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Brand Extension

Brand Diversification: Extend With Caution

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In the search for more revenue, many brands seem keen to broaden their mandate or redefine the sector they see themselves as now being part of. But the hunt for diversified revenue streams comes with its own list of dangers and the most obvious caution is this: don’t lose the plot. Don’t spread your brand so wide, generalize your position so much or shift your emphasis so far from where you’ve been that you lose credibility, authority or distinction in the minds of your customers.

I watch with concern as companies make plans to “lifestyle” their brands, shifting the emphasis of what they do in order to introduce the new product lines that they hope will invigorate demand. This is driftnet strategy. It’s based on the belief that if you trawl wide enough across a broad enough front with a general enough message you’ll end up with a bigger catch than what you’re hauling in right now. Dig a little deeper into the plans and it becomes clear that the sectors brands often wish to rush into are already crowded (which brand marketers justify as proof of demand) and the rationale for this move is based on perceived interest/opportunities that are exactly that – perceptions – and that should, with rigorous appraisal, be dismissed as optimistic rather than substantial.

You don’t automatically become a better brand, a bigger brand or a more attractive brand by walking away from, or downplaying, the equity you’ve worked so hard to build.

In some circumstances of course, diversification is the best strategy going. Clearly if the sector itself is dying or if you are being converged on or commoditized at an accelerating rate, the need to disrupt your business case and reframe your brand is obvious. Take IBM, they have shifted their emphasis a number of times to powerful effect.

But if the effect of diversifying is simply to weaken what you already stand for by spreading what you do over a wider area and hoping that customers will find “relevance” in your presence, the effect may well be the opposite of what you intended.

You can become a more powerful and vibrant brand into the future if you can introduce an idea/product that extends the relationship people have with your brand in ways that feel effortless and delightful. My simple rule for brand extension/diversification is this: Go from strength to strength and not from strength to hope.

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6 Comments

Serge
Twitter: Diplomat_Serge
on February 04th, 2014 said

Very good point!

Critical thinking should always be turned on. Brands should realize where and when they can expand and it’s definitely restricted. Actually, more experienced brands understand that. But young ones should measure their strengths, otherwise they will disappear.

Yeah, good lesson: ” Go from strength to strength and not from strength to hope “. Worth remembering!

Thanks a lot!

James H.
Twitter: JRHalloran
on February 06th, 2014 said

I agree. It’s not always the wisest idea to change your brand’s focus, but if it so happens due to the fact that you’re finding yourself in a dying industry, you should always focus on your strengths and the strengths of your relationships.

Strong relationships will help a brand cross-breed where they need to.

Hilton Barbour
Twitter: ZimHilton
on February 10th, 2014 said

And if you’re particularly fortunate, your customers will actually highlight alternative uses or extensions you’d never considered. Arm & Hammers Baking Soda is a case in point. It began life as an additive to help housewives bake but was discovered to have a secondary benefit in absorbing orders. Eureka, no line extension required…merely a reframing of how an existing product/brand could address an alternative issue.

Maciej
Twitter: 36creative
on February 14th, 2014 said

I think it is important to always stay true to your core business personality. Remember what it was that brought to your level and continue that as your focus.

Sandra Pickering
Twitter: opento
on February 27th, 2014 said

The choice between ‘sticking to core’ and ‘extending widely’ is always challenging and involves a balance of risk and opportunity around both the short-term commercial goals and longer-term brand-building goals.
I have been using a meaning-led approach to extension strategy and brand architecture for some years. It allows brand managers ot look at the core vs. extension question through a different lens.
More info here for anyone interested in brand meaning and extensions: http://bit.ly/OFHjAP

Pete Canalichio
Twitter: petecanalichio
on June 08th, 2015 said

Great points Mark. One thought to consider also is that consumers have relationships with brands just like they do with people. When a friend begins to behave differently than normal, most people normally consider if this is a “phase” or some kind of anomaly. If the behavior reverts to normal, we tend to “let it go” and things get back to normal in short order. If the behavior continues, we then have to assess and determine if this is a “good” change or a “bad” change. Even good changes can have an adverse effect if they are not genuine. So if you are a brand manager, consider your strategy and engage with your consumers in a way that is customary. If you want to make an abrupt change, give consumers some warning so they know your intentions are genuine.

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