Dettol - Managing Brand Extensions

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

Health & Personal 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

Home care (Household insecticides)

Air care

Shoe care

Dish washing

• Robin Blue • Vanish • Mortein – mosquito coils and mat • Mortein rat kill

• Haze incense

• Cherry blossom

• 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 Problem Symptoms Causes

Response

Way ahead

• 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

•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

• 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 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

BCG Matrix for the brand extensions of Dettol MARKET SHARE HIGH HIGH

LOW

STAR

?? Floor Cleaner

G R O W T H

Liquid Hand wash

Original Soap

Shaving Cream

Skincare Soap Antiseptic Liquid

LOW

Body Wash

CASH COW

Talc

Medicated Plaster

DOG

Why companies go for Brand Extension instead of introducing new brands? Exploiting existing brand’s equity

Costs of launching brand extensions are low

• 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.

• 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

Expand

• 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.

• 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 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

Lost Opportunity

Focus

Have a Vision

Line Logic

Established Brand Extensions: Factors responsible

Dettol

Factors: Successful Brand Extension Market Factors competitive Intensity

Company Factors Extension Specific Advertising

Order of Entry Strong Mother brand

Close fit

Dettol as a Brand in India

Brand Identity & Image (synchronized)

• 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

Dettol’s Brand Identity Physique: Antiseptic; germ killer

Relationship: Trustworthy & Reliable

Reflection: Doctor’s friend to the family

Personality: Fighter; Protective

Culture: Family Value (Mother Care)

Self Image: I am Protected from Germs/Infections

Dettol’s 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&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 Improves Brand Image

New product acceptance

Enhances brand loyalty

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

Clarifies brand meaning

Brings new customers into brand franchise

Benefits to Parent Brand

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 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

Option 2: Divestment or Liquidation

Minimizing investments, maximizing cash flows • Hold Milking Strategy: Pepsodent G • Fast Milking Strategy: Ambassador

Exit out of a brand