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L’eau de Beverly Hills

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Last week was an exciting moment for the City of Beverly Hills, California: they released a line of perfumes. From what I understand, Beverly Hills is the first municipality to ever try to market a line of scents. Aside from jokes about what the perfume smells like (Rolls Royce exhaust?), the move is eliciting plenty of raised eyebrows from cosmetic marketers and real estate agents alike.

As well it should. Beverly Hills perfume has got to be one of the weirdest brand extensions since the Smith & Wesson mountain bike. People say the road to hell is paved with good intentions. In reality it’s paved with Cheetos Lip Balm, Ben-Gay aspirin, Bic underwear and Hooters Master Cards. At least for brand managers.

What is it that motivates otherwise intelligent people to commit these sorts of crimes against their brands? The money, obviously. Products like Gerber Singles adult meals-in-a-jar arise from misguided brand managers’ attempts to make a fast buck off of a name that consumers know and trust.

What these folks invariably discover is that brands aren’t elastic. They can be grown, but they can’t be stretched. Colgate learned that when they tried to extend their name into bath soaps and frozen entrées. Not only did consumers not buy the new products, sales of their existing toothpaste products actually went down.

Why? Simply because of a basic rule of commerce: consumers like to buy products from specialists, not generalists. People who want sleek, sexy cars buy Porsches because Porsche is a sleek, sexy car specialist. Or at least they were until they came out with the Cayenne, a pudgy SUV. Here’s a question: does seeing a Cayenne parked in front of a dry cleaner’s or a day care center make you want to own a 911 more or less?

See what I mean?

This is not to say that the Cayenne isn’t making money, but its success is coming at great cost to the broader Porsche brand. For one of the iron laws of branding is that brand extensions, while they may be profitable in the short-term, always end up damaging the master brand in the long-term, causing an overall loss of market share. Companies from Colgate to Coke, IBM to Microsoft, BMW to GM have all learned that lesson — and learned it the hard way. The more you try to be all things to all people, the less those people want to have anything to do with you.

So why then are we constantly turning around to discover more new products like Dunkin’ Donuts deep dish pizza in stores? Because of short-term pressures to realize profits. That’s not an illegitimate reason, however every time it’s done another big piece of brand equity goes out the window. Is long-term loss of viability worth the brief uptick in profits? That’s the decision brand managers need to weigh before they bring another product like NASCAR romance novels to market.

The best brand stewards know that a great and enduring brand requires just three things: focus, focus, focus.

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