June 2009

Does a Megabrand =
Megasuccess?

Copyright ©2009 The Nielsen Company. All rights reserved. 1

Introduction
A variety of forces (fragmentation, shrinking store footprints, commodity cost spikes, stretched
consumers, etc.) are bringing increased attention on assortment from retailers and unique
pressures on profits in the U.S. CPG industry. As marketers form business plans to address these
issues, a recurring outcome is attempting to produce more efficiency from fewer brands. This
gives rise to a heightened interest in the notion of “megabranding” from marketers as a way
to economize costs and grow broader, stronger franchises that can be more resilient to these
forces.

This paper summarizes Nielsen’s collective marketplace learning on megabranding and offers
advice in developing effective megabrand initiatives.

Is it a Megabrand? Yes What do we mean by

No megabranding?
Maybe Megabranding can mean different
Brand Yes/No/Maybe Comments
things under different contexts.
Crest Presence across many oral care categories For purposes of discussion, we are
including toothpaste, whitening kits,
and oral rinses. defining megabranding as the
application of a brandmark across
Clorox Broad use of the megabrand across laundry,
home cleaning/disinfecting, and small multiple consumption
durables opportunities or need states that is
Pepperidge Farm Variety of products in bakery, cookies, not a category norm.
crackers and snacks
Note we are including a qualifier
Dove Extended across a variety of personal care around “category norm”. By this,
categories, including body care and hair care we are alluding to the fact that, in
some categories, all major brands
Budweiser A huge, successful brand, but extensions
offer product ranges that cross
only into different segments of beer
need states. For example, nearly all
hair care brands have shampoos,
Cheerios The dominate RTE cereal brand with a number
of strong extensions, but within the category conditioners, and styling aids.
Nearly all bakery brands offer a
Coca Cola A global powerhouse contained in range of breads, buns, and other
carbonated soft drinks rolls. Playing by the category’s
norms, even if this means crossing
Olay Plays successfully across many tiers in facial
over consumption opportunities,
skin care, but debatable whether the equity
stretches further would not fit our working
definition of megabranding.

