dettol - managing brand extensions
TRANSCRIPT
DETTOL: MANAGING BRAND EXTENSIONS
Group 6Rahul BediVipul BajajSouvik Roy
Dinesh RohraAmrit Baid
Akshit Mediratta
About Reckitt Benckiser plc
British multinational consumer goods company
Headquartered in Slough, United Kingdom.
World's largest producer of household cleaning products and a major producer of consumer healthcare and personal products.
Reckitt Benckiser's brands include
• Dettol (the world's largest-selling antiseptic), • Strepsils (the world's largest-selling sore throat medicine), • Veet (the world's largest-selling depilatory brand), • Air Wick (the world's second-largest-selling air freshener), • Clearasil, Durex and Vanish.
Operations in around 60 countries and its products are sold in almost 200 countries.
Reckitt Benckiser India Ltd. (RBIL)
Wholly owned subsidiary of Reckitt Benckiser plc
Incorporated in 1951 as Reckitt & Colman India
Renamed RBIL after merger of parent company with Benckiser NV of the Netherlands in 1999
RBIL contributes 4% to global revenues of Reckitt Benckiser plc
Niche market strategy
• Large no. of unorganised players and few organised players
Product portfolio
Surface care
• Harpic• Lizol• Colin• Brasso & Silvo• Mansion Mincream
Health &
Personal care
• Disprin• Dettol Mouthwash• Dettol Floor cleaner • Dettol Antiseptic Liquid• Dettol bar soap• Dettol Antiseptic Cream• Dettol Antiseptic pain relief
spray• Dettol Antiseptic adhesive
bandage• Detto liquid handwash• Dettol shaving cream• Dettol talc
Fabric care• Robin Blue• Vanish
Home care (Household
insecticides)
• Mortein – mosquito coils and mat
• Mortein rat kill
Air care • Haze incense
Shoe care • Cherry blossom
Dish washing • Calgonit
About Dettol
• World’s most trusted and used antiseptics• Launched in India in 1933 in the Antiseptic liquid form as a treatment for cuts and wounds.
– 1990 – Rs. 27 crores– 1998 – Rs. 168 crores– 2001 – Rs. 230 crores
• started its journey as the ‘cuts and wounds’ brand in the country, over the years it has taken over the role of ‘protector from germs’ in every situation.
• Major products– Antiseptic Liquid, Handwash, Soaps, Shaving Cream, Adhesive Bandages
• Spearheaded cause of household protection amongst masses and helped them improve the quality of family’s health and hygiene
• Positioned as an epitome of trust and reliability in the Indian consumer’s mind• Had top of the mind recall in any given instance of wound or cut• Brand offered both rational as well as emotional appeal
Need to grow the brand• Despite being a highly popular brand with strong monopoly in the
antiseptic segment, it faced stagnation in the late 1980s• Restricted revenues
Problem
• Sales volume not growing• Inventory piled up with company and middlemenSymptoms
• Present in all households, but seldom used• Because of price inflexibility since the govt. kept it under the purview of
price controlCauses
•New marketing strategy, basic idea to project Dettol as an all-purpose antiseptic liquid•Advertisements claimed multiple uses•Add it to water for washing clothes•Floor cleaning, bathing, shaving, etc.
•Sales volume started picking up
Response
• Its success gave way to the ‘brand extension’ strategy which aimed at fully exploiting the potential of Dettol and establish its presence in the consumers’ everyday life
• Company decided to introduce new products consistent with a variety of secondary usages of Dettol
Way ahead
Dettol Soap• 1981• Originally launched as a premium cosmetic soap, positioned on the ‘‘love and
care’’ platform. It failed!• Mother brand:
– Functional – Antiseptic – protection from germs and healing wounds– Emotional – love and care
• It faltered on the first parameter• Consumers unable to relate the hygiene and germi-check image of dettol with the
cosmetic benefits the ‘soap’ claimed to offer• Corrective action – Relaunched as “100% germ fighter”. Successful!• Line extensions
– 1999 – Dettol Fresh (perfumed)– 2000 – Dettol Extra (moisturizer)– 2001 – Dettol Junior (2-6 years)– 2004 – Dettol Skincare (Women)– 2006 – Dettol Cool (Menthol – for teens and youngsters)
• On the whole, Dettol started facing tough competition in the Health & Hygeine segment from Lifebuoy (“germ killing”) , Savlon (“family protection”, Medimix, Margo and Hamam.
