Name Game

New wine in old bottles

Mrs. Paul's Kitchens faced a dilemma. Its main product is frozen fried fish, but what should it name a new line of frozen fried chicken? Recalls Marketing Director Richard Boucher: "We decided that a chicken stick is just another flavor of fish stick and that we should go with the Mrs. Paul's name." The new commercial for its fried chicken: "Even if you don't like fish, you can still love Mrs. Paul's."

More and more companies are making the same decision as Mrs. Paul's. They are using established brand names on new products, a strategy known on Madison Avenue as "brand extension." Honda Motor Co. made sure its well-known auto motive name was prominently displayed on the firm's new power lawnmower. General Foods named its dessert-on-a-stick Jell-O Pudding Pops. Also in the testing stage: Jell-O Slice Creme, a freezer cake mix; and Jell-O Gelatin Pops, whipped gelatin on a stick. "The consumer is suspicious of exaggerated claims and therefore trusts certain brand names," says John Diefenbach, president of Landor Associates, a San Francisco design firm that advises clients on marketing.

Brand extension is basically a way to get more sales bang for the marketing buck. Experts say it now costs $30 million or more in advertising and marketing to launch a new brand nationwide, and just one item in ten survives. By presenting buyers with a familiar name, companies generally increase the chances of success. Says Edward Tauber, a University of Southern California marketing professor: "It's a method for a company to enter a new business through the lever age of its most valuable asset--the consumer awareness, good will and impressions conveyed by its brand name." Deere & Co., the farm machinery manufacturer, did not hide its marketing tactics. The slogan for its line of insurance: "Our good name is the best insurance you can buy."

Companies can also profit from their good brand name by licensing it to other manufacturers. Levi Strauss capitalized on the success of its blue jeans by selling the right to use the Levi's name on boots, shoes and special models of American Motors' Jeeps. The familiar Playboy trademark appears annually on $120 million worth of products worldwide, including gold cigar boxes in Tokyo and men's toiletries in London.

But selling new wine in old bottles has its dangers. One possibility is that the new product may take sales away from the old one. When it was introduced in 1964, Maxim freeze-dried instant coffee, which was named to trade on the reputation of Maxwell House instant coffee, stole millions of dollars in sales from the older product. Other attempts at brand extension fail because the gap between the old and the new items is too wide. Arm & Hammer, for example, unsuccessfully tried to stretch its baking-soda name to include an underarm deodorant. The company is still trying, however. It has put its name on new deodorants for carpets and cat litter.

Another risk with brand extension is that the new product will be such a flop that it will tarnish the company's original good name. A few years ago, Wyler Foods added a line of low-priced flavored drink mixes to its established lemonade brand. Not only did the new line fail to take off but many consumers stopped buying the lemonade.

Often companies discover, however, that their old image is so established that the best approach is to start over with an entirely different brand name. Campbell Soup tried test-marketing the name "Campbell's Very Own Special Sauce" for a new spaghetti sauce. It flopped. "People told us that the name made the sauce seem like it was soupy or watery, something like tomato soup," says Herbert Baum, marketing vice president. But when the sauce was named Prego, which means please in Italian, it started taking off. "It cost us a lot of money to introduce Prego," says Baum with a sigh. "But if it is successful, then we can use it as a base to extend another new line."

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