Companies can avoid brand erosion by remaining in their strongest markets, maintaining their quality standards, and operating with the customer’s best interests in mind.
A company’s expansion into multiple markets with different brands can lead to brand dilution.
This allows the core company to explore new markets. A failed product can cause severe reputation damage if it isn’t kept separate from the core company.
Extending the brand’s core name to multiple products can lead to confusion and overuse of your brand. A company won’t succeed if they have too many brands.
These are three simple guidelines to avoid brand dilution within your business.
- Concentrate on familiar markets
- Keep Consistent Quality
- Keep your eyes on the customer
Concentrate on familiar markets
To combat brand dilutions, the first rule is to invest your time and energy in brand extensions and products that are relevant to your company.
This means you need to evaluate the compatibility between the new product and your core brand. Customers may find your new product class confusing if it is completely different from any other that your company has tried before.
Your company’s new brand may not be a good fit. This can cause customers to distrust your brand and reduce brand trust.
In the early 2000s, Dr. Pepper introduced a range of barbecue sauces and marinades. Although the idea was fun to internalize, the product line did not appeal to consumers.
Customers agreed that Dr. Pepper, and A&W root beer flavors weren’t right for steaks. Although some people were able to enjoy the products, more people were confused than they were impressed by their release.
This diluted and damaged the brand. People stopped trusting Dr. Pepper for high-quality soft drinks and instead saw Dr. Pepper on the other side of the grocery shop. Although the new product line did not make Dr. Pepper’s beverages worse, it could have hurt its reputation in the retail and food industry.
Coca-Cola, on the other hand, has succeeded in expanding its brand within the soft drinks market. Because the extensions were sensible and easy to understand, Vanilla Coke and Cherry Coke have been mainstays of the industry.
If customers aren’t interested in creative products, a simple mismatch between product types can cause company’s reputations to be damaged. To get feedback on your branding, consider hiring a brand strategist.
Maintain consistency in quality across all products
Brand dilution can be a problem for businesses because it encourages companies to spread their resources thin. It is essential to maintain quality across all product types when expanding a brand or offering services.
Experts advise companies not to extend their brand to too many products. Diversification can be beneficial for your company and may appeal to new customers. However, too many services will put a strain on your company.
Amazon, for example, is one of the largest and most successful companies in the globe. Amazon was hugely successful in the voice and e-commerce sectors. Amazon was unsuccessful in expanding into the highly competitive mobile phone market.
Amazon introduced the Fire Phone after the Amazon Fire Tablets. These tablets performed well in the marketplace and were well-received. Customers complained that the Fire Phone did not provide the app support they had hoped for from top-tier mobile businesses.
This is understandable, considering that Android and Apple have been established for many years in the mobile market, setting the standard for the mobile experience. Amazon could not make waves in a saturated market that was so advanced, it would have to extend its brand.
The Amazon Fire Phone was unsuccessful in gaining traction. Instead, the company reverted to its strengths and continued to do what it is best at. This brand dilution cost Amazon both time and money to get the new product on the market.
Any business strategy should consider the customer’s needs and preferences. This is true even in the context of brand dilution.
Companies that want to grow their brand intelligently need to evaluate the consumer perceptions of core brand attributes and assess potential extensions against existing successful characteristics.
By keeping your company’s values and mission at the forefront of all your brand extensions, you can avoid confusing your customers with confusing products.
Coca-Cola, for example, has gone through a lot of brand extension efforts. Some have been more successful than others. New Coke and Coca-Cola Life were two of the less successful extensions due to brand dilution or differences of opinion between the core brand and customers.
After a major product formula change, New Coke was created to re-energize customers. Even though the survey data showed that people liked the new formula, customers didn’t want to try a new version of a product that they already loved.
Coca-Cola Life was also created in 2014 by the company to appeal to those who want a low-calorie, high-sugar product that is similar to its existing brands. Coca-Cola might not have been able to differentiate this product sufficiently from other established products, like Diet Coke or Coke Zero, to gain significant traction.
The company made the canned green to distance the product from its core brand. This may have discouraged potential customers from buying it in stores.
When companies think up new products, customers should always be first. Although an idea may be appealing, it will only help your brand if it does not solve a problem for customers.
You can avoid brand dilution by playing to your company’s strengths
When expanding into new markets, companies should consider the possibility of brand dilution. Companies should avoid brand dilution and instead focus on existing markets.