Dettol Liquid Soap• Increasing competition in the mid 1990s forced RBIL to look for product innovations• Thus came Dettol Hand Wash, a liquid soap• It clicked and led to huge sales growth over the years• Line extensions
– 2003 – Dettol Skincare hand wash– 2006 – Dettol Sensitive hand wash (sopa free)
• Realising trend of bathing with body wash was catching up, RBIL launched Dettol Body wash in three variants:
– Original– Skincare– Cool
• Targeted upper class customers, hence priced higher• Dettol liquid soaps further helped the company in moving Dettol out of first-aid boxes into households• By 2004, Dettol liquid soaps becam the market leader with a 45% market sahare in value terms.
Dettol Medicated Plasters• In 1991, Dettol entered into medical plasters category• Major competitior: Band-aid from J&J• Sound rationale behind entering in to this segment since the brand
symbolised protection and was used for small cuts, bruises and external injuries
• Ulterior motive : Combative strategy to divert attention and resources of J&J from relaunch of Savlon, in which it succeeded.
• However, it did not do well as a product. – Low value product– Households in India used traditional home remedies– Market very small : Rs. 20 crores
• Good example of brand extension which failed to succeed despite having a theoretically sound logic behind it.• Strong and acceptable brand association
Dettol Shaving CreamThe idea of brand extension into this category was a result of:• 30% of shavers used dettol liquid after shaving and did not feel the need for any
aftershave• The average frequency of purchase for dettol liquid for this purchase was higher than
that for wounds and injuries
However, dettol shaving cream did not satisfy the cosmetic need
The medicinal smell associated with it was unacceptable to consumers
It faltered on this dimension and was • withdrawn shortly
Dettol Talc
Entered the prickly heat talc market in 2000
Initially launched in southern India
After it failed miserably, it had to be
re-launched but it still didn’t do well • No visibility, market share less than 1%• Lack of fit between the core attributes of the extension and
that of the parent brand• Even though it had a pleasant fragrance, consumers believed
it had its typical medicinal smell• Dominant brands in this segment were nycil, dermicool and
boroplus
Dettol Mouthwash
The company assumed it would portray the image of a germ fighting product in the mouth
However, no takers. Was withdrawn
Several factors responsible for its failure
• Mouthwash was more about fighting bad odour rather than germs• Consumers were sceptical about using any dettol product for internal use• The thought of the sting, colour and the smell restricted consumers from
taking it in their mouth
Dettol Floor Cleaner
Test marketed in Kolkata and Chennai in 2002
Germ killing proposition was the major fit with the parent brand
It was believed to be a branded substitute for dettol liquid (which was used with water as a floor cleaner)
Central theme of marketing communication was the need to prevent the frequency of illness in households
However, it too failed to get adequate attention
STAR ??
CASH COW DOG
HIGH
HIGH
LOW
LOW
MARKET SHARE
GROWTH
Liquid Hand wash
Original Soap
Antiseptic Liquid
Floor Cleaner
Body Wash
Shaving Cream
Skincare Soap
Talc
Medicated Plaster
BCG Matrix for the brand extensions of Dettol
Why companies go for Brand Extension instead of introducing new brands?
• Brand extensions often are perceived to be a less risky strategy for launching new products. The logic behind using the existing brand name for new products is to exploit the brand equity of the existing brand. The use of the prominent brand in the new product is expected to trigger trial usage by the consumers of the parent brand.
Exploiting existing brand’s equity
• Both the channel members and the consumers are familiar with the brand. Hence the extensions are tapping on the existing awareness of the brand. The marketers can thus use their budget to increase the trial usage rather than spend money on creating brand awareness.
Costs of launching brand extensions
are low
• Brand extensions also prompt marketers to explore new categories for the brand. Since the cost of launching brand extensions are lower compared to a new one motivate the marketers to leverage the existing brand’s equity into new categories.
Experiment
• Brand extensions also expand the scope of the brand. Dettol which is a highly successful antiseptic lotion brand has now a basket of products ranging from soaps to plasters. The brand extensions increase the scope and turnover of the brand and thus give more revenue to the firm.
Expand
Negatives of Brand Extension
Brand Extensions have its own set of negatives. Brand extensions are based on some assumptions which if gone wrong can affect the parent brand’s equity.
Assumption 1 - consumers like the brand hence will like all the products endorsed by the brand irrespective of the categories.Assumption 2 - the parent brand’s equity can be leveraged across various categories. Hence brand extensions will have similar positive equity as the original brand.
