Seven wolves: behind the brand extension trap

What is the seven wolves?

Are seven wolves not menswear? Yes, it used to be. The seven wolves we are familiar with are the masculiness of Qi Qin and the rough savage, a wolf from the north. In other words, seven wolves are the clothing of mature young men.

But now, seven wolves are men's, women's, children's wear, sportswear, denim, cigarettes, and leather goods. Seven wolves from the initial men's clothing, carried out an industrial extension, entered the tobacco field; but also extended the spread into the denim, women's and children's clothing field.
Seven wolves have fallen out of the trap of brand extension.

This is no longer the seven wolves we are familiar with.

The brand extension looks like a pie, and it is often a trap.

There are several situations in which brand extension generally occurs:

First, it extends to the industry. From an industry correlation analysis, it can extend upwards, downwards, or both upwards and downwards. Adopting this extension method provides a good extension for the source of materials and products.

The other type is the parallel extension of industries, generally adapted to have the same (or close) target market sales channels, the same storage and transportation methods, and similar image characteristics of the product areas, which on the one hand is conducive to the marketing of new products, on the other hand Conducive to the consolidation of brand image.

Second, extend the product quality level. Includes the following three extension methods:

(1) To extend upwards, that is, to increase high-grade product production lines on the product line so that commodities can enter the high-end market. For example, BYD Auto has launched high-end models since F3.

(2) To extend downward, that is, to add a lower grade product to the product line. Utilizing the reputation of high-end branded products, customers with low purchasing power attract customers to purchase low-end and low-priced products from this brand. If the original brand is a well-known brand name, this extension can easily damage the reputation of the brand name, which is very risky. For example, BMW and Mercedes continue to introduce low-priced models.

(3) Two-way extension: After the enterprises originally positioned in the mid-range product market have mastered the market advantages, they decided to extend the product line up and down in both directions, on the one hand, to increase high-end products, on the other hand, to increase low-grade products and expand the market lineup.

Third, other related extensions. Also called diffusion method extension. This is very meaningful for the brand that has just grown up. It has three situations: First, a single brand can be extended to a variety of products and become a series of brands, such as Haier, TCL, Midea etc. in the Chinese home appliance industry, and use the same brand in different product lines; Land brands can spread to the world and become international brands, mainly foreign products entering the Chinese market, such as electronic products in Japan, the United States, cars and cola, fashion and watches in Europe, etc.; third, brand-name products can be extended to the company. Make the company a brand-name company.

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

While getting new customers, it also faces the loss of loyal old customers. Both corporate managers and brand managers have such experience. The cost of developing a new customer is more than four times that of an old customer, which is not worth the candle.

Seven wolves have such a rich product line. Is it really successful?

The market value of seven wolves is about 10 billion. The market value of the other men's clothing brand, Jiu Mu Wang, is 50% higher than it is 15 billion. Jiumu Wang was originally a men's trousers expert. Later, he also did a brand extension and enriched the men's product line.

But I will only buy Jiu Mu Wang's pants. If I want to sell a jacket, I have a better choice. The jacket is either Rimula or Lilang. The collar is a card. The sportswear is ADIDAS or NIKE. The outdoor outfit is THE NORTH FACE or Columbia.

Why can't brand extension? Because consumers' impressions are difficult to change, consumers only receive information that corresponds to their own perceptions. This is why it is the hardest to eliminate misunderstandings in life. In the minds of consumers, seven wolves are men's, nine-pastoral kings are men's trousers, BMW is a driving machine, and Volvo is a safe car.

Brand extension may bring about temporary growth, but in the long run, it is a brand disaster: once the glorious Chunlan air conditioner extended to the motorcycle and automobile fields, giving GREE opportunities focused on air conditioning; even then GE, which is one of the best in many fields, also lost to GOOGLE and Apple. Now, the extensive extension of Mercedes-Benz and BMW's product lines has also given high-end brand opportunities such as Maybach, Maserati, and Aston Martin.