Is it Brand Expansion or Brand Dilution?

 

Not every brand manages to pull off campaigns that make mainstream headlines. However, when they do (and when they do it well) it can really enhance the scale of a company. And we all know what that means – more cash money, honey! But there are also times when they try to make an expansion, and it doesn’t go completely according to plan. This is when this growth can make the move into the unwanted territory of brand dilution. 


For example, remember when Tropicana repackaged their product? Instead of becoming more elite (like they were probably trying to do), they actually reduced their premium image.

So, let us give you the low down on brand expansion and brand dilution, the differences between the two, and ways to make sure your efforts elevate your brand.  

What is Brand Expansion?

Companies have different ways in which they grow. In terms of brands, they typically have the choice of building something new or expanding an existing one. And, because establishing a new brand can be very expensive, current ones take the expansion route in order to try and grow their growth and potential. 

In terms of expansion, the credibility and reputation of an already established brand can be used to introduce sub-brands or new product lines, therefore expanding the existing company.

Some examples of Brand Expansion include:

  • Use of current customer base (Think Walt Disney parks)
  • Transfer of lifestyle (Think sunglasses by Porsche)
  • Change of form (Think Twix ice cream bars)
  • Lifestyle transfer of a celebrity (Think Kanye West’s Yeezy)

What is Brand Dilution?

When a company’s brand equity is impacted due to extensions that have been unsuccessful, this is what is known as brand dilution. And when a business expands its brand unsuccessfully, they weaken its original label and the stories that exist within its history.

Generally, it happens when companies attach their already strong and established name to a lower quality or new product, or one that is completely different from its core values. This leads to businesses losing authority, trust, and reputation from their already existing audience due to it appearing as though they have sold out.

Another circumstance that presents a company in the dilution category is when a business tries to grow and its team becomes too large in a short space of time. This causes brand dilution in two different ways:

  1. The workforce is stretched too thin, resulting in work of a lower quality
  2. The staff losing control due to a lack of (and confusion) of brand standards

Ways to Prevent Brand Dilution

There are many ways dilution can be prevented. However, there are four ways that are most recommended. These are:

  1. Prioritizing the core brand. The original company is why you are successful, so make sure you look after it.
  2. Slowly introduce new products. Don’t rush when you’re building new products. Your customers will embrace them once they’re ready.
  3. Clearly communicate the brand. Make sure your existing customers and new ones have a clear idea of your company when you expand. Confusion causes dilution. Remember that.
  4. Provide access to your brand’s materials that have been approved. Make sure everyone who is representing your company is on board with every step of the expansion process.

Expand Your Business

While expanding a brand is a goal for many, make sure you can clearly differentiate between the two. The goal is to build your company into a bigger one, so don’t make any of these dilution mistakes!