Vision and strategy
Brand diversification has to be undertaken in a very considered way, starting with a clear vision of what the company will look like once diversified. The business also needs a defined strategy with goals and objectives, action plans and timelines. All departments, from management through to design and marketing need to be on board, and up for the challenge. It can be very demanding for a clothing designer, for example, to suddenly be expected to design phone cases.
Effective diversification is about finding areas that enhance an existing offer, building expansion into new but complementary areas and bringing customers back to the main business. Whilst it’s possible to develop non‐related product areas, in my experience, items that are a natural extension are easier for everyone, from possible partners to customers, to understand.
Creating the right look and feel is crucial. However diverse, products need to look like they originate from one source so the merchandise is complementary. This is particularly important if working with a number of licensees. Orla Kiely has done a fantastic job of creating a recognisable look; her classic stem design can be seen on products as diverse as kitchenware, fragrance, wallpaper, stationery and lamps. All the products complement each other in a way that reinforces the brand, adding quality and prestige.
Creating the right partnership
Finding the right partners is paramount to success. A retailer may choose to go it alone by hiring buyers, merchandisers and quality controllers to help develop ranges in‐house. However this can be risky for several reasons, not least a lack of experience in the field. Unsuccessful partnerships have occurred where brands have tried to extend too far too soon with poorly thought out or badly executed ideas which quickly run out of steam.
Having a license agreement means that experts are on board from the very beginning. Joining with an established business in the given area ensures a combination of the best of all companies, effectively transferring brand name and reputation to new products and services.
However, whilst this strategy has numerous advantages, there are still issues to consider, for example, who will have overall control? The brand or retailer may be reluctant to surrender their precious intellectual property to another party as the licensee may then use the brand, designs or prints in a way that doesn’t sit well with their partner. It is important to be prepared for an initial settling down period to create boundaries and build trust.
One solution is to hire a professional licensing consultant who can bring objectivity, experience and expertise to the relationship. They will have the knowledge to investigate and direct the company to the best people from the outset, saving time and facilitating key relationships with retailers and partners.
There’s no doubt that diversification can have fantastic benefits – if done properly. When the time is right for a business, find the right product with the right partner and get the right advice to create firm foundations for future success.
Contact
The Salisbury Consultancy @:
Kathy@thesalisburyconsultancy.co.uk W:
www.thesalisburyconsultancy.co.uk
www.a1retailmagazine.com
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