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As a brand, we all strive to be the very best, to climb to the top of that overly competitive anthill and to finally be recognised as masters of our craft. But once we’ve plateaued, where do we go from here?

It’s called diversification; and it’s a big and scary word.

It can lead to much promise and profit, blowing your brand up to epic proportions or it could be your downfall, causing your brand to spiral towards the abyss of has-beens.

When generating such high margins, it’s easy for a brand’s judgement to be clouded and assume that by stamping your name on every product and service, your hardcore fans will rejoice and always stick by you.

Research has shown that a brand’s profitability as well as positive perception only increases if the brand is extended into categories adjacent to the core brand.

Some brands like Virgin have done a great job at extending their name; going from music to airlines to hotels. But others don’t quite possess the poise or agility for that graceful leap.

Here are just a few cautionary tales of major A-listing brands who moved into industries that they probably shouldn’t have:

1.    Pierre Cardin

The brand’s early extension into perfumes and cosmetics in the 1960s succeeded so well that the company sold licences indiscriminately, granting more than 800 licenses in 94 countries, generating a $1 billion annual revenue stream. Then, profits plummeted. It was about the time when people started seeing the Pierre Cardin name appear on baseball caps and cigarettes, margins started to collapse as people lacked to see the premium degree anymore, inadvertently destroying their image as luxury brand.

2.    Coca-Cola

It’s common to see massive conglomerates like Coca-Cola produce certain accessories like key chains, shirts and hats but they’ve taken it one step too far now with their very own clothing line. With even their very own (non-refrigerated) booths in stores like Parkson, you can find such Coca-Cola branded items like jewellery, footwear and even nail polish!

3.    Dr. Pepper

Since we’re in the realm of carbonated drinks, Dr. Pepper has too extended, but into other F&B products as a way to diversify, which makes sense right? Well, not unless you’re releasing a line of BBQ and marinade sauces for steaks (which they did, obviously). I’m pretty sure it has never crossed anybody’s mind to add the sweet, unique yet indescribable taste of Dr. Pepper to a lovely piece of Wagyu that’s soon to be seared on the grill.

4.    Zippo

Zippo Perfume – I don’t even know where to begin with this one. If you were any of the other brands that were mentioned before, then maybe a fragrance line would work. Unfortunately Zippo brings to mind the strong scent of lighter fluid, which is probably the last thing anybody wants to smell of. Just the thought of it makes your nostrils sting! Also not forgetting its highly flammable properties, I don’t foresee anybody spraying this one on before a hot date to a Teppanyaki restaurant or a Dr. Pepper BBQ anytime soon.

To paraphrase a United Colors of Benetton case study:

“Now more than ever we live in a society driven by image. Every day we buy less and less product and more and more image. It’s not a sweater, it’s a Gucci. It’s not a pair of jeans, it’s a pair of Levi’s. Everything has been reduced to labels. Products don’t have an identity unless they are branded. Brands differentiate themselves through marketing strategies.”

So understand your brand and what it symbolises. Emphasise what you do best and move into markets that make sense. By playing up your symbolic value and not simply shoot in the dark, you’ll be able to cross categories seamlessly and extended your brand’s story.

How does your brand plan to diversify?

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