Why Brand Extensions Now?

A powerful, established BRAND is the cornerstone for resilience against margin pressure and inflationary setbacks, a distinct competitive advantage, a catalyst for fostering a robust team culture, and a vital organizational ambassador. However, these hard-earned assets are jeopardized when the industry faces scrutiny due to Surrogate Advertising practices.

The distinction between Surrogate Advertising and legitimate Brand Extensions has fueled a debate spanning three decades. Having participated in industry discussions surrounding advertising bans for restricted categories like tobacco, cigarettes, wine, alcohol, and other intoxicants, I witnessed the genesis of the CTNR Act 1995, supported by the CBFC, CCPA, and ASCI guidelines. While these regulations have evolved, the fundamental differentiation between brand extensions and surrogates, established 30 years ago, persists.

As we await the CCPA's latest notifications, it's imperative for industry leaders, brand, and marketing teams to proactively reassess their Brand Extension strategies. This is a critical opportunity to address the prevailing TRUST deficit with stakeholders through decisive and timely actions, reinforcing our industry's integrity.

Surrogate and Brand Extensions are the same?

A surrogate, by definition, is a substitute or replacement, often inheriting genetic traits. In marketing, it serves as a stand-in for restricted products, mimicking the "mother brand" as defined by the CTNR Act 1995 and related regulations. Conversely, a brand extension builds upon an existing brand's market perception, leveraging its recognition, loyalty, and positive associations.

Surrogates typically have a limited lifespan due to their inherently narrow conceptualisation. Brand extensions, however, originate from a more robust foundation, though they are not immune to market pressures and competitive forces that can shorten their viability.

When your marketing and brand teams consider brand extensions, they must address these key questions:

• Is there a genuine, natural fit between the proposed extension and the "Alcohol Brand" name? Can the extension effectively capitalise on the "Alcohol Brand's" established equity?

• Is there potential to create a sustainable and scalable business within the new category?

• Should the strategy involve a single brand extension or multiple extensions? If multiple, should they be launched concurrently or in a phased approach?

Surrogates are linear. Brand extensions as the name suggests extend itself

The "cloning" approach, where an "alcohol brand" is replicated, inherently limits future extensions. The surrogate brand becomes confined to a narrow range, such as water, soda, or glassware. Attempting to extend such a surrogate into diverse categories risks inflicting a form of brand schizophrenia on the parent "alcohol brand," diluting its core identity.

Conversely, a strong, well-established, or even newly conceived "alcohol brand" can act as a powerful springboard, unlocking a vast spectrum of extension possibilities: form variations, flavour innovations, complementary products, vertical integrations, and even seemingly unrelated category expansions.

Measuring Outcomes is the KEY

Recognizing that successful Brand Extensions demand substantial investments, it's crucial to meticulously track key performance indicators, encompassing launch metrics, necessary modifications, and strategic pivots.   

At Integrated Insights Consulting, in collaboration with our partners, we've developed a proprietary research model designed to provide actionable insights. This model quantifies the net movement of brand health indicators, such as salience, consideration, and positive associations, from pre-launch to post-launch.

For in-depth discussions on Brand Extension strategies, please contact nita@integratedinsights.in

Nita Kapoor, Co-Founder - Integrated Insights Consulting

We specialize in providing services to the Alcobev and FMCG sectors, including public advocacy, Brand Extension development and execution, tailored Brand Extension workshops, and India market access facilitation.

The views expressed are personal.