DETTOL: MANAGING BRAND EXTENSIONS

Group 6
Rahul Bedi Vipul Bajaj Souvik Roy Dinesh Rohra Amrit 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 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

Mortein mosquito coils and mat Mortein rat kill

Home care (Household insecticides)

Air care

Haze incense

Health & Personal care

Shoe care

Cherry blossom

Dish washing

Calgonit

About Dettol
Worlds 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 familys health and hygiene Positioned as an epitome of trust and reliability in the Indian consumers 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

Problem Symptoms
Causes
Despite being a highly popular brand with strong monopoly in the antiseptic segment, it faced stagnation in the late 1980s Restricted revenues

Sales volume not growing Inventory piled up with company and middlemen

Present in all households, but seldom used Because of price inflexibility since the govt. kept it under the purview of price control

Response

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

Way ahead

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

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 Cream

The 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 didnt 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

BCG Matrix for the brand extensions of Dettol

MARKET SHARE
HIGH
HIGH

LOW

STAR
Floor Cleaner

??

G R O W T H
LOW

Liquid Hand wash

Body Wash

Original Soap

Shaving Cream

Skincare Soap Antiseptic Liquid Talc

CASH COW

Medicated Plaster

DOG

Why companies go for Brand Extension instead of introducing new brands?

Exploiting existing brands equity
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.

Costs of launching brand extensions are low

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.

Experiment

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 brands equity into new categories.

Expand

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.

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 brands 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 brands 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 marketersBrand extensions will dilute the original brands equity. Sometimes there is a proliferation of extensions that dilute the parent brands positioning. Another danger in brand extensions is the positioning confusion.

To do list before going for an extension

To Extend or Not to Extend

Lost Opportunity

Have a Vision

Focus

Line Logic

Established Brand Extensions: Factors responsible

Dettol

Factors: Successful Brand Extension

Market Factors
competitive Intensity Order of Entry Strong Mother brand Close fit

Company Factors
Extension Specific Advertising

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 Doctors friend to the family

Brand Identity & Image (synchronized)

Dettols Brand Identity

Physique: Antiseptic; germ killer Personality: Fighter; Protective

Relationship: Trustworthy & Reliable

Culture: Family Value (Mother Care)

Reflection: Doctors friend to the family

Self Image: I am Protected from Germs/Infections

Dettols Brand Extensions: Analysis

Soap 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&Js Band-Aid & Bierisdorfs 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
Improves Brand Image Enhances brand loyalty

New product acceptance

Reduces perceived risk

Increases distribution efficiency

Cheaper introductory & follow up marketing

Increased Promotional Efficiency

Packaging and labeling efficiencies Long-run cost saving

Positive Impact
Enhances & revitalizes the parent brand Brings new customers into brand franchise Permits subsequent extensions

Clarifies brand meaning

Benefits to Parent Brand

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

Amuls reduced salt butter is slowly eating Amul regulars market

Negative Impact
Can succeed but diminish identification with any one category Can dilute brand meaning

The Chance to create a new brand may be forgone

Ensuring Success of Brand Extensions

CONNECT b/w the extension & the parent brand.

Extensions should strengthen overall brand equity.

Do so only when prior brand equity exists

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 Liquidation

Exit out of a brand