But what happens when you take branding to the next level? When you strategically nurture your current brand to maximise future growth? Whether you’re new to the business scene or a well-established company looking to give yourselves an identity refresh, here are the four main brand strategies which will help to get you that one step ahead of the competition.
The four branding strategies
- Product line extension
- Brand extension
- Multi-brand
- New brand
Here, we explore these in more detail.
Product line extension
What does your customer want? And how will you give it to them?
Product (or range) line extension is when a business introduces new products or a line of products that relate to an existing product or product line - usually in response to the needs of your customers. For example, a company that sells coffee might introduce new flavours or a new variety of coffee as a product extension.
The aim of product line extension is levering the existing customer base and brand recognition, with the ultimate goal being to increase sales and profit. It’s also a way of diversifying your current offerings while reducing the risk of relying too much on a single product, product line or service.
This strategy is often used for businesses that have generated a well-established and familiar brand over time. Customers trust the brand but are excited by a new product.
Brand extension
Brand extension is when a company uses its existing and established brand name to introduce a new product or product line that differs from its core offering. The new product is often in a different category or market segment but shares similar attributes or values with the existing brand.
The goal of brand extension is to leverage the existing brand equity and customer loyalty to enter new markets and ultimately, increase sales. It can also help to reinforce the core values and attributes of a brand while creating a more cohesive brand identity across different products and categories.
It’s worth noting that the risk that can come with brand extension is if the new product launch is unsuccessful, which can then potentially damage the brand’s reputation and credibility. With that in mind, if businesses are considering brand extension as part of their strategy, it’s fundamental that they keep their target audience in mind, to ensure all new products are a good fit with their existing brand.
Multi-brand
A multi-brand strategy, sometimes referred to as ‘flanker branding’, means having a number of products or brands - that are all part of the same industry but target different audiences - but are all owned and managed by the same umbrella company.
The main objective of the multi-brand strategy is to appeal to new audiences by having more than one brand that competes within the same product category. By implementing this technique, you’ll be able to serve multiple segments.
Let’s take a make-up company for example - they already have a high-end product range which targets a wealthier audience but now want to explore launching a budget-friendly selection of products. These two product types will appeal to two different audiences while sitting under the same umbrella company. By doing this, the umbrella company will be able to reach more audiences, the more brands they manage.
New brand
New brand strategy is when a company is looking to develop a completely new product line that they’ve not offered before - outside their current scope - and therefore, will need to build a new brand.
A business might consider this if they feel the future of their existing brand is uncertain, or if they feel their current brand name would not be appropriate for their new product line.