Switzerland is the world's couture watch capital. A visit to Geneva and its surrounding cantons exposes the traveler to the hundreds of exotic bells made in this renowned horology center. Eponymous watch stores, displays, advertising and signs and jewelry stores are ubiquitous. Each brand is proud of the adaptation, detail, amazing complications and ancient world craftsmanship that is present in every artisanal timetable produced.
Frank Muller, Constantine Vacheron, Piaget, Chopard and many other manufacturers offer thousands of pieces to hundreds of thousands of dollars. Exclusion distribution is exercised with military-like care. In this club world, an outlier emerged in the late 1900s. The amazing Swatch Watch line was born.
Swatch is all that Audemars Piguet and Breitling are not. Mass-produced, simple mechanical movements, plastic straps, unlimited and stylish color combinations and very low price markings mark Swatch as a watch for everyone. No exclusivity here.
Swatch became an international hit almost immediately. Consumers loved the exclusive, whimsical appearance of the timeshots. And then Swatch did something that seemed counterintuitive: the company merged with Mercedes Benz to create the Swatch Automobile lineup.
Mercedes Benz and Swatch seem like strange business bed partners. And yet, this has become an international example of a successful brand extension that is mature with benefits for both companies.
Mercedes Benz has been able to keep production booming, developing manufacturing technology for small cars that can never be perfected in its high quality, exclusive luxury models, fast results and still retain its Mercedes Benz brand and heritage pristine. The car they produce is known by consumers as a Swatch car, not a Mercedes Benz Swatch.
Swatch, which does not have the capacity to produce such complex machines as cars, got the brilliance and panache of having a Mercedes Benz-made car to sell. The car's marking, the fun, hip color combinations of interior design and exterior of dot cars differ in a sea of equality, boring, even full mini-car offers. It is fun to own and run a Swatch, practically also as a miserable fuel chopper and a simple vehicle to maneuver in tight cities.
The Swatch car has further expanded the fame and brand for the Swatch Watch business. The word Swatch creates instant thoughts about bright, cool and fun products with good design signals. Swatch is by far the largest brand brand in the world.
Rossignol is a well-known manufacturer of skis. Many Olympic champions, professional and serious skiers prefer Rossignol skis to any other brand. This is one of the most well-known sporting good brands in the world.
A few years ago, Rossignol decided to have won the ski slopes, to enter another arena. They started producing tennis rackets. Rossignol tennis rackets are now ubiquitous on the men's and women's international professional tennis tours. This is another obvious example of utilizing the Brand Extensions concept to grow a mature business in another space.
Branding Extension may be detrimental to a business. A well-known example of this is the history of the glorious Pierre Cardin fashion business. Cardin was one of the earliest advocates of licensing his name. In the 1970s, Pierre Cardin annually generated over $ 400 million in sales revenue for his couture men's and women's clothing and Fragrance lines. Then the hunt for licensing began.
For a period of about 20 years, the fashion franchise that Pierre Cardin had accomplished began to crumble. The expansion of his brand became an industry joke. The previously famous Pierre Cardin logo began to appear on a series of completely unrelated, pristine, inexpensively produced products. Sports bags, running shoes, cheap Asian bands, mass market products, bath towels and hundreds of other products began to flood discount stores with low commodities carrying the iconic PC logo. Department stores and luxury stores noticed and interrupted the Pierre Cardin lines that they had been proud of for years.
Mercedes Benz has improved its business by expanding into a partner with Swatch. Pierre Cardin did not polish his brand and his extension to rubber flip-flop-type products meant death to his fashion house.
Brand Extension is a technology that has been practiced on products and for the customer's consumer brands for many years. It is a wonderful way to grow a mature business. But remember that brand extension must be meaningful for your most important asset, your customers and customers. Do no harm!