SME Business Lesson #10 – Be Patient and Grow Slowly

You are busy selling your products or service and business life couldn’t be better – or more exciting. It is at this point that it is tempting to expand your brand offering and to try and get more market share elsewhere.

Think twice before venturing into unknown territory. Your brand will be much stronger and probably more profitable if you concentrate on your core strength first. Make sure you achieve your branding goals, become the market leader or one of the major players in your sector and work hard on getting your unique selling point across.

Unless you like a risky gamble, only when your brand is well established and recognised by your target audience and has enough brand ambassadors to keep new and repeat business coming in, only then would I advise to look into diversifying.

There are bound to be implications for your core business –

  • Starting from the top, your business, brand and marketing strategy need re-thinking and adjusting
  • Not all your stakeholders will buy into your brand extension and may feel alienated
  • New infrastructure requirements will stretch your resources and challenge your existing and new brand
  • Your new brand will need some sort of investment – time or money – before it will be a revenue earner, so cashflow may be an issue
  • You will have less time to dedicate to a particular area of your business which may be detrimental to your existing client base
Brandingstrategyinsider.com has just published this article answering a question of an India based soap manufacturer and whilst it relates to large brands, but I think it is relevant for SMEs also.
“…one must first understand what brand associations are most closely tied to the brand in question. Any brand extension into a new product category must reinforce one of those primary associations without creating new negative, conflicting or confusing associations for the brand. If this rule is followed, the brand extension will actually reinforce what the brand stands for.” Brad VanAuken

You can read the article here: Can Brand Extensions Weaken A Brand?: Branding Strategy Insider. I had also posted an article back in 2010 about some of those weak or failed brand expansion attempts. And here are some more strange big brand extensions:

Donald Trump launched Trump Steaks

Donald Trump launched Trump Steaks

cosmopolitan brand flop

Cosmopolitan owned a yoghurt brand for all but 18 months

Stallone High Protein Pudding

Silvester Stallone gave his name to a high protein pudding. Yum.

barbie_golf_natalie Meyer

Barbie launched a clothing range (Image courtesy of Natalie Meyer)

In essence, businesses naturally need to expand or change to keep their brand and brand promise current, valid and fit for the future. But whilst it may be tempting to diversify early, time will be better spent establishing a strong brand identity and market position – and to truly understand how to apply your existing brand values to the new product or service.

About Regine Wilber

Brand strategist and designer with a passion for all things surrounding brand creation, design and management - and social media..
This entry was posted in Brand Management, Brand Strategy, Branding and tagged , . Bookmark the permalink.

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