The Journal of the Medinge Group, vol. 3, no. 1, 2009.

Philippe Mihailovich
Philippe Mihailovich

Where the brand’s personality is seen to begin – often the first successful product – is critical to the brand’s credibility and its ability to stretch further over time. A brand always has to entrench its reputation somewhere before it attempts to broaden its activities – as with a rubber band. To stretch it, it needs to be fixed at one end first. When a brand’s DNA is formed, it begins with these fixed ends or roots fixed in the ground and if those roots are not developed, the brand may not be strong enough to support any stretching. Of course, these ‘roots’ simply lie in our minds, and here’s where it can get tricky.

One important benefit of building a strong brand is that the name can be extended to diverse categories. This is especially true of certain house brands (as opposed to product brands). In David Aaker’s 1991 classic, Managing Brand Equity he warned that ‘brand name can fail to help an extension, or (worse) can even create subtle – and sometimes not so subtle – associations that can hurt the extension. Worse still, the extension can succeed, or at least survive, and damage the original brand equity by weakening existing associations or adding new, undesired ones’. (1) Aaker argues that essentially the extension needs to fit the brand. The customer needs to be comfortable with the concept of the brand name being on the extension. If the fit is poor, desired associations will not transfer but perhaps (worse still) will distract, or even precipitate ridicule.

One can just imagine the reaction of research respondents at that time whether they could conceive of an airline bearing the name of the music store and record label, Virgin. It is doubtful that the public would have perceived the extension to ‘fit’ on any of the Aaker and Keller (2) dimensions, i.e quality, transfer, substitute and complement. These old schools of thought considered the strategies of leading branded manufacturers such as the P&Gs, Unilevers and Coca-Cola’s of this world, to be the ultimate branding strategies, yet at the time, all were focusing on developing specialist Product Brands.

‘Retailers understood the inherent power of their Corporate House Brands and began to exploit this power on a scale never seen before (British private label brands in particular) and, for the first time in ages, the biggest branded manufacturers were being forced to rethink their branding strategies. Then came the surprise attack from Virgin. (3) Why was it a surprise? Virgin’s Richard Branson had a clear strategy to build a portfolio of attribute-based, rather than product-based, brands that will probably have nothing in common other than their association with the Virgin name and in reality, with the founder’s personality itself. There were no gaps in our minds. It made sense that the hot air balloon adventurer would be someone who could own an airline and vice versa. We now accept Virgin as a trustworthy brand for space flights! It’s all a matter of bridging the gaps in our minds so that we can accept and trust these brands in a new category.

Fashion brands have long been able to do this with much ease. It helps when they have a creative head at the top who creates something new out of pure passion. Chanel is a great example: from hats and fashion to perfume creation. She was one of the first to do so. Today it’s almost an expected thing for a designer to do at some point to generate additional awareness and income. How come Chanel hasn’t moved into lingerie? It’s been the fastest growing fashion category over the last ten years! How come the brand has not ventured into menswear? Dior and others have?

It could be argued that Virgin now has two cores, one for music, the other for travel. Virgin’s founder, Richard Branson has built his brand extensions from the brand concept – but had it not been for the personality of the man himself, it is doubtful that the airline would have succeeded. He acts as the griffe (or personal touch) of the Virgin brand. A living griffe has more chance to break rules than a brand with a rigid DNA, frozen in form. With a griffe-brand, there should be no limit to the seeds that can be planted in the brand’s core. The success of one seed rubs off on others, primarily those in closer proximity to the core of that seed. Fashion creators have added value to Paris via fashion, fragrances and other luxury goods. Every successful launch alters the DNA of France, creating new kernals, new seeds that can grow and stretch as far as the consumers will accept them. We have seen how Chanel has stretched its brands across many categories, and each time they have been successful. Armani has not as yet faced problems either. Not all brands can do this.

Traditionally companies tend to consider line extensions on the basis of the line of business they’re in i.e ‘stick to what you are good at’. If they work in the fashion business, they may naturally prefer to extend into textiles instead of fragrances. The brand architect, on the other hand, considers what business a brand’s believers would accept or even like to find their brand in (as reflected in Fig 1). It is here that the life of a brand can become infinite.

