How can diversification be used as a strategic marketing communications tool? We look at why the diversification trend is gathering pace and three ways brands can use diversification to grow.

1. Diversification
of brands
Core Strategy Division

2. Introduction
The diversification of brands into broader
and surprisingly different areas has been a
growing trend in recent years.
As a business growth strategy, diversification
is not a new concept – brands have always
developed new products or entered new
markets to increase sales, block competitors,
spread risk or create new opportunities.

3. Introduction
But
diversification
has evolved.
Its pace has accelerated.
Brands are making bigger leaps into
new territories.
We are seeing diversification emerge as
a strategic marketing tool – a new way
for brands to talk about themselves and
connect with consumers.

4. Introduction
Consumers
have
evolved.
We have become more open to this kind
of diversification.
A 2005 survey found American shoppers
could see eBay creating a dating
website, Wholefoods supermarkets
entering high-end dining, and Apple
producing its own mobile phone (two
years before launch of the iPhone in
2007).

5. Introduction
One driver of this trend is the
era of ‘post-demographic
consumerism’.
Simply put, consumers are no
longer behaving the way
marketers think they ‘should’.
The majority of
UK video game
players are
women, and
there are more
gamers aged
over-44 than
under-18.

6. Introduction
Not only do brands have license to defy
conventions, consumers expect brands to surprise
them with the products and services they offer.
The ‘post-demographic’ world is one in which
people are defined more by values, attitudes,
behaviours and culture than by their age, location
or social class.

7. Introduction
Business
strategy is
evolving.
Within this new environment, brands
are under more pressure to balance
long-term strategy with shorter-term
adaptability due to tectonic shifts in the
marketplace brought about by
technology and new consumer trends.
This brings challenges and opportunities.

8. Introduction
To survive, brands are looking far
outside their categories, markets,
continents for threats and
opportunities.
As Rishad Tobaccawalla, Chief Strategist
of Publicis Groupe, says, successful
brands today are those that constantly
disrupt themselves.

9. What do brands need to know
about what diversification can do
for them?
We have identified three ways
diversification can make for better
marketing strategies.

10. 1.
Diversification is
a different way
to talk about
your brand

11. Different way to talk
Many brands have used
diversification as a different
way to talk about what their
brand stands for or to signal
a shift in ethos.

12. Craft brewer BrewDog recently
announced they would open a
‘beer-themed hotel’.
Where previously they had
concocted special brews like
‘Roadkill’, with its hotel, BrewDog is
continuing its tradition of finding
creative ways to express their
beliefs about beer and their brand.
In this case, by giving fans a unique
experience to drive brand
awareness and growth.

13. Luxury department store Harvey
Nichols’ ‘I Spent it on Myself’
Christmas campaign went against
the grain by celebrating selfishness.
They launched a range of far from
luxury products bearing the tagline.
The brand never really intended to
sell these products, but they
quickly caught on as ironic
Christmas gifts, driving customers
into their stores, boosting
Christmas sales and grabbing a
share of culture.

14. Around the release of the movie
Supersize Me, McDonald’s used
diversification as a way to signal
change when they came under
pressure as consumers became
more concerned about the health
effects of their food.
In response, the quintessential
burger chain launched the McSalad,
using diversification to signal they
were responding proactively to
people’s concerns.

15. So what?
Diversification is a different way
to talk about your brand
Expanding into different territories can be a better way to
communicate what your brand stands for than a traditional ad
campaign.
Providing memorable experiences is becoming a more
powerful and important means to connect with consumers,
particularly Millennials and Generation-Z.
Check out our Slideshare for more.

16. 2.
Diversification is
a way to sustain
competitive
advantage

17. Think tech, services & products
Today, branding is no longer simply about creating and
building on distinctive symbols and assets.
We now know consumers usually see little difference
between most brands. We are also seeing globalisation
and new technologies shortening the life-span of many
brands’ competitive advantage.
This can be countered by thinking differently about
technology, products and services.

18. In 2006, Nike launched Nike+iPod,
enabling runners to track their own
performance. The launch included a
unique range of running shoes with
space under the insole to place
their Nike+ sensor, linked to the
runner’s iPod (and later, iPhone).
Through the development of new
technology, Nike created a strong
point of difference converting many
runners from other shoe brands to
Nike, the only shoes compatible
with the system.

19. With MyMilkman.ie, Avonmore
created their own door-to-door
dairy delivery service. With the
subscription-based services like
Dollar Shave Club, Avonmore
noticed consumers respond well to
brands that make their lives easier
– in this case taking the drudgery
out of buying milk.
By creating an owned sales channel
that solves a real consumer pain
point, MyMilkman.ie bypasses their
competitors and blocks shoppers’
consideration of rival brands at the
supermarket.

20. Through iTunes, Apple diversified
out of computing into music,
creating a platform for iPod and
iPhone users to manage their
music.
Masters of product-led
communications, iTunes gave PC
users a taste of the Mac
experience. This helped lower the
barrier of entry for many to the
Apple ‘ecosystem’, endearing PC
users to Apple in a way traditional
advertising could not do on its own.

21. So what?
Diversification is a way to
sustain competitive advantage
Many brands are overcoming the challenge of brand relevance and
resonance by creating owned technologies, services and products.
This can be a tactical or strategic way to block or bypass competitors.
More importantly, it is a way to appeal to Millennials and Generation-Z
who increasingly expect brands to understand their needs and to
provide them with unique, meaningful and tangible solutions.
Check out our Slideshare for more.

22. 3.
Diversification is a
way to engage new
audiences or target
new occasions

23. Engaging new audiences & occasions
Diversification can be an
effective way to reach new
audiences or to expand the
occasions for consumers to
enjoy your product.

24. Around 2013, sports brand
Underarmour was losing market
share because its brand was
invested in masculine, ‘meat-
headed’ iconography.
They realised they were missing out
on an $11 billion market of
women’s sportswear.
Through their ‘I Will What I Want’
campaign, they redefined what
athletic performance meant for
women, resulting in 30% growth in
sales, increased market share and a
surge in Underarmour’s share price.

25. In Ireland, Tayto is one of the most
surprising, inspirational, brands
when it comes to diversification.
Who could have thought a crisp
brand would open a theme park?
But Tayto Park has changed the
brand’s fortunes.
With the success of Tayto Park as a
family entertainment destination, it
has helped expand people’s
occasions for eating crisps as more
of a family moment.

26. So what?
Diversification as a way to target
new audiences and occasions
In this post-demographic, disruptive marketing environment,
old strategies and tactics are not working as well.
It is becoming more important than ever to look outside your
category, audience and product to look for new opportunities
to reshape your brand and grow sales.
Check out our Slideshare for more.

27. Interested in
learning more?
Contact us.
Thomas Geoghegan
Shane Doyle
Andy Pierce
16 Sir John Rogerson's Quay
Dublin 2, Ireland
Tel : +353 1 649 6316
Email: info@coremedia.ie