Great piece in AdWeek on the failure of single-item brands is a reminder of a question that comes up a lot: whether to dive deep or go wide. Speciality vs diversity.
Both are attractive. For some brand owners, the opportunity to offer a detailed and nuanced offering within an area is the embodiment of singularity. In a complex and cluttered world, this argument goes, there’s power in being known for one thing. There was a lovely story in The New York Times International recently about Michael Vachon who was writing software until he discovered that there was a real interest in upstart American distilleries in London. Cue Maverick Drinks, catering for a renewed interest in American spirits. It’s a great story based on a growing need. So success, right?
Don’t get caught out
Yes, but as the AdWeek article points out, vulnerability also. A fashionable rush on a specific item is usually followed by an equally unfashionable rush as consumers move onto whatever captures their attention next. That’s the shortfall of being a bright shiny object. If you’re just chasing the rush, at some point interest will fade and so will business. If you’ve expanded resources and footprint in the meantime to meet current and anticipated demand, the sudden departure of consumers in droves quickly leaves you on the rocks. Vachon has smartly resourced his business based on need, but the disappearance of Crumbs was the latest in a long line-up of one-hit brands that have gone because they didn’t know how to go with the market.
Diversity can also look very attractive. Here, the attraction is to expand the offering into new markets in order to trade on current equity and to attract new customers. Again, the theory has its merits – capitalise on your reputation and provide your customers with more opportunities to engage with you more often. There comes a point though when brands can expand so far beyond their core business that they either mean nothing to their consumers anymore (because they’re trying to be all things to all people) or they lose sight of where they began. Starbucks, famously, lost sight of its core business of coffee in its bid to establish footprint before self-correcting.
What are you known for?
So often, the options are presented as alternative growth strategies. Increasingly though, brands need to build both horizontal and vertical axes into their offerings. There needs to be enough depth in what they do for them to be credible in the area they most want to be known for. Depth brings opportunities for immersion, catering to those who want to explore the subtleties, opportunities and variations to what’s on offer. At the same time, the offering must be wide enough to continue to give people options. As Nancy Kruse points out in the article Starbucks, Dunkin Donuts and Krispy Kreme are all known for one thing but have successfully expanded their offerings to include a wide range of items that are now presented as natural companions.
Should you stay or should you grow?
Mapping how this multi-directional approach plays out on both plains starts with questions that should be informed by purpose, strategy and competitive advantages and measured for effectiveness against growth plans:
1. What do you most want to be known for? And how do you show that you are well-versed in this area? What do you want people to discover more about? Where can the journey take them? (the vertical journey)
2. What else could naturally accompany this? How do these accompanying products/services inform your core product? Why are they a natural “progression” of what you’re known for? How do these extensions add to how people perceive you? How do they contribute to the fulfilment of your purpose? How far should this suite of accompanying products/services extend – and where does it stop? (the horizontal journey)
In an upgrade culture, however, you cannot simply set and forget your offerings on both axes. Rather, brands must continue to evolve what they offer on both axes in an ordered and consistent way. There are ongoing questions that will assist you to do this:
What must stay?
What must we keep and continue to improve?
What should be discontinued?
What could we introduce?
Where can we go next (in terms of markets?)
You need a portfolio strategy
That simultaneous development of brands and ideas along both axes forms the basis in my view for a sound portfolio strategy. It ensures that your brand builds on what it has and is known for and, at the same time, introduces new ideas and services that complement and add value to your reputation.
Recently Coke bought a stake in Monster, increasing its footprint in the energy drinks market. This week comes news that it will begin testing Coca Cola Life in the US to assuage consumers’ desire for lower-calorie soft drinks. At face value, those strategies are contradictions. In reality, they are a succinct example of a seasoned brand owner testing the market in different directions to determine where it will extent its offering (into the energy drinks market) and where it will deepen (introducing another low-calorie option to its existing line-up).
Photo of “… and I’m so lonely”, taken by Akira Curiosava, sourced from Flickr