Story building
As we accept Chanel to be in fashion and we accept that fragrance is linked to fashion, we can accept a fashion brand entering into the fragrance field. We can even readily accept the brand entering into make-up, fine jewellery, timepieces and sunglasses, but skin care requires a different justification altogether. What heritage does a fashion house have in skin care. Where will the expertise coming from? Chanel is not a pharmaceutical brand but a fashion brand, yet it has succeeded in skin care. If we are to accept the brand in this category, it will not be due to the fame of the brand or its fashion heritage. It is more likely to be due to the personality of Coco Chanel herself or the high quality of goods attached to the House Brand or another attribute altogether.

The brand’s attributes need to be nurtured and developed step-by-step, just as we would develop the story for a documentary – note: non-fiction as preferable to fiction. Let us share your story with you step-by-step. We cannot accept a brand being in the music business today and flying us to space the next day unless we are able to follow the evolution of the brand’s DNA, bit-by-bit. For Virgin it helped that Branson is a living griffe, made transatlantic flights in hot air balloons and became totally associated to flying, travel and the like. Pierre Cardin confused us because we could not see the link, not even a design link, between one category and another that the brand has entered.

In one of the founding papers on Brand Architecture, one that clearly laid the foundation for David Aaker’s model (the similarities are remarkable!), Mihailovich and De Chernatony show that House Brands (meaning Maison Brands) often have the ability to stretch further than product brands. (4) The House brands are described as Family names whereas the Product Brands are seen as children of the family. A famous family name creates a dynasty i.e The Kennedys. In the case of L’Oreal, the children, all famous, all different share similar family attributes and reinforce the family reputation in the field of hair and beauty, from Paris. Name, reputation, attributes and place all playing their part. What’s missing for L’Oreal, compared to Virgin or Chanel, is the personal touch, the person/founder/creator with a license to do what pleases them. We, the consumer, give them that license. If it doesn’t ‘fit’ the reputation or attributes, we are likely to reject their offer.

Why are we likely to reject Chanel Men? Because there’s a big gap between the totally feminine positioning of the brand and the male shopper. It doesn’t ‘fit’. In fact chanel was known for having hijacked the men’s suit for women. So how can we close that gap and make it ‘fit’? This is probably what Chanel is considering right now. The company has had Chanel Homme fragrances on sale for some years now. We are getting accustomed to seeing it. Now there’s speak of ex- Dior menswear designer Hedi Slimane planning to join Chanel. Karl Lagerfeld, the creative director of Chanel claims that he lost weight to fit into Slimane’s ‘skinny jeans’ so it would come as no surprise if the brand moves in this direction. They are closing the gap.

Brand elasticity is about horizontal stretching. Why do it and what is the best way to do so? All brands need to keep moving and to keep building their stories by bringing us new and exiting products or experiences season-by-season or year-by-year. Each new story sows the seeds of new legacy. It may start as a belt-maker and end up as a brand making shoes, bags, fashion, watches and eyewear. A place brand develops in just this way. Japan had no fashion designer heritage to start with but today has a whole stable of powerful designer brands. How did they do that? China will do doubt do the same one day. Having a long-term vision (objectives) and knowing which steps to take to get there (strategy), is of utmost importance. The key is to start sowing the right seeds from day one.

When a brand has a living griffe as a founder-creator and especially if it shares the name of its founder-creator, the brand has the advantage of being born with the complete personality of its founder. For a brand with a made-up name created by a businessperson with no personality to impart on its brand, it needs to construct such a personality. But what are the actual attributes that we need to build in. First, we need to present a strong mental image of the brand. I have already spoken of the need to appeal to both our left-brain and right brain. The brand needs to have a defined domain, an anchor, and the key attribute here is reputation.

Reputation takes time to build but we should be aware of which elements can be called into play to do so, but for this I would strongly advise you to read Global Brand Strategy by our esteemed member, Sicco Van Gelder who identifies six key criteria that make up reputation: Pedigree, Quality, Endorsements, Origins, Promises, and Personality associations. Ideally, a luxury brand will try to use as many of these six Van Gelder attributes as possible instead of simply choosing one and sticking with it. Each one can add another layer of the brand story and it is things like this that enable the brand to begin to stretch across market categories.