Copyright ©2009 The Nielsen Company. All rights reserved. 2

Why pursue a megabrand
strategy?
We often see marketers consider
megabrand strategies in light of the
potential for marketing and
operational efficiency across a
number of fronts.
• Media – to the extent that a spot
can support multiple
complementary items under an
umbrella strategy, the potential
exists for greater ROI behind
media support.
• Copy development – given the
high cost of producing any form
of ad copy, collapsing the number
of creative executions needed
presents a good opportunity for
savings.
• Trade line promotion – folding
multiple products into more
impactful trade promotions likely
results in improved efficiency and
compliance.
• Consumer promotion – consumer
promotions also can be bundled
to improve efficiency and
breakthrough.
• Leverage transaction size vs.
penetration – Many of these
efficiencies align with the
consumer behavioral insight that
it may be relatively easier to get a
brand’s current consumers to buy
more of the brand than to gain
the same volume increase from a
new buyer.
Net, there are many good reasons to
think about this strategy. However,
along with the financial and
operational efficiencies, it is just as
important for the strategy to be
informed by the consumer issues
posed with megabranding.
How can megabranding result
in sustainable competitive
advantage?
Potential efficiencies are important
and valuable, but are rarely enough on
their own to offset the risks
associated with branding decisions.
For a megabrand to be a megasuccess,
the consumer rationale behind the
strategy needs to be as compelling as
the efficiencies. Volume growth is
realized from a megabranding
strategy when the consumer
foundation is strong, supported by an
efficient marketing program.
Coming to terms with brand equity
The first step to crafting a winning
consumer-based megabrand strategy
is to get the brand’s equity right.
Being realistic about the brand’s
meaning and where its strength
resides is a critical stress test in
developing the strategy. While this
sounds simple in theory,
. . . we believe that
misreading the brand’s
meaning is the single
biggest strategic error in
megabrand strategies.
When this mistake is made, brands fail
to meaningfully connect with
consumers as they migrate into new
categories, sometimes with disastrous
outcomes. For example, the Gatorade
equity was likely misread in its failed
attempt to extend into meal bars
(2001). We believe that one of the key
reasons is that Gatorade likely stands
for “hydration” rather than “nutrition”
or “performance” and likely did not
form a solid link to the meal bar
category in consumers’ minds.
Copyright ©2009 The Nielsen Company. All rights reserved.
Many brands have access to equity/
tracking study data. These will often
include a mix of perceptions, some
that are very specific to the brand’s
role and others that are important but
more generic, like “high quality”, or
“brand I trust.” These generic
perceptions are usually not sufficient
for exporting the equity to an
adjacent or new category, yet we
sometimes see brands attempting to
extend without specific equity that
can propel a successful adjacency.
• For example, a brand like Chiquita
has struggled to gain strong
footing outside of its core
category, as in most consumers’
minds the brand probably stands
for “bananas” vs. something
bigger like “freshness”. While
Chiquita is a very well-known,
trusted brand, it has struggled to
support adjacencies.
• Dove, on the other hand, has a
very identifiable benefit with its
link to “moisturization.” This has
allowed Dove to expand into
categories like hair care on the
basis of the unique moisturizing
benefits associated with the
brand.
The fact of the matter is that most
brands lack distinctive, specific
perceptions with consumers.
R&D from the Ehrenberg-Bass
Institute has shown that most brands
within a category do not differentiate
on the basis of specific attributes or
associations. In their report on Brand
Salience, the authors mentioned
“Whether your brand is large or small,
only a very small proportion of your
customer base actually cares about
your brand. If your brand were taken
off the market few customers would
3
grieve. Most would just buy
something else, some without even
noticing.” Brands do differentiate on
their propensity to be recognized and
recalled in buying situations, but their
specific features are far less known.
For this reason, many brands do not
have a strong opportunity for
generating competitive advantage
from megabranding. (Brand Salience and Why It
Matters, Ehrenberg-Bass Institute Report, 16 March 2004.)
Net, the basic foundation of an
impactful megabranding strategy
starts with identifying a unique and
ownable equity for the brand. These
opportunities are not commonplace.
Executing the strategy successfully
beyond this involves choosing wisely
where the brand’s unique equity can
be relevant and leveraged for a
competitive advantage.
Efficiency plus unique consumer
relevance = the big win for a
megabrand
Brands deliver consumer value from a
simple hierarchy of benefits. The first
level is from the ability to establish
credibility to the proposition. Most
often, brands that are well-known can
enable this credibility with consumers,
as long as the brand’s equity is
relevant to the destination category.
But in most megabranding strategies,
the marketer has more aggressive
objectives than just establishing basic
credibility. Impactful megabranding
strategies will leverage perceptions
benefit that can be transferred to
build competitive advantage in
another category. Beyond just being
well-known, the equity ideally brings
a unique benefit to the destination
category.
For example,
• Special K snack bars (launched
2002) have been a major success
for Kellogg – the meal bar
category was well-populated prior
to this entry, but Special K
brought unique health and weight
management benefits to snack
bars and were a great fit with the
lifestyle and habits of the brand’s
target.
• Unilever’s Bertolli Dinner for 2
(launched 2005) developed a
unique position around
authenticity and quality to
develop a new segment within
the frozen foods category.
• Crest’s successful entry in 2001
into home whitening kits was
brilliant in many ways, with the
Crest equity and its clinical angle
BASES ® Competitive Insights Analysis
Performance by Brand
Potential
for
Activation
playing a strong role. While other
oral care brands also have
strengths, we believe that few
could have supported this
proposition and developed this
new category as effectively as
Crest.
• On the other hand, Olay’s entry
into cosmetics (Oil of Olay Color
Collection, 1999) failed. While
Olay is a very strong brand with
multiple extensions in facial care,
its equity brought nothing
uniquely relevant to the
competitive cosmetics category.
Destinations for megabrand equities
often call for activating a secondary
consumer driver.
Capitalizing on megabrand
opportunities often involves
redefining the importance of the
various “rules of the road” within a
Category. In a practical sense, this
often means that the marketer needs
to grow the importance of a
secondary consumer need to be more
relevant to a consumer’s category
+
Average

that are specific to the brand in a way

that truly enhances the consumer
value proposition. In this way,
successful megabrands are built on a
foundation of “unique relevance.” In
the context of megabranding, the -
Driver #1 Driver #2 Driver #3 Driver #4 Driver #5
principle of unique relevance means 37% 19% 17% 16% 6%
identifying an ownable consumer
Market Leader Brand #2 Brand #3

