The famous and annoying catch cry, “down, down” and the big red finger might actually carry far greater symbolism for Coles and their reputation than they realise. As the brand becomes more elastic and focuses on ‘stretch, stretch how far can we stretch’, could this strategy actually bring the brand down or is Coles setting a new benchmark for Australian brands?

Companies are always seeking new ways to grow and expand but when brands start to develop a bigger range of products, there is a danger of stretching the brand too far. Extensions can have a knock on effect that confuses the brand’s identity, its customers and can potentially leave the brand open to attack from more focussed competitors.

Great brands have always been created from a single minded and compelling idea, a distinct aspiration to ultimately lead the pack, not follow. But every extension can dilute the core values of a brand a little bit more. Unless it remains true to the core theme, far from building long term growth it may well have the opposite effect on the brand.

For brand stretch to be successful, the new product or service needs to relevant, credible and provide beneficial transfer that will continue to build the brand’s unique story.

Apple famously shifted from an IT brand to become the ultimate representation of clever technology and communication convergence. The brand now is the benchmark for not only computers but also music players and mobile phones. But this has always been driven through a passion to think differently and be the intuitive soul of technology.

Virgin has taken a slightly different approach, shifting away from product alignment towards specific notions of a rule-breaking, dynamic category challenger. But this is always driven by consistent values and a strong philosophy to be the consumer champion whether it is an airline, radio station, telecom or even health insurer.

Coles has continued to extend its red finger beyond food and challenge what the brand represents to stretch into fuel, florists, credit cards, clothes and now insurance.

Their first flirt with Shell ticked all the boxes. A co-branding between Shell and Coles Express changed not only the supermarket rules, but also the petrol market. Moving into petrol and convenience retailing seemed was mutually beneficial  for both Coles and Shell. For Coles, it provided greater brand exposure and a sense of benefit for consumers. For Shell, more loyal traffic as well as ‘supermarket’ credibility for their convenience offering.

The success of the fuel partnership forced Woolies to race into bed with Caltex and the remaining chains have now all scrambled to form petrol and supermarket partnerships.

The Coles Source credit card again linked to a clear consumer benefit through loyalty points and provided by GE Money.

Now Coles is at again, this time challenging the insurance giants with Coles Car Insurance and Coles Home Insurance.

But the credibility of the “down, down” people providing insurance may be too much of a stretch. A grudge purchase for most of us, insurance is still something that we expect significant expertise, credibility and experience. Does a supermarket have the credibility to provide this?

Coles’ sister brand Wesfarmers Insurance is behind the offer. This does provide some credibility but as a rural insurer, it seems more likely a strategy for Wesfarmers to use Coles to build their consumer insurance business in the city.

While it might make sense for Wesfarmers Insurance, does this add to the Coles brand or will potentially confuse people about what Coles stands for?

To sell us the brand association, the Coles tagline has been tweaked from “where quality food costs less” to “Australian families deserve quality car insurance that costs less”. It’s a clever play on the tagline. However, time will tell whether the equity transfer works and Coles is credible in providing car or home insurance or this potentially dilutes the Coles brand.

Whatever happens, I’m sure Woolworths will be watching closely with a green boxing fist ready. Although, it might be more challenging to find an insurance link with “the fresh food people”. Or, will they just let Coles do the work and then jump on the bandwagon with “that’s my insurance”.

How do you feel about a supermarket providing car or home insurance? Are Coles trying to stretch their brand too far?

I’d love to hear your thoughts.

Michael Hughes
Director of Brand Strategy

The Code of Great Annual Reporting
For 20 years we have been developing corporate brands and communications. Our work has seen
us decode much of the brand and corporate communication landscape, working for businesses across all sectors operating in national and international markets.

AR:ReView is the culmination of us turning our decoding methodology towards defining the a market oriented criteria for creating annual reporting content to global best practice standards.

As we lead the thinking for our clients on their brand definition and communication, we see AR:ReView as a natural extension of how their brands connect with their shareholders and stakeholders, answering the questions:
• How can shareholder reporting be more informative
and accessible?
• How can we best provide the information investors and the market value, in a format that is more engaging, more functional, and easier to understand?

An Overview – The 5 fundamentals of great annual reporting
If you adopt just five of the best practice principles for improving the communication of your next
annual report, here’s what they should be:

01. High Level Information
Does your report provide a summary of performance for each area of business performance with highlights of the year’s major milestones. Make this information graphic, eye-catching and easy to grasp.

02. The Big Picture
Market intelligence plays a vital role in the life of every organisation. Does your report provide your shareholders with a qualified market perspective?

03. Measurable and Comparable
Does your report clearly identify the key performance indicators for your organisation? Does it compare your results for these KPIs against previous years performance, and against the market?

04. Forward Thinking
Insight into an organisation’s vision for the future is highly valued in the context of shareholder communication. Does your report communicate where you’re heading and the challenges you will face in getting there?

05. Text Appeal
Whilst all successful organisations present themselves in a professional and appealing manner
across all their activities, their annual reports are often the exception to the rule. Does your report present your organisation in a professional manner that reflects it’s standing in the business and investment community?

Working Together to Create Better Annual Reports
If you’d like to read more, click on the pic above to download a full copy of the AR:Review, including an audit of the 2009 Annual Reports of Australia’s top 10 publicly listed Companies.