Vision
To design a brand that will have an ability to stretch, it is always useful to consider the long-term vision for this brand before deciding on its brand name, positioning, and category expertise. It should then make it easier to decide on the universe that the brand can represent. To plot the elasticity potential of a brand based on its planned or existing DNA, a Brand Stretching Matrix is proposed (See diagram below)

The Brand Stretching Matrix shown above, is in reality, a simple model that can be used to test how far a brand’s reputation has or can stretch in the consumer’s mind. It is perhaps more useful as a tool for examining the extent to which the DNA of a brand may have to be adjusted in order to make a line extension fit, i.e which seeds have to be sown or which attributes need modification to provide the right conditions for such a seed to grow. The rings show where the brand was born.

We see how, due to Dom Perignon’s monk (the founder) and strong champagne heritage as well as its consistency in reinforcing it’s champagne-only positioning, the House Brand cannot readily stretch into aligned areas such as skin care or fashion with much credibility. Should it wish, it could probably extend into champagne bars and restaurants, and then later, perhaps high-end luxury hotels and spas in line with the brand’s heritage. To stretch into fashion, it would have to build on another attribute such as its relationship with Karl Lagerfeld but even that would not be enough for us to accept this luxury brand into fashion. The closest it could get is perhaps to offer venues for fashion shows or launch an events company.

If we return to Chanel, The brand has extended across most of the fashion-related categories but has always resisted moving into men’s fashion remaining loyal to its feminine heritage. It has not moved into home products either but due Coco Chanel’s attachment to the Ritz hotel, the brand does have a heritage which it could well leverage in order to enter into the boutique hotel world and once there, decide to extend into spas and even champagne and fine cakes. Thank goodness it hasn’t. It has not even been tempted to trade down to the lesser categories as Armani has done with AX. To go into luxury cars would be ludicrous but we could imagine a sexy limited edition Chanel Smart car. Cunningly entering into Men’s toiletries with Allure Homme Sport and the like, the brand has begun to groom consumers into accepting Chanel as a universe in which men too are catered for. As such, the personal care category plays a leading role of bridging gaps in our minds and preparing us to accept the forthcoming Chanel Homme fashion line – stretching strategically step by step.

Armani has stretched across almost all the categories on the matrix. This is a phenomenal feat considering that the visionary man started out in menswear. It would seem that the key attribute for Armani was first his Cerutti heritage coupled with the fact that he unveiled an unstructured jacket for women only three months after his menswear debut. Made with traditional menswear fabrics, it was as simple and soft as the man’s and bore a masculine authority. With this alternative to long, flower-child skirts and classic French tailleurs, Armani joined Paul Poiret and Coco Chanel as an emancipator of women’s fashion. The film American Gigolo in which he dressed Richard Gere secured Armani’s fame with the general public and marked the beginning of a long and fruitful history of collaboration on films. Could he become a film director next? Why not?

Ralph Lauren started his brand with neckties and a new name. In 1967 he founded Polo Fashions of New York mixing old England with America. Four years later he had his first retail store and launched a women’s line. He succeeded in stretching his brand upwards, downwards and across before Armani did, but is now clearly lagging behind. He has yet to reach the heights of Haute Couture but is fast on the heels of Armani to open hotels and restaurants. No doubt their brand DNA’s allow them to be accepted in most, if not all, lifestyle areas. Would Armani and Lauren be tempted to attach H&M too or would they prefer to be guest designers for the brand?

Porche has successfully introduced a Porche Design concept store in at least 21 countries, trading obviously on the brand’s design and engineering and performance heritage. Like Harley Davidson, the brand offers strong social affinity attributes from drivers bonded to the brand. It is a highly aspirational men’s brand with the potential to stretch further. Like Vuitton however, the brand has not as yet ventured into fragrance, which even Bugatti has done. Obviously fragrances are not seen to fit with their brand DNA’s, yet.

Ladurée, famous for its macaroons, started out as a bakery in rue Royale, Paris in 1862. In 1871, after a fire, the bakery was transformed into to a pastry shop decorated a famous turn-of-the-century painter and poster artist, Jules Cheret, who was inspired by the painting techniques used for the ceiling of the Sistine Chapel and the Garnier Opera and at a later date evolved into a tea room. In 1993 the maison was bought by current owner David Holder who ois currently building on the great reputation of this salon de thé, as well as create an environment for gastronomic creativity in Paris. Ladurée is being prepared to become a tea salon, pastry shop, restaurant, chocolate shop and ice cream parlour in all the main capitals of the world. Clearly it will have the right attributes to extend to boutique hotels one day should it wish to but as a specialist in gourmandises it would have more credibility to open up a hotel school than a fashion house.

