Seven Wolves: Behind The Trap Of Brand Extension

Are seven wolves not men's clothing? Yes, they used to be.

The seven wolves we are familiar with are Chyi Chin's slightly vicissitudes and rough manly taste, a wolf from the north.

That is to say, the seven wolves are mature young men.

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But now, the seven wolves are men's wear, women's wear, children's wear, sportswear, cowboy, cigarettes and leather goods.

From the original men's clothing, the seven wolves extended the industry and entered the tobacco field.

And children's wear.

The seven wolves have fallen into the trap of brand extension and can not extricate themselves.

This is not the seven wolves we are familiar with.

Brand extension, which looks like pie, is often a trap.

There are generally several cases of brand extension.

First, it extends in the industry.

From the analysis of industrial correlation, it can go up, down or at the same time.

This way of extension provides a good way to extend the source of materials and products.

The other is the parallel extension of industry, which is generally suitable for products with the same (or similar) target market sales channels, the same storage and pportation mode, and similar image characteristics, which is conducive to the marketing of new products, and on the other hand, is conducive to the consolidation of brand image.

Second, extend the product quality grade.

The following three extensions are included:

(1) extend upward, that is, increase the production line of high-grade products on the product line, so that the commodities can enter the high grade.

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For example, BYD motor has launched high-end models since F3.

(2) extend downward, that is, adding lower grade products in the product line.

Use the reputation of high-end brand products to attract customers with low purchasing power to buy low-grade and cheap products in this brand.

If the original brand is a well-known brand name, this extension will easily damage the reputation of famous brand, and the risk is very great.

For example, BMW and Mercedes Benz continue to launch low-cost models.

(3) two-way extension, that is, when the enterprises originally positioned in the mid-range product market have mastered the market advantage, they decide to extend the product line up and down in two directions, on the one hand, increase the high-end products, on the other hand, increase the low-grade products and expand the market line-up.

Third, other related extensions.

Also called diffusion method.

This is very meaningful for the famous brand that just grew up.

It has three kinds of situations: first, the single brand can spread to various products and become a series of brands, such as Haier, TCL, and so on, and use the same brand on different product lines; two, the brand of one country can spread to the world and become an international brand, mainly the products from abroad enter the Chinese market, such as Japanese electronic products, American cars and coke, European fashions and watches, etc. three, the brand name products can be extended to the enterprises, so that enterprises can become famous brand enterprises.

No matter what kind of brand extension, the connotation of the original brand is diluted, which often means the ambiguity of brand positioning and the weakening of brand image.

While getting new customers, it also faces the loss of loyal old customers.

Business operators and brand managers have such experience. The cost of developing a new customer is more than 4 times that of an old customer.

Does the seven wolves have such a rich product line? Is it really successful?

The market value of the seven wolves is around 10 billion.

And another men's clothing brand, nine Mu Wang's market value is 50% higher than it is 15 billion.

Nine year old Wang was an expert in men's pants, and later made a brand extension to enrich the men's wear product line.

But I will only buy nine shepherd's trousers.

If I want to sell my coat, I have a better choice. Jacket is ADIDAS or NIKE, and the sportswear is THE or NORTH.

Why not brand extension? Because the impression of consumers is hard to change, and consumers only receive information corresponding to their own cognition.

This is why it is the most difficult to eliminate misunderstanding in life.

In the minds of consumers, the seven wolves are men's clothing, nine herding men are men's trousers, BMW is the driving machine, Volvo is a safe car.

The brand extension may bring about temporary growth, but in the long run, it is a brand disaster: the Chunlan air conditioner, which once had great scenery, extended to the field of motorcycles and automobiles, gave GREE opportunities to focus on air conditioning, and even lost GE and GOOGLE to the top GE in many other fields. Now, the extensive extension of the product line of Mercedes and BMW has also given rise to high-end brand opportunities such as Michael Bach, Martha Lahti and Martin.