The Line Extension Trap

Brand Extension is a multi-product branding strategy through which an organisation introduces new products with the name of an already established brand name. The objective is to leverage on the name recognition of the established brand to improve familiarity of the new product driving sales.

Al Ries and Jack Trout in their book; 22 Immutable Laws of Marketing described this as the Line-Extension Trap no. 12. Whereby an organisation takes the name of an established product and uses it on a new one essentially the free ride trap.

Blue band is a well-established brand in Kenya with over 65 years under Unilever Umbrella producing margarine spreads and was recently acquired by Upfield. Upfield has a great history with its predecessor beginning in 1871 when its patent for making plant based spreads was acquired from its inventor Hippolyte Mège-Mouriès by Antoon Jurgens United to form Margarine Unie which went ahead to merge with the Lever brothers in 1931 forming the giant Unilever. The company was spun off from Unilever and purchased by the KKR & Co. Inc. (Kohlberg Kravis Roberts & Co.) and re-launched as ‘Upfield’

According to Al Ries and Jack Trout logic is in the Line Extension but Truth is not. This is a typical hard headed case of Inside-Out thinking which goes like this: Blue band has the biggest share of the margarine market, customers love our margarine spread and they will expect us to make high quality peanut butter, mayonnaise and canola oil.

This inside out thinking seems to favour the Line Extension strategy since it aims to leverage on the already existing strong brand equity to drive up demand and sales of a similarly branded new product. But let’s evaluate this from the Outside-In. Successful brands usually occupy very strong positions in the prospects minds, a position so strong the brand names become surrogate or substitute for the generic name, in this case ‘Blue Band’ becomes the substitute for ‘Margarine’. This is the ultimate goal for brand managers.

With this knowledge let’s evaluate the short term and long term effects of the Blue Band Line Extension strategy. In the short run; with the support of marketing communication Upfield’s new products (Blue Band peanut butter, canola oil and mayonnaise) will ride on the strong brand equity of the name ‘Blue Band’ with customers expecting the product to be of high quality similar to the Blue Band margarine. In the long run however; the brand extension will educate prospects that ‘Blue Band’ is only a brand name in the margarine category which has other significant players like Prestige and Gold Band.

According to Ries and Trout, ‘the name is like the point of a knife. It opens up the mind to let the message penetrate. With the right name, the product fills the creneau (time slot/opportunity) and stays there’, ‘but when the tables are turned (brand name extended), the name makes no sense because the mind of the prospect is organized differently. The prospect thinks in terms of products’. Blue band successfully positioned itself as the Leader in the Margarine category, with its name becoming synonymous with margarine, why would it go ahead and dilute this position by educating its customers that it is only a brand and other products exist in the category.

The brand extension has other effects to the organisation for it is now spreading itself too thin in the consumer’s minds. The name now competes in the several other categories with established and formidable competitors like Kraft-Heinz and Bidco’s Vegetable Oils. How will this pan out in the end?