7 Key Considerations For Brand Expansion

Mark Di SommaNovember 24, 20146 min

As marketing teams finalize plans for the year ahead, the logistics of making growth happen should be strongly influencing the targets you set.

Most of us would agree there are four ways to strategize for growth: increase the share you hold in the markets you are strong in; develop new products for those markets; extend your reach by finding new markets for your current brands; and develop new products that cater to new markets.

But while the strategies themselves are well-known, your capacity to expand is of course directly proportional to your capacities to generate demand and to fulfill. It’s tempting to pluck a number that’s x percentage points above organic growth. But as the old direct marketing adage goes – be careful what you ask for, because it might just come true. Here’s 7 factors I suggest you look at to navigate a responsible course between stretch and over-reach.

1. Access – will your distribution strategy allow you to grow volumes of either current or new lines to the extent you need to? If reach is finite and static, your ability to physically deliver into market will bottle-neck. What have you done to open up access – and is doing so in keeping with your brand’s position in the marketplace?

As my colleague Brad VanAuken points out here: “Distribution contributes to customer brand insistence in two ways. First, it increases brand accessibility so that brand preference is more likely to be converted to brand purchase. But, more importantly, it increases brand exposure, which increases brand awareness … The only situation in which extensive distribution may not be right for your brand is if it is positioned as an upscale or luxury brand.”

Will you be available, not available or too available as a brand for the targets you are setting?

2. Speed – can you deliver enough product fast enough to meet the demand? At one level, this is about pure fulfillment. At another, it’s about making sure that you have paced the introduction of new product and the upgrade of current offerings at just the right speed to avoid simply trying to shovel more and more of the same kind of product into market.

How have you timed your innovation/improvement program to coincide with your expansion plans? Too slow – and your brand will lack dynamism. Too fast – and you risk overwhelming consumers with too many choices and cannibalizing your own releases.

3. Support – have you timed and resourced your communications to drive growth at the pace and intensity you require? I think this is one of the significant challenges today – getting enough cut-through for your brand to be heard at the same time as you continue to sustain and refresh the messages to keep consumers’ interest.

Too many brands think through to launch and then plan for maintenance comms. I think that’s changing – and increasingly brands need to be planning waterfalled comms that maintain messages but introduce new points of interest over the medium term. At the same time, you need to have a resource ‘buffer’ in reserve to address any lag. The trick here is to responsibly balance maintenance of your growth ranges, introduction of new developments and offers, the planned withdrawal of communications support for dying lines and the responsive comms needed to plug holes or fades.

Are you saying enough about the right things to the right people at the right times with the right weighting in the most interesting ways to generate the growth you want?

4. Interaction – how are you ensuring that your social feeds are more than just background? How are you striking the right balance between the short-term exchanges that Twitter and Facebook are so good for and the longer-term commitment of reinforcing relevance? What metrics have you put in place to ensure that your social conversation is fueling interest across all your products and planned releases, without reducing your social channels to promotional mouth-pieces?

At the other extreme, is your brand just chatting for the sake of it? That question is made all the more pointed by speculation that organic reach on platforms such as Facebook is heading for zero. In which case, you may find yourself increasingly allocating resources to interactions that speak to no-one and add nothing to your ability to grow.

 5. Volume – obvious but easily overlooked. Once you’ve generated the demand, will you be able to keep up? The temptation is always to look to ship more to bigger markets but, to Brad’s point earlier, not everyone should be looking at scale as a driver for growth. Sometimes, a brand should be aiming to be precious rather than popular – particularly given the logistics, expense and delayed returns of getting into some of those markets and continuing to supply at the levels required.

Everyone talks about return on equity and return on capital. Perhaps marketers need to focus as much energy on the heavily-related topic of return on expansion. “What do we get for going there in greater quantities? And what do we gain if we don’t?”

How much is enough when it comes to your brand retaining optimum brand value? At what stocking level do you risk becoming too much of a good thing?

6. Understanding – there’s a fascinating irony in the fact that as markets get bigger, the demands of consumers to be treated specifically and personally grow louder. Those demands come with some potentially hefty investments. The key questions for brands with ambitious growth plans are: Can you grow your understanding of your market(s) as quickly if not more quickly than you can the consumer base itself? And then, having grown it, can you keep feeding that enlarged community with the levels of service and experience that they now expect?

In a great piece on the travel industry, the authors offered advice that is relevant to any number of brands keen to expand their footprint: Focus on customers, not channels; Win in the era of ‘big data’; Unlock the power of partnerships (“Succeeding here may be more about identifying companies with similar interests and synergistic capabilities than about throwing new money and new technology after problems rooted in structural issues of coordination.”); and Master the entire customer experience.

How will you stay delightfully one-on-one as you expand? What will you continue to know about your customers as individuals that your competitors don’t know?

7. Responsibility – What compromises will you need to make ethically to achieve the growth you’re targeting? Does it depend on you sourcing from lower-wage countries, for example, compromising environmental standards or adding ingredients to your products that are considered harmful or unhealthy? Does it come at the expense of diversity goals – or other responsibility targets? Interesting to see Puma putting safeguards in place across its supplier network to ensure that they pass muster. Not doing so risks your brand being labelled as one that pursues its commercial plans at too high a social cost.

What’s the potential cost of growth to your social reputation?

Brands remain addicted to growth. (In time, my view is that we will have to question that – because the environmental consequences debate will become increasingly mainstream.) But in the meantime, growth continues to be the metric that so many look to for proof that marketers are doing their job well and that businesses are strong. In the 12 months ahead, what level of growth are you going to commit to that enables your brand to grow at a realistic pace, retains the customers you have, introduces new advocates to your brand community and continues  to safeguard and enhance your brand’s immediate and long term reputation?

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Mark Di Somma

One comment

  • Jamie Mistry-Evans

    November 25, 2014 at 12:50 am

    Good article. Point 6 is so hard to pin down, and yet at the same time this is actually what being a successful brand is all about in the 21st century.

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