Is Brand Dilution Bad For You?

Some people say, “it’s good if you can move from your comfort zone” or “you need to try new things”. Perhaps that is what you plan to do. But it might backfire right at your face.

Do not fret, for this is something companies stumbled upon as well – trying something new and failing. Or in this case, brand dilution. It’s like trying to make an orange cordial – you poured in enough water, take out that bottle of cordial and tried to pour out the content, only to find several drops coming out of the bottle. You ended up with ‘orange-flavored water’ which is neither sweet or tasty. Not good!

What is brand dilution? It is a weakening of a brand through a disorganised brand architecture, and it often happens due to poor judgement on brand extension.

Imagine a simple, small-time brand which is well known for its chocolate beverage (let’s call it Cocoyum), and it is known by its consumers and the community which regularly consumes the said beverage. One day, after having been in the business for over a decade, the owner decides to branch out and do something else aside from selling Cocoyum beverage. He decides to venture into shoes. But after investing and producing thousands of pairs of shoes, the owner discoveres that the Cocoyum shoes were uncomfortable, dull and disliked, even by fans of the beverage. How terrible can the brand Cocoyum be now, thanks to the shoe. And perhaps the one who suggested the shoes should be given the boot instead (pun not intended).

As bizarre as the scenario above sounds, you’d be surprised that some established brands have done similar things in the past. A few of those examples are as the follow:

Zippo The Woman’s Perfume: The brand known for stylish lighters did produce a series of perfume for ladies – with the bottles shaped like lighters!
Dr Pepper Marinade: One of the well known soda brands in America tried to venture into culinary line by introducing the marinade, with hopes that if people would drink Dr Pepper during a barbecue session, they’d consumer meats with Dr Pepper marinade. And they were unfortunately wrong.
Virgin Water Purifier: It’s a plane! It’s a water dispenser! It’s both! An airline company now has its line of water purifier. And this is rarely mentioned again.

While there are times some companies can successfully, others not so. And the worst case scenario is when the failure can pull the company down overnight. Hence, companies need to look at strategies designed to expand brands by extension in order to be warned of dangers of brand dilution.

Any company in such a situation needs to discover what the problem is, identify the root causes and then create a strategy to solve the issues which led to the brand dilution, in order to win back customer loyalty and trust (and perhaps regain market share). Sometimes, when you stand for everything, you risk standing for nothing in the customer’s mind.

Perhaps the best way tackle this issue is to is come back to basics and understand the core function of the brand – its original intention, when it was established. Virgin Group founder Sir Richard Branson (yes, the same company with the water purifier) nicely put about how brands should be realistic about itself. He said, “Too many companies want their brands to reflect some idealised, perfected image of themselves. As a consequence, their brands acquire no texture, no character and no public trust.”