Costes, the luxury Parisian hotel and restaurant group has successfully expanded into a very large network of restaurants in the best parts of Paris, usually where there are parking lots nearby, and part of its success is not to use their name on the restaurants. They simply publish a very high quality magazine called Palace Costes of almost Vogue calibre, which lists the all the restaurants under the title, Le Club Costes. Most are partnerships with independent owners and the Costes brand remains hidden as the ingredient brand providing all the food, drinks and service standards. What is smart about this approach, it that it’s image is not cheapened by visibility.

The brand has very successfully entered the world’s lounge music seen with its series of innovative compilations and has also succeeded in creating trendy fragrance and vodka lines in its deep red house colour. The brand has now stretched into packaged foods, belts and watches. With the latter two they may learn the same lesson that Virgin learned when it went into Cola and Vodka – don’t enter a new category unless you can bring innovation to the category. Virgin should’ve launched the first Red Bull formula rather than another cola. What does Costes bring to belts and watches? It begins to look like cheap free-gift CRM travel award merchandise. The brand certainly has enormous potential for home stores based on the tasteful eclectic aesthetics of the two owner-brothers. Their first restaurant was designed by Philippe Starck and helped to propel his career to new heights. As the brand has a hotel heritage attached, as well as a highly respected reputation aside from hospitality, for travel, lifestyle and design, there is no reason why the brand could not extend into travel bags one day to challenge Vuitton, but even for this brand, it would take an extraordinary bridge to enable it to cross into the fashion realm.

The most usual bridges come about through collaborations. Harry Winston, one of the most respected independent jewellers in the world is a case in point. The haute joaillerie is all hand-crafted in New York and the company is still family owned. Ronald, Harry’s son, is the owner and Chairman. As a designer, he created jewellery which took the House of Harry Winston into modernity. Just as his father’s diamonds delighted Marilyn Monroe, the jewellery designed by Ronald Winston captivated Madonna. This small company was created and based on exclusivity, quality and personal relationships and still is. The trust of their clients is seen as an intrinsic part of the brand’s DNA. So when the Harry Winston legendary search for rarity and excellence in Haute Joaillerie was to be transferred into Haute Horlogerie, the potential was seen as limitless.

“To bear the Harry Winston name, it seemed clear to us that the product had to be exceptional. For ladies, the diamonds are truly exceptional, for men, the movements had to be innovative and exceptional,” says Maximilian Busser, Managing Director of Harry Winston Ultimate Timepiece SA Geneva. “Because we are jewellers, we have to overcome a certain amount of skepticism towards our watch-making creations. This gives us one more reason, not that we needed it, to create very innovative timepieces that separate themselves from the rest of the 200 year old house-hold names. We have lead this way since our first watch, the double retrograde perpetual calendar, and have created one watch-making world premiere every year since 1999. Our team now has the definite feeling that the world of connoisseurs is waking up to this fact. A weakness of the company? Some would say that we are not easy to find. Be it for a Harry Winston piece of jewellery or a timepiece, because we are, and want to remain, very exclusive.”

The Source
It is worth noting that many leading fashion brands started with bags or moved very quickly into bags. Vuitton, Gucci, Prada, Hermes, Bottega Veneta, Loewe, Fendi and the list goes on and on. “A lot of those companies cannot service the clothing business effectively”, says Chan of Ports in China ”They have to choose a lazy way which is bags and those don’t change for two or three years. So they create fuss with these bags. Clothing requires a lot of fine-tuning. Can you react fast enough with stuff that sells well? “ That being said, clearly it is easier to launch bags first, make profits and then extend into fashion.

It is important to recognise too that when a founder is alive and is creating his brand DNA along with his own life, such as as Richard Branson, he is able to bridge product categories far more easily than is the case when a brand is ‘brand managed’ by employees for example taking Virgin from a record label through to offering space flights. I cannot imagine the CEO of EMI records proposing to the board that the company start an Airline business. Most of the brands shown in the above Brand Stretching Matrix, are owner-managed, so in fact, they can choose to break almost any branding rule at a whim but unless they have the personal brand charisma to do it, they should beware. We would quite easily accept seeing the name Karl Lagerfeld on almost anything creative including a photo studio but only because he has already developed his reputation in that direction. We love those personality brands too because they are not faceless corporations. We can share in the fun, excitement and adventure of those characters. We can’t feel the same for the tycoons. We want owners to be fully supportive of only one brand, just as we are! Put one face to one brand, and preferably the creator’s. One griffe!

