«Brand diversification is necessary. It is a
direct consequence of competition in mature markets and of the fragmentation
of media.»
J.N. Kapferer, renowned brand expert
The Concept. Generally speaking, brand diversification means entering a business with a brand outside of its existing scope, or - in other words - the exploitation of new, untouched markets. The diversification of brands is specifically difficult and restrictive because brands have a core which they have to follow. Most brand owners compete within their core categories – with countless line extensions and variants of the same product range, for the same customers, and usually against the same competitors. This game often ends in a draw – all make their best efforts, but nobody wins.
The future is much more promising in untouched markets. In different product categories, in different channels, and/or in different regions. Surprisingly, this approach does not require much time nor R&D, nor is it specifically risky. It only requires a serious willingness to collaborate and share with business partners who bring all the missing elements to the table. Interestingly, brand diversifications are much more successful than line extensions, be it in sales, market shares or failure rates.
J.N. Kapferer, renowned brand expert
The Concept. Generally speaking, brand diversification means entering a business with a brand outside of its existing scope, or - in other words - the exploitation of new, untouched markets. The diversification of brands is specifically difficult and restrictive because brands have a core which they have to follow. Most brand owners compete within their core categories – with countless line extensions and variants of the same product range, for the same customers, and usually against the same competitors. This game often ends in a draw – all make their best efforts, but nobody wins.
The future is much more promising in untouched markets. In different product categories, in different channels, and/or in different regions. Surprisingly, this approach does not require much time nor R&D, nor is it specifically risky. It only requires a serious willingness to collaborate and share with business partners who bring all the missing elements to the table. Interestingly, brand diversifications are much more successful than line extensions, be it in sales, market shares or failure rates.