Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Fri, Mar 20 1992 Date: Fri, 20 Mar 92 05:44:41 EST Message-ID: 03-20 0000 BONUS: What's old is new again USA TODAY Update March 20-22, 1991 Source: USA TODAY:Gannett National Information Network Hundreds of companies are repositioning, repackaging and extending their lines of stale but well-known products and trademarks these days. Bouyed by the successes of repackaged or repositioned products such as Cheeze Whiz in microwaveable packs and Ritz Bits crackers, marketers are increasingly putting new looks or reviving long-neglected brands or trademarks. Among them: Barbasol shaving cream, Brylcreem hair dressing and the Pillsbury doughboy. IS THIS REPOSITIONING AND REPACKAGING WORKING? Snack-food king Frito-Lay nearly bagged its tired Tostitos tortilla chip in 1989 after annual revenue slumped 50% from a peak of $150 million in the mid-1980s. Instead, Frito-Lay, hoping to latch on to the Tex-Mex food craze, decided to take a gamble at reviving the 9-year-old chip. It reformulated Tostito into a restaurant-style chip - doubling its size, changing its shape from circular to triangular and substituting white corn for yellow. HOW ARE THE NEW TOSTITOS DOING? Packaged in a new, clear bag with big, bolder graphics, Tostitos Restaurant Style Tortilla Chips have sizzled. Tostitos' revenue hit a record $160 million last year, although the new chip wasn't distributed nationally until June. "It proves that consumers often crave what's old and familiar," says Frito-Lay marketing chief Steve Liguori, who's now testing a lime- and chili-flavored Tostito chip. "You just have to freshen it up." WHY ARE COMPANIES GOING BACK TO THE FUTURE? "A brand name has built-in equity, with millions of dollars invested in it over time," says John Lister of ListerButler, a corporate and brand-identity consultant. "Among consumers, there's an image tucked away in the brain ready for recall, so it's fairly easy to revive a product by breathing fresh life into it." Dusting off a tired image also is appealing because of the time, expense and hassle of developing products - and their high failure rate. HOW MUCH TIME DOES IT TAKE TO BRING NEW PRODUCTS TO MARKET? For example, it took Frito-Lay just six months to get its reformulated Tostito from concept to store shelves, while its Sunchips multigrain snacks - although a success with more than $100 million in first-year revenue last year - took 10 years to develop. In fact, of 16,143 products launched last year, only about 10% were truly new. The rest were line extensions of existing brand-name products, says Gorman's New Product News Editor Martin Friedman. WHAT ELSE DOES GORMAN SAY? "These days, it can take two years and $50 million to introduce a new product and back it with a media campaign," says Friedman. "But you can have 90% of products fail. So why kill yourself introducing a whole new brand when it's so much cheaper to introduce an extension or reposition something already out there?" Case in point: Clorox's attempt to gain a toehold in the $3.5 billion (annual revenue) detergent business. Clorox spent five years test-marketing four detergents - Act, Wave, Clorox with bleach and Clorox Ultra. WHAT WERE CLOROX'S RESULTS? By 1990, a Clorox detergent was in 45% of U.S. markets. Ultimately, competition and unenthusiastic consumer response convinced Clorox that detergents didn't wash. Last year, Clorox took a $79 million charge to jettison the business. Colgate-Palmolive figured a better strategy was to buy an established, albeit undermarketed, brand. WHAT WERE THE RESULTS OF COLGATE-PALMOLIVE'S EFFORTS? The firm spent $115 million last year acquiring Murphy Oil Soap, a family-owned maker of household cleaners. Murphy, based in Cleveland, had $37 million in revenue last year. That's paltry for consumer-products giant Colgate, which posted $5.7 billion in revenue last year. But Colgate sees vast potential in the 100-year-old brand. "What's beautiful about Murphy is its incredible consumer loyalty," says Colgate spokesman Ed Fogarty. "We think that with our marketing resources, we can double or triple sales within two to three years." WHY ARE COMPANIES ACQUIRING BRAND NAMES NOW? Brand acquisition isn't a new concept. During the takeover-crazed '80s, firms snapped up dozens of big-name consumer packagers in an effort to build market share. But many companies paid so much and assumed such enormous debt to finance the deals, there was little left to keep sales humming with ads and promotions. The growth of private-label store brands, the recession and saturated markets prompted packagers to refocus on brand equity, leveraging the value of existing brands. For Pillsbury, that meant building a new media campaign around its 27-year-old doughboy. WHAT DID THAT CAMPAIGN ENTAIL? Pillsbury began a series of stop-motion animation television ads that portray the little-used doughboy as a sort of kinetic, contemporary everyman - wild and crazy musician, sunglassed hipster, skateboarder - to hawk products. Says Pillsbury ad director Greg Lincoln: "It's hard to say what he's done to boost sales, but he's part of Americana, and consumers are fond of him, and we think he's added momentum to our products." HAVE ANY OTHER BRANDS BEEN REVITALIZED? Pharmaceutical giant Pfizer boosted the 73-year-old Barbasol shave-cream line by modernizing its '30s -style barber -pole graphics and adding six fragrances and a shave gel. After acquiring the brand in 1962 and doing little with it for more than 20 years, "we realized it was a name that everyone knew, so we went from simply handling the business to aggressively marketing it," says spokesman Pat Falzone. Revenue was up about 5% to $30 million last year, vs. flat industry growth. ARE THESE KINDS OF EFFORTS ALWAYS SUCCESSFUL? Still, tinkering with an existing brand name and trying to tie it into another product doesn't always ensure success. Pfizer unsuccessfully tried to launch a Barbasol deodorant. "We learned that the Barbasol name doesn't extend to under the arms," says Falzone. RJR Nabisco, however, has had fantastic success parlaying its 58-year-old Ritz cracker into five brand extensions, which accounted for 40% of Ritz' overall $500 million revenue last year. WHY USE THE RITZ NAME ON OTHER PRODUCTS? "We're committed to new products, but new products are a lot more dicey," says Sharon Fordham, who has managed new and existing Nabisco brands. "Besides, you can have a marvelous old franchise that still has lots of life to it." HOW MUCH LONGER IS THIS APPROACH EXPECTED TO CONTINUE? Successful or not, the approach for many marketers will likely intensify. Now, many companies are streamlining product development and developing strategies to update or extend brands before they grow stale. "People are confronted with so many choices in their lives - even in something as mundane as shopping," says D. John Loden, author of Megabrands, How to Build Them, How to Beat Them. "And when there are few needs going unmet by a lack of new products, consumers will tend to stick with what they're familiar with." Bonus Editor: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. 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