Copyright ©2009 The Nielsen Company. All rights reserved. 4

purchasing. We like to refer to this
process as “activating” a secondary
consumer driver.
In forming a megabrand strategy, it is
very useful to establish a foundational
understanding of how consumers
make choices in a category, using
some variation of a market structure
tool. The competing brands can then
be mapped to their performance on
these drivers to understand
opportunities. For most categories,
the largest brands are typically going
to exhibit strengths on the category’s
most relevant needs. Successful
megabranding applications often are
the result of leveraging a brand’s
unique relevance to activate needs
that were less influential because no
brand was currently focused on that
need. Critical examination of why the
brand would be expected to drive
competitive advantage in the
destination category cannot be
underestimated.
This is the single biggest
bet in megabrand
strategies. Impacting the
relative importance of
consumer drivers within a
category is not simple.
Brands that have done
this successfully tend to
have both a strong core
strategy and also a
sizeable marketing
investment to energize
this shift in consumer
thinking and behavior.
Examples include:
• Clorox has both capitalized on a
mega trend and further activated
the sustainable/eco-friendly
driver in home cleaning with
Green Works (2008). Being the
first mainstream brand to really
leverage this position involved
getting a substantial proportion
of the market to think differently
about these categories, but Green
Works has effectively done that.
In fact, in its first year, Green
Works generated volume
significantly higher than the
established leader in the eco-
friendly cleaner segment and
helped grow the environmental
cleaner category by around 40
percent.
• P&G has had considerable success
extending the Febreze brand into
multiple new value-added
extensions in the air care category.
Febreze Air Effects, the initial
venture of Febreze into the air
care category in 2004, was able
to drive sales growth in the
mature instant action segment
and now holds around a 25
percent share of the instant
action category. The new Febreze
air care products have succeeded
in part by activating a
contemporary/modern driver that
was underserved by the
established brands in the category.
• While Crest successfully leverages
its clinical equity to develop home
whitening, this same driver seems
to be far less relevant and
represents a smaller opportunity
in mouthwash for its 2005
Pro-Health launch that has only
been able to capture around a 7
percent share. It is important to
note that even megabrands can’t
Copyright ©2009 The Nielsen Company. All rights reserved.
stretch in an infinite number of
directions
Equity transfers to establish credibility
are useful for underdeveloped
markets and segments.
A less difficult branding decision is
when a market is underdeveloped and
can benefit from just the goodwill of a
credible brand being offered in the
space. In these cases, the expected
return may be more modest, but this
strategy can be enacted relatively
quickly and with less risk. If the
brand’s job is simply to address the
credibility hurdle, then the primary
positioning question is to be sure that
the extension itself doesn’t pose risks
for negative halo against the
megabrand.
This situation arises more commonly
in cases of technical innovation or
developing trends.
• A good example is how a number
of established brands successfully
developed the daily shower
cleaner category in the United
States in the late 90s. While a
fledgling brand (Clean Shower)
was slowly building the category,
once Tilex, Scrubbing Bubbles,
and Lysol entered, the category
was legitimized for consumers
and volume responded.
• Mr. Clean’s expansion outside
dilutable cleaners provides
another good example. Mr.
Clean’s equity arguably centers on
the more basic benefits of
cleaning efficacy. It might be
difficult for Mr. Clean to deliver
any sort of competitive advantage
into adjacent established
categories with only cleaning
ability working in its favor.
However, P&G has chosen to tie
5
 the Mr. Clean brand to very
innovative products like Magic
Eraser and Home Auto Wash
Systems, where its cleaning
equity and high recognizability
add value. By leveraging the
brand’s credibility behind these
stretch innovations, the
megabranding strategy has been a
success for Mr. Clean.
Opportunities are not
limited to brands that are
wildly successful from a
sales standpoint; the key
is to have a strong equity.
It is logical to look to the brands with
the strongest sales rates as the best
potential candidates for extension and
megabranding. All other things being
equal, we do believe that bigger is
better in this context. But we do not
believe that brand sales are
necessarily the most critical factor.
A strong and specific equity may be
the more important issue for creating
a megabrand platform. So, looking
first to the specific equity and how
that is relevant and transferable to a
different category is the key. Many big
brands do not have the flexibility for
megabranding, but some smaller
brands might.
