Restaurant brands on hunt for fresh territory…

By Robert Wheatley

If ever there was a subject relevant to brands today, elasticity has to be in the top 10 as businesses work overtime to uncover new markets, segments and business opportunities while consumers remain choosy and conservative in their spending habits.

The question marketers must ask themselves – how far can you go from the center of what your brand stands for? Is there a place along the path of stretching where a brand’s core equity is diluted? How do you decide where fresh business opportunities can be cultivated without risking your franchise in the process?

USA Today has an interesting story by Bruce Horovitz that chronicles the wide array of menu moves by top restaurant chain brands to attract new customers. You start to see a sort of food form encroachment begin to develop as brands add new products, adjust mainstays and expand menus to lure in more diners.

KFC goes grilling
Pizza Hut rolls pasta
McDonald’s pours espresso drinks
Boston Market tries crispy chicken
Arby’s re-casts beef sandwiches as burgers
Dominos hits subs and pasta-filled bread bowls

Horovitz wonders aloud, “could sushi at Taco Bell be next?

Marketers may agree what distinguishes brands from one another is their category leadership and distinctiveness in the restaurant trade with a particular menu item as Starbucks is to gourmet coffee. McDonald’s believes they can be effective in this space because the brand pioneer Starbucks has sufficiently elevated the espresso experience. The democratization of gourmet coffee arrives at a moment where broad market tastes have expanded far enough to embrace the richer espresso brew.

This is tricky territory. The annals of marketing are filled with attempts by brands to expand their markets that have eventually led to various forms of implosion. Once thought to be the grand experiment in the automobile industry, Saturn – a new kind of car company – makes the error of trying to trade up from its core competency as an inexpensive entry level auto brand and thus dilutes what made it famous in the first place.

Owning the reference standard for your category…

Al and Laura Ries excellent book, “War in the Boardroom” reminds us of the fundamentals of successful positioning and the goal to own key words or a concept in the consumers mind.

Energy drink = Red Bull
Driving machine = BMW
Heavy motorcycle = Harley
Search = Google
Books = Amazon
Never loses suction = Dyson
Athletic shoe = Nike

When brands in the name of innovation move too far afield of what thy stand for, the consumer gets confused, the core equity is diluted, the brand becomes less meaningful to its devoted fans.

Navigating the call for stretch…

The starting point in this conversation begins with asking this question: what do you stand for? And within that conversation remaining clear that all things to all people is a proven recipe for trouble. The consumer world today appreciates expertise, craftsmanship and uniqueness more than they desire predictability and uniformity.

Short-term gains should never be bought by mortgaging the legacy of a strong brand. So in this conversation less will always be more. Stretches must be handled with care and once on that path great discipline will be required to steer around further moves that go beyond the arena you own in the consumer’s mind. If your path remains emotionally relevant to your core competency then consumers are more likely to accept your ability to deliver well in the new business you’re entering.

The second level of assessment has to do with credibility and believability in terms of what you do best. Will the consumer accept your playing in a new segment naturally? If it feels forced or you’re treading into waters owned by another that gives question to your adjacent category competence, it may be best to forgo the potential balance sheet pluses in favor of longer term franchise building.

The preeminent goal for all successful brands – being highly differentiated. Will your plans support that objective or detract from it over time?

What’s your view on stretching?