In 2009 we worked with several clients to shift their reports to our new framework. We’d love to run through them with you to get your thoughts, and to discuss how this framework can make your 2010 annual reporting both easier and more effective. Interested? Why not get in touch?

Cassandra Gill, Design Director.

The RACV has provided us with a perfect example of a brand extension with a product that leverages all the good work they’ve done building a reputation based on simple products you can trust and a great service ethic. The product is RACV home cover. It must be good because so far I’ve only heard it promoted on radio and yet it stuck in my mind.

For $142 per annum you get eight call outs for emergencies in the home and they’ve picked a few goodies – the sort of things that sneak up on you, and strike when you are least prepared, like the heating not working, smelling gas or a gutter flooding the lounge room. Of course they’ve also included being locked out – so now the same organisation that you trust not to snigger at you when you lock your keys in the car can help you when the front door slams behind you as you rush out in your jim jams to get the post.

This is really smart marketing, showing a keen understanding of their brand image it adds to the RACV’s credibility and enhances its brand reputation.

Brand extension works best if :

(1) It builds upon your existing brand essence, value and personality;

(2) It has a creative connection to what you’ve done before in the use of language, imagery, colour;

(3) It appeals to the same audience that you have served before

(4) and meets a need of that audience

Understanding how far to push brands and remain relevant is an obsession with us, if you’d like to discuss your ideas for how far you can take your brand – why not give us a call.

Malcolm Harvey

A Trusted & Loved Brand
Arguably, Australia only has a handful of iconic brands; brands with a rich history and tradition, brands that are recognised, trusted, and understood by customers around the country. Goulburn Valley could well stake claim for being one of those brands. I grew up eating Goulburn Valley tinned peaches and pears for dessert. Mum trusted the brand to feed us kids, and that was good enough for me. Goulburn Valley earned a place in the hearts and minds of many hundreds of thousands of Australians.

As a brand, Goulburn Valley has always had a clearly proposition: fresh fruit – pears, peaches and apricots, grown by Australian Farmers, picked from the orchards around Goulburn, and canned in their own juices – sweet, syrupy goodness.

Waiter, There’s Some Milk in My Fruit
So Imagine my confusion the other day when I came across an add for Goulburn Valley flavoured milk. Flavoured milk? From Goulburn Valley? ‘Isn’t Goulburn Valley a fruit company?’ I heard my subconscious ask itself. ‘Isn’t Goulburn Valley all about sweet, syrupy peaches, pears and apricots? What’s all this about milk and banana and chocolate and iced coffee??!!’

Stretching your Brand
Some brand extensions when launched make perfect sense, like the reality TV franchise ‘The Biggest Loser’ launching weight loss centers. The Biggest Loser has earned enough credibility in the weight loss space, that even from a starting-point of reality TV, I think they’d make a pretty good fist at helping the rest of the world lose weight. We wrote an article earlier this year about how effective brand extension can be as a business strategy when it’s done right. Then there are the other kind of brand extensions, the ones that make us go ‘Hmmmm, I’m not sure…’ For Goulburn Valley the tinned fruit people to make the brand stretch to Goulburn Valley the flavoured milk people was going to require an explanation.

The Stretch from Tinned Fruit to Flavoured Milk
One of the advantages of brands who have established an emotional connection as Goulburn Valley had with me over my childhood, is that they have points on the board. If they do something unexpected, something off-brand or disappointing, we’re far more likely to give them a second chance than we would with brands who lack the same level of relationship. So as uncertain as I was of Golbourn Valley’s foray into flavoured milk, I was looking forward to hearing the story that would connect their tinned fruit heritage to their new dairy drink expertise. What magic connection had Goulburn Valley identified that would have me believe their brand expertise would make that stretch?

I photographed the new billboards, I bought the product, I read the packs, I searched in vain for an explanation. The only clue I could find was a variation of the Goulburn Valley logo sporting the words ‘Dairy Company’. Now even as a brand professional who makes a living by designing brand marks, I know that just because your logo says ‘Dairy Co.’ doesn’t mean you can milk a cow.

What does Real taste taste like?
‘Get Real Taste’ the billboards told me. Goulburn Valley know a fair bit about the real taste of pears, peaches and apricots – but does that mean they know about the real taste of bananas, strawberries, chocolate and iced coffee? I bought the product, I tasted the product, take it from me, there’s nothing even remotely real about the taste of the banana, and strawberry flavours. Personally I’ve never bought flavoured milk for the ‘real fruit taste’, that’s kind of like buying a McDonalds hamburger for the taste of beef. When I buy flavoured milk, it’s for the ‘real taste’ of flavoured milk. And this new brand of flavoured milk from the folks at the Goulburn Valley Dairy Co. tastes, looks and smells pretty much the same as any other flavoured milk to me.

Get Real…
So has Goulburn Valley successfully transferred the brand equity of their tinned fruit expertise into their dairy venture? Not for this flavoured milk drinker. It seems the Goulburn Valley Dairy Co. has its work cut out to get a foothold in a tough market with powerful incumbent brands. In the wise words of the Greek woman who runs the corner milk bar: “We don’ sell much flavoured milk love. It’s very slow. I only sell a few Big Ms-a-day. I can’t sell another one. No-one will buy him.”

If you have an issue or an opportunity around how far is too far to stretch your brand, we’d be more than happy to have a chat about it and provide our professional perspective.

Dave Ansett, Brandamentalist.
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