10 Truths of OTC No. 10: Stretch brand novelty through line extensions
Sara Jones and Nick Vaus
Truth 10: Stretch brand novelty through line extensions
Given the cost and challenge to create new brands entirely from scratch, and the fact that 40-50% of all new products fail, it’s hardly surprising that brand extensions now make up the majority of ‘new’ product launches every year, according to Nielsen. But even brand extensions aren’t always easy: failures like Cheetos Lip Balm litter the discount shelves.
Extension isn’t an art or a science. It’s both. There’s no magic formula, but there are key factors for success.
We categorize 21st century brand extension into three overarching themes: Migration, Marriage, and Metamorphosis.
Migration, moving to a new category, builds on marketing professor Ed Tauber’s 1979 model. It’s about knowing what business you’re in, and what your brand is actually known for, whether that’s ingredient-led or technical expertise, preventative, curative, or otherwise. Being a me-too product isn’t enough. Successful migration requires meaningful added value for customers.
Marriage is extension through multi-brand collaboration. It has the same strategic considerations as migration, but pools the resources of two or more brands to achieve it. It can be practical as with Puffs and Vicks, or more inspirational like Lipton and Theraflu, and offers myriad extension possibilities (and pitfalls).
Metamorphosis is the unicorn of brand extension – transforming a product proposition into a brand personality that’s completely free from category constraints. As consumer attention fragments across ever more channels, brands have to be playful, human and they have to take risks. Think limited editions, competitions or KFC flavors or fragranced nail varnish.
Extension is hugely pertinent to an OTC industry that’s consumer insight-led, but is manifestly not as prevalent as in CPG, with most stretches merely vertical (different flavor varieties, strengths or gallenic forms, for example).
In large part, this is due to OTC’s pharma-first approach, rather than a consumer-led approach that begins by understanding what the brand is actually about in order to extend it meaningfully. Extension successes in OTC are mostly from CPG companies for brands like Oilatum and Aveeno. Or witness P&G’s Vicks, which leveraged its 120 year-plus history of congestion relief to massively extend from a simple decongestant product to a brand portfolio that now includes sleep aids and devices like purifiers, steam inhalers and humidifiers.
But OTC is starting to get it. Nelsons, the homeopathic remedy, introduced a new Rescue Plus range for stress, energy and sleep, including flavored lozenges and gummies. Dr Scholl’s moved up the leg into pantyhose, and Canesten now has women’s intimate freshening products.
Others are jumping into the OTC space – Neutrogena has an anti-acne light mask and hearing aid manufacturer Starkey Technologies launched a range of Ear Health products with solutions for earwax, earaches and itchy ears.
There’s so more that can be done. We mooted the concept Cadbury's Nytime, which combines two sleep cues from Cadbury's Hot Chocolate and Nytol (a popular sleep brand in the U.K.) – one of gentle enjoyment and one of efficacy – to create something powerful with added value.
Or consider the idea of Schweppes Indian Tonic Insect Repellent. As a contrast to Deet and other competitors, this could leverage the quinine ingredient (with its history as an insect repellent and malaria treatment), with the added consumer benefit of a pleasant zesty orange and lemon peel fragrance.
Similar OTC migrations might include allergy relief brands like Claritin or Allergra moving into anti-allergy skin spray or sunscreens to prevent and tackle prickly heat or sun rash, for example.
So many opportunities exist. It just requires the courage to forensically examine your brand and consumer needs-led insights to see what else might add value to its journey with consumers.
Over the last 20 years, DewGibbons + Partners has helped design some of the world’s most iconic and successful OTC brands, resulting in a deep appreciation of the visual and physical cues — and regulatory limitations — in the self-care and OTC marketplace. The need to challenge those cues and limits is becoming far more frequent.
This is the tenth and final truth, all part of a 10-part series from Sara Jones and Nick Vaus of DewGibbons + Partners. The series has been published weekly and featured in the DSN Health and Wellness newsletter for almost the past quarter. Links to the first nine truths are below.