Conceiving, developing and establishing a brand is a vital part of any successful business. It gives you a platform to differentiate your company from its competitors and helps you develop customer loyalty. As we have discussed in previous posts, it is important that you get your branding correct from the point of company formation ,as changing it can have damaging consequences. However, if managed well, extending your existing brand into different sectors may not only facilitate business growth, but also help you stand up to the demands of an increasingly competitive market.
Studies in consumer behaviour, increasingly indicate that customers no longer buy products, they buy brands .If you are confident in your current brand and proposition and you have a loyal consumer base, why not give your existing customers the opportunity to buy from you in other areas.
However, before we consider brand extension, let’s look at the ways a company can grow without entering a new area;
Increase your current share of the market
As market conditions decline, it is increasingly important that small business grow their share of the market they operate in. This can be done in two ways. Primarily, a business can try some aggressive marketing tricks, so that they gain a competitors market share. One way of doing this is create unbeatable offers and communicate them strategically.
Elevate recruitment consultants tried this approach and succeeded increasing its market share exponentially. They developed a proposition where by they encouraged previous candidates to refer a friend and if the friend got placed in a role, they would receive £100 cash back. This little piece of innovation allowed them to extend their reach and ultimately facilitated the growth of their company.
The other way of increasing market share is by merging with one of your competitors. Though this does guarantee an increase share of the market, the complexities of merging a business are broad and may pose a risk to your existing brand.
You can extend your brand without changing your current product or proposition by expanding geographically.
While this allows you to extend your reach and consumer base, you should under estimate the potential risk entering a new location may pose to your current brand.
Extend your current proposition
One of the ways your business can grow without changing its product or service is changing the way you currently communicate and market elements of your brand.
If your brand identity is based around luxury and high end consumers develop a slightly less expensive variation of one of the products you currently offer. This enables you to maintain your current product but speak to a different demographic.