• The Wall Street Journal, Thursday, July 6, 2006 12:30 PM

Line extensions are a common and usually safe way for a marketer to capitalize on the success of a popular brand. They are less risky--and cost less--than launching a new product, and have the advantage of built-in familiarity with consumers. However, they don't always work. Take the case of KitKat bars in the U.K., where the tasty treat has been among the best-selling candies in Britain since they were invented there in the 1930s. A few years ago, KitKat parent Nestle SA decided to extend the brand, and rolled out a dizzying array of new KitKats. For the summer months, it launched strawberries and cream, passion fruit, and mango--and even red berry versions. In the winter came "Christmas pudding" and tiramisu, which contained real wine and mascarpone. Even though Britons never fully embraced the Atkins diet craze, the company launched a low-carb version. Guess what happened? They flopped, big time. In just two years, KitKat's overall sales in the U.K. dropped 18 percent, and Nestlé recently abandoned virtually all of its exotic flavors. Now, the experience has become a lesson in the perils of trying to push new versions of much-loved brands too hard. "You could call it hyperventilation," Peter Brabeck, Nestlé's chief executive, said.

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