Beware of Breaking the Law of Brand Extension

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Beware of Breaking the Law of Brand Extension

Encourager-In-Chief: February 14th, 2018

Adding more products doesn’t necessarily mean adding more sales.

There is a misconception that having more varieties of the same product will give you more sales. You’ll certainly see plenty of evidence of this if you check out Coca-Cola products, salad dressing offerings, or varieties of potato chips. But the reality is, just because you have more varieties, doesn’t mean you’re going to sell more products.

For example, my wife likes Diet Coke. We buy it by the carton. When Coca-Cola introduced Diet Coke with lime, my wife bought it--but she didn’t buy any more soda then she did before. She just bought Diet Coke with lime instead of buying Diet Coke. The net gain for Coca-Cola was zero (not to be confused with Coke Zero, which is yet another brand extension).

If I see a certain toothpaste I like, I’m going to buy it. If I find another toothpaste that I like better, I’ll stop buying the toothpaste I was using and start buying the other one. I’m not going to be buying both. If the new toothpaste I like comes in eight different varieties, I’m only going to buy one.

Be careful before you overextend variations of your current products. More variety means more inventory. If they don’t sell, you’ll be sitting on pallets of product which have taken the place of liquid cash flow.

It’s fine to add new varieties so long as you do some focus group research and market testing before you invest heavily in an unknown variable.

If you want to increase your sales, narrow your niche.
- Laura Douglas

I also encourage you to order my Crafting Your Memorable Message video program, which covers this topic in much greater detail.

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