Critics argue that there is always two big underlying hazards of brand extension which is often overlooked by the marketers-
Brand extensions will dilute the original brand’s equity. Sometimes there is a proliferation of extensions that dilute the parent brand’s positioning.Another danger in brand extensions is the positioning confusion.
To do list before going for an extension
To Extend or Not to Extend
Have a Vision
Line LogicFocus
Lost Opportunity
Factors: Successful Brand Extension
Market Factors
competitive Intensity
Order of Entry
Strong Mother brand
Company Factors
Extension Specific Advertising
Close fit
Dettol as a Brand in India
• Trust worthy and Reliable• “King of Germ Kill”• Top of the mind Recall
• cuts or wounds• Offered both Rational and
emotional appeal• Doctor’s friend to the family
Brand Identity & Image
(synchronized)
Dettol’s Brand Identity
Relationship:Trustworthy & Reliable
Reflection:Doctor’s friend to the family
Self Image:I am Protected from Germs/Infections
Culture:Family Value (Mother Care)
Personality:Fighter; Protective
Physique:Antiseptic; germ killer
Dettol’s Brand Extensions: AnalysisSoap Bar: Chequered performance• Parent Brand Positioning: Utilitarian & Emotional appeal• First Launch: Failed: lack of fit with parent Brand: Positioned with Emotional Appeal only• Re launch: Success: Good fit with parent brand: 100 % germ fighter • Lackluster Performance: High degree of competition
Liquid Soap: Success• Body wash, hand wash• Order Of Entry: Niche Market: Upper class customer: comfort conscious
consumer • Aggressively Marketed
Medicated Plaster : Failure• Launched to Compete against the competitor J&J to protect its Cash cow Product i.e.
Dettol Antiseptic thus low on Marketing Budget• Strong Fit with Parent Brand• Small Market consumer involved in traditional methods of healing wounds• Intense Competition from J&J’s Band-Aid & Bierisdorf’s Handyplast
Dettol Talc: Failure• Lack of Fitment with the Product Category• Consumer Behavior: Lingering Fragrance of a Talc• Consumer Association with Dettol: strong Medicinal smell
Dettol Mouth Wash: Failure• Gap in Awareness of Consumer Behavior• Actual Positioning: Germ Killer, Required Positioning: Prolonged Fresh Breath• Parent Brand Association with External usage only & the Product extension required
internal Brand association
Dettol Floor Cleaner: Failure• Traditionally Consumer used Dettol with water • Lack efforts to change consumer usage behavior• Heavily marketed and positioned as cleaner with germ killing and thus protects Family
from Illness• Strong fit with parent brand
Dettol Shaving Cream: Failure• Medium on Close Fit parameter• High on Utilitarian Benefit but Low on cosmetic Benefit• Low on marketing efforts
Positive Impact
New product
acceptance
Improves Brand Image
Reduces perceived
risk
Enhances brand loyalty
Increases distribution efficiency
Increased Promotional
Efficiency
Cheaper introductory & follow up marketing
Long-run cost saving
Packaging and labeling
efficiencies
Positive Impact
Benefits to Parent
Brand
Clarifies brand
meaning
Enhances & revitalizes the parent brand
Brings new customers into brand franchise
Permits subsequent extensions
Negative Impact
Can confuse or frustrate consumers
Can encounter retailer resistance
Can fail & hurt parent brand image• Xerox Computers, no one believed they could make computers
Can succeed but cannibalize sales of parent brand• Amul’s ‘reduced salt butter’ is slowly eating Amul regulars market
Negative Impact
Can dilute brand
meaning
The Chance to create a new brand may be
forgone
Can succeed but diminish identification with any one
category
Ensuring Success of Brand Extensions
‘CONNECT’ b/w the extension &
the parent brand.
Do so only when prior brand equity
exists
Extensions should strengthen overall
brand equity.
Developing a systematic approach for taking decision about revival or discontinuation of a
failed brand extension
Why Revive!!
Brand still has high awareness
Brand still has some values with consumer
Product still selling
Cost of building a new brand is far higher
Why Discontinue!!
Weak consumer acceptance and/or product performance failures
Decisions by distributors and retailers to stop carrying certain branded services or products
Positioning and/or marketing communications failures
Financial distress and/or bankruptcies
Intense competition from bigger brands with stronger support budgets;
Internal strategic decisions by firms to commit resources to larger brands and pull resources from smaller brands
The desire to eliminate redundant brands after industry consolidations
Ways to revive
Increase Usage
Finding New Uses
Entering New Markets
Augmenting the Product
Obsoleting Existing Products
Extending the Brand