Stretching a Brand into adjacent Categories can be one of the best ways to build shareholder value — and one of the most perilous. Arm & Hammer®, Dove®, Marriott®, Dole®, Disney®, and Crayola® got it right. But Brand graveyards are full of adjacencies gone bad: Harley Davidson Perfume®, Virgin Cola®, Olay Cosmetics®, and Ben Gay Aspirin®. Who wants to ingest a cream that burns?
You’re thinking “obviously, those wouldn’t fly”; hindsight is 20/20. No doubt great cases were made for each of these flops and countless others.
Here are some simple tips for Crossing Boundaries right:
- Start strong: (i.e. – Brand is growing share in current Categories). Why share vs. sales? A Brand that’s losing sales, but gaining share in a declining Category, might be stretchable (e.g. – landscape changes require re-defining “where to play” such as document deliver to overnight e-commerce package delivery).
- Know the Basket: Cross-Category shopping basket understanding is the key. If a premium Ice Cream Brand with a loyal following wants to expand, a smart first step is identifying which Categories over-index among its ice cream buyers.
- Leverage a transferable Point-of-Difference (POD): What’s important in real estate? Location, Location, Location. What’s important in Brand adjacencies? Transferable POD. Transferable POD. Transferable POD. Think Disney® taking fun, family, magical entertainment across myriad Categories (theme parks, hotels/resorts, cruises, movies, shows, apparel, toys/games, theater…).
- Transferable POD trumps Category Proximity: Consumers view Arm & Hammer® as pure, gentle, versatile, effective, environmentally safe, and economical. Recognizing this Transferable POD, Arm & Hammer® has established successful businesses in Personal, Oral, Fabric, and Pet Care.
- Scout for insights in analogously connected Categories: If your Brand is going to enter an established Category, you’ll need a new angle or way in. Rick Seibold (Initiator) is pioneering “analogously connected category” immersions as a way to uncover truly new insights with links to Transferable POD. Categories which at the surface appear to have nothing in common can be rich sources of new insights (e.g. – CPG and industrial mining).
- Consumer permission, not ideation: Brands with compelling transferable PODs can generally stretch farther than marketers think they can. Consumer Psychologist Dr. Carol Berning notes that “companies are generally surprised by where consumers will allow a Brand to go”. What’s more useful is to first do ideation and strategy work, and then expose consumers to simple stimuli that capture the differentiated benefit the Brand would offer in a new Category.
How well positioned are you to Cross (perilous) Boundaries?