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Factors for Success in a Stretch Strategy

By: Arun Chogle, Client Business Partner, Nielsen India

  • Brand stretches gain share faster and build distribution quicker than new brands
  • Stretches are 2x more likely to succeed in an evolving category or one with fragmented brand shares
  • Strong parents beget strong children

In part one of the Brand Stretch Series, we defined what a brand stretch (a.k.a. brand extension) is and the advantages it has over a new brand launch. In this edition, we explore the key elements that make the brand stretching exercise a success.

Stretching is profitable, how do I do it?

The contribution of stretches is significant in the Indian marketplace and is growing. The study carried out by Nielsen, a leading global information and measurement company found a significant number of marketing practitioners who said they prefer stretching their brands over launching an altogether new brand. Besides, the in-market analysis of Indian FMCG brands showed the likelihood of success of stretches is five times greater. Despite these positives, it is important to note that the track record is still a 50 percent in-market failure rate!

To unravel the factors of success in a stretch strategy, we conducted a comprehensive exercise which involved studying 82 brand extensions across 46 categories, soliciting responses from a diverse group of marketing practitioners and analyzing consumer responses to over 65 brand stretch initiatives.

The exercise revealed crucial insights which act as a guide for anyone seeking to understand the in-market realities and increase the likelihood of success in their stretch strategy.

Download full report to learn more.