How does a brand grow? Branding Strategy Insider identifies four strategies for brand growth: increase its hold on its current market, develop new products for current markets, enter new markets for current brand, and develop new products for new markets.
Brand diversification expands the brand by entering new markets with new products. Nike successfully diversified from a running shoe company to an athletic shoe and apparel company. Apple successfully diversified from a personal computer manufacturer to a technological lifestyle brand.
Every business is faced with the diversification paradox, on one hand they can explore new territories to stay relevant and interesting in their field, but unwise or unrealistic diversification can ruin any promising business. Mark Di Soma identifies three don’t’s for diversification.
The Three Don’t’s of Diversification
- Don’t attempt to diversify with a weak brand. Like butter spread over too much bread, your brand becomes more confusing, and what strength the brand does have is diluted by venturing into unfamiliar territory.
- Don’t be boring. Far too many businesses bring a variation of the same idea to the potential market; this only adds to the competitive noise. If you cannot enter a market and serve a specific and distinctive niche, chances are, your business will not thrive.
- Don’t expand into an area where growth has stalled. Such a stall can occur because the market itself is saturated or because consumer interest is waning. Like a small fish in a big pond, you must be certain that your prospective market has tangible demand and untapped potential that you and only you are able to serve.
The big question is: Why will you be welcomed? Diversification is about the response your new presence will generate. If you’re not exciting buyers, you have no place being there. If you are interested in growing your brand, we can help. Contact us to discuss brand development, management, and implementation.