Mr. Clean provides a good example of
this principle. Mr. Clean was a
relatively small volume brand in the
United States through 2002, mainly
selling dilutable cleaners with a share
of 10 percent. But, the brand had very
broad awareness and recognition, a
strong cleaning equity, and an iconic
visual equity. When P&G launched
Magic Eraser in 2003, it effectively
leveraged the base equity to both
establish credibility for this novel
product and generate good efficacy
expectations with consumers. The
product was a strong sales performer,
easily outselling the base Mr. Clean
cleaners in its first year.
Since then, the Mr. Clean equity has
also been successfully extended into
DIY car care kits along with a licensed
retail auto wash. Today, the sales for
the Mr. Clean equity are nearly
$120MM* almost double where sales
stood prior to these adjacent category
extensions. All this from a base brand
with only 10 percent annual
penetration. The lesson learned is that
brands can be reinvented with a
megabrand approach, but a strong
technological or marketing disruption
may be a necessary catalyst.
*U.S. food, drug, and mass outlets (including Wal-Mart)
The best megabrand candidates
transcend functional equities.
As we survey the market, we are
struck by the number of successful
megabrands that have very unique
equities that stretch across fairly
broad space.
Copyright ©2009 The Nielsen Company. All rights reserved.
For example,
• Nike = high caliber athletic
performance
• Gerber = the American baby
• Special K = a weight management
lifestyle
• Healthy Choice = balancing good
for you and good taste benefits
across a wide range of foods
These brands have strong
transferability in part because they
have equities that are specific but also
applicable to a wide range of
applications. This also highlights how
challenging megabranding is for most
brands. Only a select group of
well-tended brands have this sort of
flexibility and meaning to be a viable
megabranding candidate.
What makes for a winning
megabrand execution?
Money changes everything
Since consumers don’t put strategies
in their baskets, megabranding
programs are only as effective as their
accompanying marketing support. We
don’t believe there is a simple one-
size-fits-all approach when it comes
to support, but one finding is clear: it
is difficult to find examples of
successful megabranding that don’t
involve meaningful marketing
investments.
Most marketers do not employ
megabranding as just an efficiency
play. Rather, they view it as an
opportunity to play offense and grow
volume and share. Because this
strategy is so often played with a
heavy spending hand, the strategic
implications can get blurred.
Remember, heavy spending can
compensate for weaker fundamentals.
If you can afford to overinvest, then
6
topline objectives can be met even
with a plan that is flawed. On the
other hand, recognize when you are
not planning to invest heavily and
place a greater imperative on getting
the strategy right.
• An example of this may be
Gillette’s aggressive push in male
cleansing and grooming. This is
not meant to be a comment on
the Gillette equity per se, but
when a brand is investing so
heavily to grow a category, the
equity’s unique contribution is
less clear. Around $37MM in
measured media was spent on the
Gillette hair care extensions in the
past year. The relevance of the
Gillette equity outside of shave
products may be “forming on the
fly” as it continues to benefit
from aggressive investment
spending.
Transferring an equity to a new one is
challenging and must be treated as a
new brand from a marketing P.O.V.
Most often, megabranding is executed
as an extension. Under this model,
marketers instinctively think and act
as if they are launching a new item.
This usually involves the new product
paradigm of investing in awareness
and trial through media and
promotion, and a close eye on
ongoing consumption and repeat
purchasing.
Occasionally, a megabrand strategy is
implemented as a swapout of an
existing equity for a megabrand. This
approach is not used frequently, but a
timely example exists in dish care
where Reckitt-Benckiser is attempting
to migrate the Jet-Dry brand for the
Finish brand on its rinse aids, and also
convert its Electrasol detergent to the more specific purposes. For closer-in
Finish franchise. As the Finish adjacencies like the automatic dish
branding is being implemented, there detergent and rinse aid, a combined
is a visible co-branding at least for an copy strategy may be effective. But
introductory period and advertising stretching megabrands further out to
for the Finish brand has ramped up to different usage contexts will likely
around $38MM with a substantial necessitate more dedicated copy in
portion of that spending being order to achieve growth. Getting
focused on the equity transfers. carried away with efficiency can
jeopardize individual segments, and
We believe this co-branded approach family advertising has only a narrow
is wise, as it helps provide clarity for purpose.
consumers of the Jet Dry and
Electrasol brands. If approaching this Successful megabrands also tend to