This does not mean that the days of the broadly diversified brand is over but we should be aware that specialisation could imply a more focused promise, a focused brand identity and therefore more authenticity, credibility and integrity. To stretch or not to stretch depends totally on what your actual promise is. If your brand started out as a specialist making something, such as timepieces, then no doubt diversifications would have to be taken in small steps that hold onto and reinforce some core attribute such as ‘precision’ or ‘precious metals’. If, on the other hand, your brand is built on a philosophy or ideology, it will be more able to stretch across any product market category without harming the brand’s integrity because its roots are linked to a single focused ideological identity instead of a product-focused identity. An easy case in point is Easyjet that suggests uncomplicated and affordable. With that promise it could stretch into anything from Easycars to Easymobile telephones. For obvious reasons it cannot stretch into Easygirls – they will always remain complicated and unaffordable!

Clearly, the ‘gaps’ will always exist in the consumers’ minds and the only way forward for the strategic thinkers is to find ways to create bridges or tunnels. Brand extensions will always be about that.

The success of retailers such as Colette and L’Eclaireur are examples of this. They can do anything from clothing to music to restaurants to hotels should they wish. What they are totally clear about what they stand for. Their focus is clear and therefore the psychographic profile of their customer is clear. Here is where these brands most closely resemble magazines. The buyer acts as an editor and as one griife and face. As brands, rather than as ‘titles’, magazines tend to be amongst the most well thought-through and focused brands in the world. They tend to be designed to attract a very specific well-defined market, they have editorials which enable them to create an intimate bond with their readers. They can cover whichever subject they wish, as long as it fits with the philosophy or ideology of the title. Inside the magazine, they are seen to cover the ‘best of’ with objectivity as they don’t have to sell off the pages. These new multi-brand stores do exactly the same thing. It is not surprising then to find that they too, like magazines, attract a cult following. Stretching up or down is more more complicated as the following chapter will show.

Peter Copping, the Design Director at Louis Vuitton Ready-to-Wear, who has worked with Marc Jacobs since the beginning ten years ago, feels that “clothing heightens the level of the brand.” It’s not just a matter of stretching sideways then, in his view, fashion stretches a bag brand upwards. Like Vuitton, Bottega Veneta, Prada, Loewe and others have all done this. Fashion shows give a greater visibility and at the same time, Peter says,”the more you expand, the safer it gets,” meaning that you are no longer dependent on one market. Few stretched brands are ever market leader of any sector though. In fashion, it’s the designers who are the brand managers, not the marketing teams. It is they who dig into the archives to understand the brand’s DNA hallmarks, but is is management who decides whether the brand should stretch or not. In most instances, the minute a maison is acquired, the new owner begins to stretch it to the maximum to recover borrowings and investments.

Under the direction of PPR’s Gucci Group, which took control of Boucheron in 2000, the jeweller, Boucheron is expanding the brand into sunglasses and Vertu luxury cellphones. It may also decide to chase Bulgari down the hotel route. For some reason it just feels more authentic when the founders such as Armani and Branson stretch their brands than when new owners or licensees do. It’s a question of integrity and authenticity.

References
1. Aaker,D.A. (1991) ‘Managing Brand equity’, the Free Press, New York, p208
2. Aaker, A.A. and Keller,K.L. (1990) ‘Consumer Evaluations of Brand Extensions’, Journal of Marketing, Vol 54, Jan, pp 27-41.
3. Mihailovic, P. ‘Time to Scrap the Rules: Entering Virgin Territory’, The Journal of Brand Management, Volume 3, # 1, August 1995, pp22 (used by Richard Branson as guideline model for his Virgin brand stretching strategy).
4. Mihailovic, P. and de Chernatony, L. ‘Categorising Brand Strategies Using the Brand-Bonding Spectrum’, The Journal of Brand Management, Volume 1,#5, April 1994, pp 310-318