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The Sweet Scent of Growth

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My research focus at the Ehrenberg-Bass Institute being product portfolio management – so I can’t help looking at the product categories that I consume through this lens. This brings me to heady world of fragrances for this post. I’m not embarrassed to admit that I’m a heavy category buyer. The affinity is perhaps nurtured from an early age, growing up with parents who preferred to leave the house smelling nice whenever they went out.

If I mention Chanel to you, which fragrance comes to mind? Regardless of gender and whether you have bought or smelled the product or not, chances are you’ll mention Chanel N°5. It’s hard to find another fragrance brand as iconic as Chanel N°5.

For the category buyers, if I mention Calvin Klein fragrances, you’ll probably mention their main products like Eternity or Obsession. A mention of Dior may elicit Eau Sauvage or Miss Dior. Let’s pick a more obscure perfume house like Creed. To those in the know, it’s more likely that you respond with Aventus. The thing is, each perfume house actually produced a lot more brands and their variations. A quick search in Sephora for Chanel fragrances produced 37 options, whilst there are 47 perfume options for Dior.

N°5 was introduced over 100 years ago – in 1921, by Coco Chanel. Calvin Klein launched Obsession in 1985 and Eternity in 1988. Dior first sold Miss Dior in 1947 and Eau Sauvage in 1966. These fragrances are actually pretty old. Yet, it would be unthinkable for these perfume houses to discontinue them.

For the brand to be widely known, the perfume house needs to have a commitment to support the core brands, keeping the load-bearing walls to sustain the business. Despite the variations and themes that perfume houses often produce (like, the Eau de Toilette vs. Eau de Parfum, the Limited Edition, the Intense Version, and so forth), the core brands are the ones that they continue to support. The perfume house would do so through new advertising campaigns and creatives rather than necessarily elongating their product offering. Along with releasing seasonal versions and new fragrances, the perfume house could also simply produce new ads. Take for example, the cinematic ads for N°5 that Chanel releases quite regularly. This one is my personal favourite from 2011 starring Audrey Tautou and directed by Jean-Pierre Jeunet.

Furthermore, the popularity of fragrances such as Chanel, Dior, Hermès, or Tom Ford can’t be detached from their wide availability across department stores and duty-free shops. It allows consumers, regardless of their target income or segment profiles, to purchase the products. We don’t think of these brands less favourably or consider them to be less premium when we can widely find them. Yet, this is one of the excuses for some brands (regardless of product categories). Using tactics to limit distributions (or focus on certain channels only, e.g. online or brand boutiques), the reason is often ‘to preserve brand image or consumer perceptions’. Why do marketers make a rod for their own back?

The examples from the world of fragrance is another illustration on the importance of building a brand’s mental availability and physical availability. N°5‘s iconic status is not just due to its links to Marilyn Monroe or pop culture, it’s built through hard work in distributing the product all over the world and keeping the brand fresh in consumers’ mind.

Some key points to remember:

  1. Core products are really important for the brand’s survival and growth. When the brand is struggling in the face of competitions, sacrificing the core products is not the path to take – worse still, dismantling the support network for the core to finance additions to the line-up. Despite competitions from other perfume houses and new releases (e.g., Chanel Chance Eau Tendre), Chanel continues to support their core products, such as N°5 and Coco Mademoiselle. In its 100+ history, N°5 has undergone bottle shape and label design refinements, however these were subtle evolutionary steps rather than drastic changes. By all means, change the product line-ups to cater for evolving consumer tastes and preferences, however, resist the temptations to completely dismantle your core, if you don’t have strong enough replacements for the future (think about how Coke Zero still co-exists with the full-sugar Coke).
  2. Knowing how much the core products sustain the brand is crucial, so mistakes will not be made to sacrifice them. It’s possible to quantify the importance of the core products. Just like engineers can measure load-bearing walls, the importance of the core products to a brand can also be reported using an approach aligned to the Laws of Growth. How many of such ‘load-bearing walls’ do you have for your brand?
  3. Releasing new products is not the magic pill to take when the brand is struggling for survival. As mentioned in my previous blog post, return to the foundational principles of growing mental availability and physical availability to grow the brand’s penetration. You can consider new products to sit along with your core, when the mental availability and physical availability structure is sound.

PS: Being a nerd, I made a database of all of the fragrances that I ever bought along with their top notes, heart notes, and base notes. I won’t mention how many I have but these are my favourite notes!

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