact TrustedPeer Expert Ted Judson.


  More...

Ted Judson

If Not a Line Extension, Then What? Exploring Brand Reinvention.

Every business seeks new revenue, and extensions of a product line are a good bet for driving it. However, as I mentioned in 'Sequel Products:  When Are They a Good Idea?,' extensions are only a good idea in specific circumstances. So, what can you do if your product does not meet any of the criteria for being extended? When a sequel product is not advisable, a brand reinvention may be the right step.

What is the difference between the two?

hockey_team_extension.jpg

  • A line extension is when a new product is added to an existing brand portfolio without changing the brand identity. For example, a hockey team can sell a new style or size of fan jersey. This gives fans a reason to buy something new from the team, without changing the team's name, colors, roster or brand identity.

  • A brand reinvention, on the other hand, is when an existing brand is redefined. This entails altering what consumers think the brand delivers for them. To achieve this, a hockey team would likely change names, trade players, movie cities, or change player behavior – to alter their image in the eyes of fans.

You may wonder why a brand would go through the work of reinventing itself, when they could make the potentially simpler move of producing new offerings under existing branding. After all, building a brand requires significant investments of time and money.

The answer is found in the product life cycle. If a brand is on the decline, management may not agree to fund a line extension. After all, a declining product may indicate a value proposition with decreasing relevance or a target audience with decreasing purchasing power.

However, even though your target or offering have lost relevance, your name may not have. In keeping the branding, you reap several benefits:
  1. You retain the consumer name recognition you worked so hard to build with the original product. Over time, in a successful reinvention, this name comes to mean something different from what it did initially, without having to start from scratch.
  2. You keep the value of the brand name among retailers or distributors. Using the name that they associate with a trusted supplier helps with distribution for your new offering.
clothing_store_rebranding.jpg

What does a successful brand reinvention look like? One example comes from Banana Republic®. This brand was originally a travel-oriented store, supplying books about voyages and excess military clothing store. However, they redefined the brand to be a high-end casual clothing store, allowing them to target a more affluent audience. Though the original store might have conjured the feeling of walking into a safari, the new store experience is more about clean lines and elegance.

If a line extension is not the right move for your brand, consider whether a brand reinvention would be worthwhile. If you have a mature brand with strong name recognition, but a declining product, you could be a good candidate.

If you need consulting on Product Life Cycle Management, contact TrustedPeer Expert Ted Judson.

  More...

Denis Mehigan

Three Resolutions for Better Office Space


whiteoffice.jpeg

No matter the time of year, your business should always resolve to get the best deal when looking for office space.  Here are three ways to ensure just that:

1.  Don’t Fall For the Scarcity Trick:  This is when real estate brokers claim that there are people in line wanting to lease the space your company is looking for.  Or the market is so tight that you won’t find reasonably-priced space.  Don’t let fear force you into overpaying for a space that isn’t right for your company.

2.  Investigate Shadow Space:  In addition to “public market” space, there are often additional offices that can be rented from businesses that have extra space.  A knowledgeable broker can often find space in places that don’t have anything listed officially on the market.

3.  Know Your Load Factor:  The load factor is the fee that landlords charge for the use of common spaces such as lobbies, elevators, restrooms, hallways, etc.  This fee can be anywhere from 15%-30% of your rent, and can drastically affect your bottom line.  Make sure you know what the load factor is and whether it is worth paying for your business.

When searching for office space, it is wise to look into these details to make sure the landlord isn’t overcharging you.  An experienced professional can help guide you in asking the right questions and negotiating a lease that is best for your business.

If you need consulting on Commercial Real Estate, contact TrustedPeer Expert Denis Mehigan.
  More...

Philip Bouchard

How to Build a Special Forces Business Team

Businesses have been discovering good advice in military experience, as this recent LinkedIn article on using time wisely shows.  One of the most important things I learned from my own Navy SEAL training was how to deal with and overcome adversity.  It is a quality that I find crucial in the work I do now helping start-ups and other companies improve and grow.

Here are three lessons I've taken from my Navy SEAL training that can help businesses become more successful:

1.  Develop Resiliency and Nimbleness :  In a Navy SEAL team, all the members develop mental toughness so the team won’t collapse under harsh challenges.  You know your team, have the experience to know what to do, and most importantly, know how to convert the unexpected to your advantage.  In the recent Navy SEAL mission to capture Osama bin Laden, when one of the two helicopters became inoperational, the team adjusted its plan on the fly and executed it successfully.  Today’s successful businesses should be just as nimble, adjusting to new technologies or shifts in the economic terrain.

2.  Choose the Right Expert to Lead :  Each SEAL team member is a specialist. For example, I was trained as a sniper.  My class also had experts in explosives, rear security, weapons, parachuting, and other specialties.  If an operation needed your expertise in front, then you were the de-facto leader of the operation.  Any mission that focused on my expertise meant the team would look to me for leadership.  Similarly, companies should trust the person with the most expertise for the project and empower that person to lead the team.

3.  Augment the Team :  Not every company can have its own in-house SEAL team.  But a business can reach out to specialists to address challenging problems--and that can be a game changer.  If something has gone wrong in any area, be it sales, marketing, manufacturing or production, the right expert can come in and say, “I’ve got this; I’ve been through this many times before. I’m going to help you, and your business will come out better than before.”  Recruiting specialized knowledge on occasion can make a company more responsive to changing markets and ensure the growth of the business.

Navy SEAL teams excel at executing successful missions by undergoing rigorous training to deploy their expertise in real world situations.  I believe that companies of all kinds can benefit by applying these principles to their businesses as well.

Philip Bouchard
CEO – TrustedPeer.com
Former SEAL Team 2
BUD/S Class 99
 
If you need consulting on Business Development, contact TrustedPeer Expert and CEO Philip Bouchard. 
 
  More...
Tags: