Sunday, January 14, 2001
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Posted on: Sunday, January 14, 2001

Old brands learn new tricks as marketers take fewer risks

USA Today

Green ketchup. Rectangular bagels. Portable adult yogurt.

Product satires on "Saturday Night Live" or wacky rejects from R&D? Neither. They’re the latest brand extensions from top consumer product marketers.

Rollouts of totally new products have fallen three consecutive years and are at the lowest level since the early 1990s, according to industry tracker New Products News. No one’s running out of ideas. It’s just that with the rate of new-product failures approaching those of Internet start-ups, marketers under intense competitive pressure and stiff financial scrutiny by Wall Street are taking fewer risks.

So while there have been fewer new products, such as Procter & Gamble’s Dryel for cleaning dry-clean-only apparel at home, consumers are seeing far more varieties and tweakings of existing brands, such as H.J. Heinz’s green EZ Squirt ketchup.

To be sure, classic brand extensions remain popular. Marketers are still trying to squeeze existing product lines by introducing new flavors (Hot & Spicy Spam), sizes (mini-Oreos), colors (a blue version of Gillette’s black-and-silver Mach3 razor) and new-and-improved formulas (Ruffles potato chips with larger "flavor ridges"). But the brand-extension boom goes beyond traditional brand building with products that are more innovative, edgy and sharply consumer-focused.

It’s as if marketers are taking those goofy "no rules" car window decals to heart, driving even staid, venerable brand names into lines that defy neat categorization. Call it hybrid branding or freestyle marketing.

"There’s a definite blurring because of the ways companies are taking concepts and stretching them," said Lynn Dornblaser, editorial director at Mintel’s Global New Products, which tracks product development and brand extensions. "You’re going to see a lot more of it."

EZ Squirt

Take ketchup, a staple in 90 percent of U.S. households. Heinz discovered its 50 percent market share foundering among core ketchup users: the 6- to 12-year-olds. It developed EZ Squirt, which sports a shortened bottle made from easy-to-squeeze plastic and a needle-shaped nozzle that lets small hands use it to decorate food. What’s with the green?

"We asked kids what else could we do to make ketchup fun," said Casey Keller, managing director of Heinz ketchup, condiments and sauces. "They said it would be cool if we could make it a different color. So we made it green."

Targeting kids and teens makes sense, given the broader aging consumer market. "Young consumers are constantly on the lookout for new things; they’re very receptive to something that’s new and intriguing," said Irma Zandl of trends researcher Zandl Group. "And if it’s familiar to them, you’ve got the excitement of a new product under the halo of a brand they know."

Despite limited distribution after a July launch, EZ Squirt has already exceeded 12-month sales projections.

Under current brand management dogma, even moribund brands such as Dippity-Do hold value. The green-colored goo has been packed in nondescript tubs and marketed as styling gel for women since 1965. Now, corporate parent White Rain is giving it a gender overhaul to targeting teen boys, marketing chief Maureen Gregory said. Ads will soon feature Denver Broncos quarterback Brian Griese touting Dippity-Do Sport Gel in cobalt blue flask-style squeeze bottles.

"The good old-line brands that people know and find credible have more asset value than ever," said Roger Blackwell, an Ohio State University consumer behavior professor and marketing consultant.

Why? It’s an easier consumer sell if a product is packaged under a familiar brand name. "Branding is helpful not to identify a product, but to identify who is providing it," said Ian Friendly, brand manager of General Mills’ Yoplait yogurt. "You learn to trust certain brands."

It’s also a lot cheaper, another plus in a slowing economic environment. Extensive national advertising buys, product sampling and other marketing efforts to introduce consumers to a new brand can cost $100 million or more. Ads to back brand extensions can cost a third or less.

Thus, adding incremental growth to a product line through brand extensions is far more cost-effective, said Daryl Travis, CEO of Chicago-based consultant Brand-

trust and author of Emotional Branding: How Successful Brands Gain the Irrational Edge.

Build on the core product

Brand familiarity and cost efficiencies are prime reasons General Mills’ Hamburger Helper recently unveiled a line of meal enhancers designed for the oven, extending its aging stovetop line. It’s why Unilever, maker of Thomas’ English Muffins, is rolling out waffles. It’s why Kellogg, playing off its 36-year-old Pop-Tart brand, has rolled out Snak-Stix, which are break-apart, finger-length cookies. And it’s why Johnson & Johnson is adding yet another extension to its Tylenol brand with Women’s Tylenol Menstrual Relief.

"With the dollars it takes to build a brand, marketers are looking closely at the family jewels and how to build them into something more," said Stuart Berni, CEO of consultant Berni Marketing & Design.

Rob Wallace of Chicago-based brand identity consultant Wallace Church warned that some marketers risk consumer backlash. "We’ve overextended many brands already," he said. "It may be easier for a company to justify leveraging a product, but if it isn’t unique or clearly defined, you won’t connect with consumers."

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