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
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:
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.