dettol - managing brand extensions

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DETTOL: MANAGING BRAND EXTENSIONS Group 6 Rahul Bedi Vipul Bajaj Souvik Roy Dinesh Rohra Amrit Baid Akshit Mediratta

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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

Established Brand Extensions: Factors responsible

Dettol

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

Reciprocal Impact

of Brand Extensions

Dettol

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

What if nothing works?

Option 1: Milking

Minimizing investments, maximizing cash flows• Hold Milking Strategy:

Pepsodent G• Fast Milking Strategy:

Ambassador

Option 2: Divestment or

LiquidationExit out of a brand