Switzerland is the capital of world couture. A visit to Geneva and its surrounding cantons provides the traveler with hundreds of exotic watch brands made in this famous center of watchmaking. Event stores, displays, advertisements and billboards and jewelry stores are ubiquitous. Each brand is proud of the customization, detailing, amazing complexity and skill of the old world, which are present in every made-up time.
Frank Muller, Konstantin Vacheron, Piaget, Chopard, and dozens of other manufacturers offer pieces that sell for thousands, to hundreds of thousands of dollars. Exclusivity distribution is practiced through a military approach. In this club world, at the end of the 20th century, a storm appeared. There was an amazing line of watches Swatch.
Swatch is everything Audemars Piguet and Breitling don't have. Mass production, simple mechanical movements, plastic bands, unlimited and vibrant color combinations, and very low retail prices indicate Swatch as a watch for everyone. There is no exclusivity.
Swatch became an international hit almost immediately. Consumers liked the freaky, freakish look of the time. And then Swatch did something like an intriguing one: the company merged with Mercedes Benz to create the Swatch car line.
Mercedes Benz and Swatch seem strange partners in the business bed. And yet it has become an international example of successful brand extension, which has matured with benefits for both companies.
Mercedes-Benz was able to preserve the prosperity of production, develop the production technology of small cars, which could never be improved at their high end, exclusive luxury models, bring profit and still retain their name and the legacy of the Mercedes Benz brand. The car they produce is known to consumers as the Swatch car, not the Mercedes Benz Swatch.
Swatch, unable to produce such complex cars as cars, acquired the brilliance and smell of what Mercedes-Benz was selling. Branding cars, fun, hip-color combinations of interiors and exteriors of Swatch cars stand out in the sea of the same kind, boring, even ugly offers for mini-cars. It’s nice to own and drive a Swatch, also practical as a meager fuel syringe and easy to maneuver in crowded cities.
The Swatch car further expanded the fame and branding of Swatch watches. The word Swatch itself creates instant thoughts of bright, cool and fun products with excellent design replicas. Swatch is by far the best-selling brand in the world.
Rossignol is a renowned ski manufacturer. Many Olympic champions, professional and serious skiers prefer Rossignol skis to any other brand. It is one of the most famous sports brands in the world.
A few years ago, Rossignol, having conquered the ski slopes, decided to enter another arena. They began to produce tennis rackets. Rossignol tennis rackets are now ubiquitous in men's and women's international professional tennis tours. This is another obvious example of using the concept of brand extensions to develop the business of mature firms in a different space.
Branding Expansion can be detrimental to a franchise business. A famous example of this is demonstrated in the history of the venerable fashion business of Pierre Cardin. Cardin was one of the first proponents of licensing his name. In the 1970s, at his zenith, Pierre Cardin annually produced more than $ 400 million in sales of his male and female models of clothing and couture accessories. Then began the hunt for licensing.
For about 20 years, the fashion franchise that Pierre Cardin had pretty well built began to crumble. The expansion of his brand has become an industry joke. The previously famous Pierre Cardin logo began to appear on a variety of completely unrelated, unfashionable, cheap products. Sports bags, sneakers, cheap Asian ties, mass-market plastic utensils, bath towels and hundreds of other products began to flood discount stores with low-income goods that carry the iconic PC logo. Department stores and luxury boutiques took note and stopped the lines of Pierre Cardin, which they had been leading with pride for many years.
Mercedes Benz has expanded its business by expanding to a Swatch partner. Pierre Cardin did not defend his brand, and his extension to rubber flip-flop products meant death in his fashion house.
Brand extension is a technology that has been practiced for many years on consumer products and brands. This is a great way to develop a mature business. But remember that brand expansion should make sense for your most important asset, your customers and clients. Do no harm!