transition more aggressively (e.g. have friendly neighbors.
forgoing the co-branded presentation), A move into a new category often
the marketing investment would need puts even the biggest brands at a
to be much higher to compensate for competitive disadvantage. The current
higher consumer confusion and players in the category have
attrition. At any rate, given the longer established relationships with retailers
purchase cycle, this transition will and can leverage these relationships
take time for the consumer to turn for preferential shelf space, speedy
over to the new branding. distribution for new items, and quality
promotional support. These
Copy halo is good, but it remains established players also have years of
necessary to create consumer demand knowledge around how to
via a strong marketing push. successfully compete in the category.
If relying on megabranding to drive One observation we have made is
growth, an over-reliance on family that many of the megabrand
media or
promotion is
likely to fall Average Year I Media Spending
short of goals.
$25
Most successful
megabrands do $20
not place great
weight on family $15
messaging. In
$10
most cases,
consumers $5
already know the
base brand – $0
they’ll need to Successful Adjacent Failed Adjacent
be educated and Brand Extensions Brand Extensions
convinced on the Sourced from Nielsen Media data to help examine the success drivers for
megabrand’s launching brands into adjacent categories. In this analysis, successful extensions
are defined as those that maintained stable distribution for two more years
relevance for after launch.
Copyright ©2009 The Nielsen Company. All rights reserved. 7
successes are moving into close
categories where the marketer has
experience and other “sister” brands.
This facilitates successful trade
execution and builds on established
trade/buyer relationships. For
example, Crest is probably in a better
place to extend to the mouth rinse
category given the marketing
knowledge and retailer relationships
P&G has built through marketing
Scope. Similarly, Kellogg’s experience
with Nutri-Grain likely facilitated a
less complicated entry for Special K
into the cereal bar category. In
addition to these marketing and retail
advantages, manufacturing synergies
may also be enjoyed by staying in
categories familiar to the
manufacturer.
Even when the strategy is right,
competitive reaction can be
overwhelming.
Like all new product activity, success
in megabranding relies on a delicate
balance of relevant insights, sound
strategies, and strong execution. Even
when these elements are in place, the
severity of competitive reaction can
be difficult to anticipate. Higher
quality initiatives are likely to provoke
even more powerful competitive
response.
Clorox had what appeared to be a
strong entry in the disinfecting spray
category in 1999. The equity was
highly relevant, the space had only
one major branded player, support
was compelling with a unique claim,
and there would certainly be
efficiencies within the megabrand’s
marketing approach. However, given
the clear threat to the Lysol business,
Reckitt-Benckiser responded
extremely aggressively to defend the
franchise, working to negate the About the Authors
claims and promoting with the Trade Rob Mooth
and consumers. By the Clorox' second Rob has worked in packaged goods
year, dollar volume had fallen 40 marketing for 20 years, with a variety
percent and continued to decline at a of roles in brand management, market
similar rate into its third year.* research, and product development.
*Sales in FDM less Wal-Mart.
He has been with Nielsen for 11 years,
mainly in its BASES Client Consulting
Conclusions
Group. He has helped bring dozens of
Megabranding can be a successful
new products to market successfully
strategy for generating marketing and
and has authored a range of papers
operational efficiencies as well as
and articles on topics related to
overall brand growth; however, to
innovation. He is currently the Vice
realize these advantages, the strategy
President, Cincinnati Region Manager.
must be navigated carefully. A
He holds bachelor’s degrees in
successful strategy requires that the
Economics and Chemistry from
manufacturer clearly understands
Indiana University.
what the brand stands for in
consumers’ minds and makes the
Mike Asche
right choices on where the brand’s
Mike has been with Nielsen for 13
unique equity can be relevant to the
years and has consulted on successful
category and leveraged for a
innovations across a wide range of
competitive advantage. Successful
CPG manufacturers and categories.
megabranding also requires a
He is a Vice President in BASES Client
commitment to support the brand as
Consulting Group. Mike holds a
it works to extend itself into new
bachelors degree in Marketing from
categories and usage states. When a
the University of Kentucky.
manufacturer can identify the right
equity, leverage it in a relevant
category in a relevant way, and
vigorously support the initiative as it
extends into new categories, the
ingredients may be in place to turn a
megabranding strategy into a
megasuccess.
Copyright ©2009 The Nielsen Company. All rights reserved. 8