Diversification is the key to successful ‘continuous brand reactivation’
With consumers valuing ‘experience’ above all when forming their perception of brands, brands are naturally responding with an ever-increasing variety of experiences offered through a wider spectrum of channels. Some are even taking it a step further by not only diversifying brand experiences, but the brands themselves – taking them into lucrative new product categories and hitherto untapped audiences.
The DNA of diversity
All marketing experts agree on the basic premise that businesses must continuously gain new customers in order to stay alive. Diversification is one means of generating that growth while managing risk.
But while the potential rewards of diversification are enormous, not every brand possesses what it takes to successfully stretch from one category to another, and to another. At minimum, they need a robust and distinct character or personality which will inspire a loyal following almost regardless of the product type.
Ideally, an especially loyal following will lead to the creation of a thriving fan community – and it is these communities that can bring so much more texture and vitality to the brand story through their own experiences and engagement.
Coca-Cola – Flowing with market trends through acquisitions
Coca-Cola’s following is without a doubt one of the widest and most intense of any brand. But though much of it is associated with one product – Coke – Coca-Cola actually represents many products, with the company steadily diversifying beyond Coke and even fizzy drinks.
In the last few years alone, the company has acquired ZICO Coconut Water, Gold Peak Tea, Suja Juice and Keurig Green Mountain. The rationale is twofold: to cater to a wider range of customers and beverage preferences, and to hedge against a gradual market trend away from carbonated drinks and toward drinks perceived as ‘healthy’.
The implications of their recent purchase of Costa are even more significant, giving Coca-Cola a well-established, scalable multi-channel, multi-format platform in the coffee business – a segment that is growing by six percent a year globally.
By not only diversifying into multiple product segments but also diversifying its old standby products with new variants, Coca-Cola is successfully covering all the bases; no matter where consumer trends lead the market, the company can offer something to quench it.
LINE FRIENDS – Leading loyal fans into new fields and new experiences
Another interesting example of a brand diversifying far beyond its original basis is LINE FRIENDS, which began as a purveyor of social apps. LINE FRIENDS built upon the strong image and fan base it had established online to emerge offline, into the world of retail merchandise, licensing and content production.
In a few short years, their fan base has followed them and grown dramatically as LINE FRIENDS blossomed to encompass a whole series of new brand experiences. The name now covers approximately 5,000 character products sold at more than 100 theme stores around the world, as well as animations, games, cafés, hotels and theme parks.
Want Want – Crossover campaigns activate an old brand with a young audience
Brand crossover is a common strategy for brand diversification. For Want Want, it has been the key to their reinvention for a new, wider and younger audience.
In Mainland China, Want Want was known for years as a manufacturer, distributor and retailer of snacks and beverages. In the 21st Century, however, its customer base remained largely the 1980s-1990s generation. It needed to find a way to satisfy the hunger of younger customers to assure long-term sustainability.
The solution was to cross over with other high-profile brands from outside the snack and beverage market. One successful effort was a tie-in of Want Want’s famed Hot-Kid ball cakes with the 'Monster Hunt II' children’s movie. Special Monster Hunt gift packs were created for the movie’s launch and made available only through e-commerce channels. The tie-in boosted the appeal of both the movie and Want Want products.
Want Want also entered into a collaboration with Chando, a Chinese cosmetics brand. The product outcomes included a Blemish Balm (BB) Cushion featuring the Want Want character, cosmetics packaging designed to look like sugar-coated crackers, and even a Want Want character mask.
A crossover with Chinese fashion brand TYAKASHA resulted in the Want Want Red Sweatshirt. Stocks sold out immediately after its launch as a limited edition (along with sweaters and purses), with almost 700,000 shoppers (a volume 10 times greater than average) streaming into Want Want’s flagship shop at Tmall. The product sold out again soon afterwards in pre-sales for the ‘Double 11 Shopping Carnival’.
With its crossover diversification strategy, Want Want succeeded in not only increasing revenue, but connecting with the customer demographic that will assure its future.
Expanding with care
Brand diversification can backfire as well as succeed. Brands must clearly identify new product categories in which their established names will resonate. If stretched into completely inappropriate segments or attached to products that fail to support it, the brand's value will diminish.
So before you diversify, consider these steps:
- Fully explore and understand the unique character of your brand
- Thoroughly research your new target markets
- Review your company resources and capacities. Identify potential challenges, determine budget, set ROI target, etc
- Consult a total brand activation agency with a broad network and experience if your in-house resources aren’t sufficient
Above all, don’t be tempted into a frenzy of ill-considered decisions: Every market needs time to penetrate, and every brand needs time to develop in a sustainable way.
