I was running a few errands and happened to drive by our local Whole Foods store yesterday. Outside, posted prominently on the front of the building was a sign that read, “Come experience our NEW DINER.” Further down the giant advertisement, the company was promoting its all natural cheeseburgers, breakfasts and other “diner-like” menu items.
That piqued my interest because I (like most people), could never imagine a diner-like experience at Whole Foods. So, I went inside to check it out. Wouldn’t you know it; this highly acclaimed innovator had just done it again. Whole Foods had created a complete diner experience in the back corner of the store, that looked, smelled and felt like everything people in the Northeast (especially in New Jersey) have come to expect in a local diner. And, the small restaurant was jam-packed with customers for brunch.
This experience led me to think about how much opportunity companies/organizations have to extend their products/services into entirely new areas, once they’ve built a trusted brand with their customers. Think about Wal-Mart and Target. Both have created super stores across the country that successfully deliver many new offerings that run so far a field from what their constituents are used to. But, their strong brand loyalty helps sell the way. For example, in Florida, I’ve seen Wal-Mart compete with Home Depot by actually selling lumber. And, in upstate New York, I’ve seen customers wait on lines to be educated about financial services (mortgages, annuities, life insurance products). In fact, if the government didn’t stop Wal-Mart, it would now be offering retail banking services. And, no doubt it would be successful at that as well.
Harley Davidson is another example of a brand that has such a cult-like following, that it naturally extended its brand into many different non-motorcycle categories to make tremendous $$$. Just do a search on Harley Davidson now and you’ll find branded scarves, pants, shirts, lamps, furniture, linens, towels, blankets and even board games (such as Monopoly).
There is so much clutter in the marketplace. Yet, for brands that have built real, sustainable equity with their audiences, this is truly a positive reality because it allows them to extend their brands in new arenas with the same base who are already believers. Those believers would just as soon purchase products from a company that they trust versus trying a different one, where no allegiance exists. I believe that this principle holds true for professional services and business to business brands as well. While the corporate purchaser might be more skeptical that his management consultant or public relations firm can offer the same quality in a unique service that is very different from what he/she is used to (say for example a management consulting firm now offering branding services to its client base), trust in the brand (and relationships with the firm’s people) go a long way to opening the door for an initial try.
Of course, none of this works unless the brand can live up to the promises it has always delivered on for its customers in this new area. But, there’s no doubt in my mind that those organizations who understand how to strategically extend their trusted brands/offerings into new industries and sectors where a void exists, will achieve far greater success… especially in today’s economic environment.
I totally agree with your post. Many a time, brands have to expand from their comfort zone and most often they do it great. Here in Argentina, for example, we have a famous brand of light milky products called "SER" which at first was associated with "light" or "diet". They started working on low-calory-products such as desserts, biscuits, water and fizzy drinks and so on by impulsing the idea of being healthy, feeling healthy.
Posted by: Mariana Sarceda | April 28, 2008 at 11:28 PM