When low rent feigns luxury (branding boo-boo).

I'm a tea fanatic, religiously drinking 2 cups every morning. I've made many a Starbucks employee's day with my simple "hot water and a tea bag" request. But this post isn't about tea: It's about how some companies make all the right moves when moving up the branding ladder...only to miss the BIG picture.

At $6.2 billion annually, tea sales are up 400% in the last decade (NYT article). With demand such as this, the market naturally diverges making room for luxury, high-premium tea. And low-rent Lipton wants a piece of the action.

With its new line of "Pyramid Teas" Lipton spent two years in R&D leaving no stone unturned, including:

• Upped Quality: Used full, long leaves instead of tea bits (the junk known in the industry as "dust").
• Added Finesse: Packaged the tea bags in nylon mesh bags (not as nice as silk bags, but nicer than paper).
• Minded the Details: Sealed the tea in pyramid-shaped bags to underscore their brand name (clever!)
• Prettied the Packaging: Developed a portfolio of beautifully packaged teas with such names as "Bavarian Wild Berry","Black Pearl" and "White Tea with Island Mango". Yum.

But it's all for naught. Why? Because it kept the darn "Lipton" name! See the pretty package? With the red Lipton Logo just glaring at us, as if to say, "I clean up good, don't I? My pretty package has fooled you into paying 3x as much as you used to!"

Sure, they made the logo smaller. Problem is, they needed to make it invisible. While Lipton is undeniably associated with tea, it's a far cry from luxury. More homegrown than high end, Lipton is known for such hits as Sun Tea--not with crumpets at the country club.

For a few extra bucks, Lipton could have created a new brand name for it's new line (or, why not keep it at Pyramid Teas and just leave off the Lipton logo?) and used its retail competencies to make a real dent in the market. Instead it will confuse its loyal customers. But hey, it will make for the butt of many jokes at tea time.

Comments

[Mack Collier]

Laura Ries is that you? ;) The line-extension snafu strikes again!

[CK]

Hey Mack: Seems like while they were spending 2 years in R&D, Lipton should have spent some time at Laura's blog (or read one of their great books).

I'll have to give Laura a heads-up and let her know that while Lipton might not be listening to her sage advice, we marketers are ;-).

[Laura]

Indeed, CK is a girl after my own heart. Her post is spot on. What is Lipton thinking? Must be something in the water at these companies. Folgers just did the exact same thing trying to appeal to upscale coffee drinkers. You can't move a brand up the ladder of the mind when it is entrenched on the bottom rung.

My folgers post: http://ries.typepad.com/ries_blog/2006/09/wake_up_and_sme.html

[vaspers the grate aka Pluto the Planet]

Wow, CK. You got a comment from one of my favorite marketing minds, Laura Ries. Whoa, that's coolness to the nth degree, lady.

I immediately thought of Laura and Al Ries when I read this. I was going to reiterate what the Origin of Brands and Marketing Warfare/Positioning theory is, but it's been done.

I am studying the Zero Defects Japanese system of planning 3 new products to destroy and replace each of your best current products. This is the "attack yourself" concept that I believe is part of the No Brand Extension concept.

I was totally convinced of this Ries approach the first time I read about it. If Coca Cola comes out with a new product, like a coffee beverage, the worst thing to do is call it Coke Cafe or whatever, with "coke" in the name of it.

Why? Because when your spouse says, "Pick up some Coke while your out", you won't know if it's Coca Cola soda or Coke Cafe coffee beverage.

Simplified, but that's the gist of it. There's a lot more to it, but that's the basic start of the concept.

So yes, the "Lipton" name is ridiculous. But--how's it taste?

I have always prefered Celestial Seasonings due to the wax paper wrap and the totally fresh smelling tea they distribute.

Vanilla is one of my favorite flavors in a tea.

[CK]

Vaspers: Ah tea. One of my biggest pleasures in life. Lady Londonderry is my absolute fave but I drink Earl Grey, Lady Grey and Irish Breakfast like it's going out of style. I like the Black Leaf Teas...don't even serve me a chamomille or green tea. yuck!

And Laura (and Al) Ries have been tremendous influences on me--teaching me the core branding and divergence lessons.

In fact, I read Laura's blog as religously as I read yours. Why wouldn't a gal soak up the brainy stuff you both so generously deliver? And no, I'm not just saying that.

[David Berkowitz]

Read this in Feedblitz and saw you wisely waxing Riesian, though I'm late to the discussion.

Great post, CK.

[Lewis Green]

CK,

Imagine what margins of Lexus might be if they were called the Honda Lexus. Do you think they could slap the same sticker price on a Honda Lexus as they have for a Lexus? One would think that a long-lived brand such as Lipton would understand the concept of launching sub-brands when a product or service doesn't fit the profile of the mother brand.

[vaspers the grate aka Pluto the Planet]

Smart and sweet. What a gal.