Branding: The Simple Math of Branding
Let's use Starbucks as an example of a company that added products to expand its brand only to have it backfire. Howard Schultz bought Starbucks in 1987 with a very focused core concept — create a European café experience in the United States. Starbucks offered premium coffee in an inviting and comfortable environment where people could relax, meet with friends and enjoy a tasty hot beverage. Pretty simple idea, and unique at the time. Of course it was hugely successful. The popularity of the brand grew rapidly and legions of brand enthusiasts wouldn't dare buy their morning coffee anywhere else.
Then the visionary Schultz left the company and the bean-counters (no pun intended) took over. Starbucks' focus quickly shifted from offering a unique café experience to growing the brand, adding stores and expanding product lines. Growth at any cost was the new mantra. Apparently being the greatest coffee house in America wasn't enough. Starbucks wanted more. So the new corporate team added products. Soon you could buy music CDs, breakfast sandwiches, breath mints, tote bags, calendars and lots of other things that had absolutely nothing to do with coffee. Sales spiked at first, but eventually there was backlash. Turns out, people didn't want these things. It wasn't what they went to Starbuck's for. They went there for one thing: coffee. The addition of these other products did have a lasting effect, however. They hurt the long-term perception of the brand. Starbuck's brand suffered greatly. It took its eye off of what made it special and tried to be everything to everybody. It failed.
Schultz has since returned to Starbucks and gotten rid of many of those additional products that didn't make sense. He's taking the brand back to its roots, and it's working. Lesson learned.
On the other hand, Harley-Davidson is an example of a brand that's been successful at adding all kinds of product extensions. You can walk into a Harley-Davidson dealership and walk out with a bag full of merchandise with the famous Harley logo without even looking at a motorcycle. Harley-Davidson sells the usual leather jackets, T-shirts and bandanas. But you can also buy Harley-Davidson licensed coffee mugs, Christmas ornaments, sunglasses, watches, ties, boots, shot glasses, underwear and even a rattle for your baby. Surprisingly, Harley-Davidson fans buy this stuff by the truckload. Why? Because Harley-Davidson doesn't just sell motorcycles; it sells an attitude. Harley-Davidson sells freedom. Freedom on the road. Freedom from the daily grind. Freedom from the desk job you wish you didn't have. It sells a rebellious attitude, a swagger, a sense of community. If you're lucky enough to be part of this exclusive leather-clad community, then anything with a Harley-Davidson logo on it appeals to you. Harley-Davidson uses its brand as a filter for everything it sells, and it works.
Now let's consider the opposite of adding products. Ries refers to this as the "Law of Contraction." A brand becomes stronger when you narrow its focus. It's far easier and more effective to focus on doing one thing really well than trying to do multiple things at an acceptable level. Michael Jordan was the greatest basketball player to ever play the game. He focused on becoming the best at one thing. Then he tried to expand his skills into baseball. How did that turn out for him?
Are you wanting to grow your brand, expand market share and increase revenue? Thinking about adding product extensions to achieve this? Try subtracting products first. Get rid of products that don't perform. Are there products offered in your catalog or on your website that simply don't make sense for your brand? They're taking up valuable space for the products that are real winners. Weed the losers out. It's human nature to want to add products to grow your business. But time and time again, brands that narrow their focus see better results.