FMCG brand extensions work better than new launches: Nielsen

Our Bureau Updated - November 17, 2017 at 09:35 PM.

Lead to faster adoption and deliver higher marketing efficiency

The research shows that brand extensions can contribute as much as 30 per cent to the parent brand’s sales. — A. Roy Chowdhury

Is it possible for consumers to accept a hair oil brand as a skin care lotion?

Parachute Advansed, the leading hair oil brand from Marico, has managed to make this transition based on insights from research firm – Nielsen.

Extensions of existing fast moving consumer goods (FMCG) brands are five times more successful than launching a new brand in India, claims a study done by Nielsen, provider of insights and information on what consumers watch and buy.

BRAND STRETCHING

According to Sameer Satpathy, EVP & Head Marketing – CPB, Marico, “We had to translate the goodness of coconut oil into a new category to leverage the strength and equity of Parachute Advansed. We had to treat this extension as a new brand and it worked for us and we managed a 6 per cent share in the first year of the launch of the product. The idea is to stretch and not strain the brand.”

In fact Nielsen’s study of top brands in 46 FMCG categories and 82 brand extensions in food and non-food categories shows that in addition to promoting brand equity, brand extensions can grow incremental sales up to 38 per cent and contribute as much as 30 per cent to the parent brand’s sales.

INNOVATION SUCCESS

“Innovations are driving FMCG growth in India,” said Arun Chogle, Client Business Partner, Nielsen India. “Brand extensions, or stretching your existing brand, increase your chances of innovation success. Not only do brand extensions leverage the equity of the parent brand, but they also lead to faster adoption and deliver higher marketing efficiency.”

The study further states that brand stretches gain share and build distribution faster than new launches.

Brand stretches are also two times more likely to succeed in a highly fragmented category. Also when the parent brand is a leader in the category, brand extensions can become successful.

>Purvita@thehindu.co.in

Published on November 29, 2012 16:44