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Brand Driven Innovation creates Strong relationships with customers. It also further strengthens its relationship with consumers who could, in the future, move out of town and buy its products.
During the time of stagnating markets, technological disruption innovation, and rapid changes in consumer behavior, where can big brands find growth? One popular path is through brand extension i.e. stretching a brand into an adjacent market where its value proposition is still relevant to consumers. Classic cases include Colgate’s sideways move from toothpaste to toothbrushes, Nivea’s from body care to hair care, and Gillette’s from razor blades to shaving foam.
However, some executives are taking this approach a stage further by using their brand as a springboard to drive innovation in an entirely new market. Take the Weather Company, which owns the Weather Channel, as an example. It has used its deep weather-data assets to move beyond the TV business, extending successfully into new markets by supplying data and forecast models that aid companies make better decisions.
Apple’s introduction of the iPhone is, of course, a well-known example of how it became an attacker by carving out new business spaces that capitalize on the exclusive link its brands which shall have bogus with clients, but is that innovations not only achieve impressive results in their own right, but they frequently also create a halo effect by attaching cachet to the original brand? In the year the iPhone was launched, for instance, sales of Apple Mac computers rose by 16 percent almost eight times the growth rate for personal computers overall.
This kind of brand-driven innovation has derived of age in the earlier few years for a number of reasons. If one is an incumbent with a dominant position in a saturated market, the chances of gaining much more share may be slim. Acquiring a new category could be the only realistic option to achieve internal and external growth targets. In addition, brands are progressively defined not by what they communicate or the campaigns they run but by the kind of customer experiences they provide. The brand-driven formation can be an instrument to strengthen or sharpen a brand’s positioning consider how Apple’s brand strength seems to grow with each new category it enters.
Some powerful brands have highly distinctive characteristics or associations in consumers’ minds. When they exploit on them to enter new territories rather than simply colonizing a neighboring category they bring innovation to their new domain.
Distinctive brand valuation and trust. A new entry into High Street banking at a time when trust in the sector was at an all-time low enabled it to take advantage of its status as a brand known for giving customers a better deal. An established brand name can also act as an influential form of endorsement in new markets: National Geographic Society’s shift from magazines to television channels, expeditions, and more recently, retail stores that sell books, clothes, and travel gear is just one example.
Strong relationships with customers. It also further strengthens its relationship with consumers who could, in the future, move out of town and buy its products. Effective brand extensions are likely to make use these advantages, rather than one in isolation. For instance, Disney’s venture into English-language teaching is built on its established brand equity in entertainment, its deep understanding of how to engage customers, and its operational capabilities and expertise in multiple countries and cultures.
Every established brand does not succeed at entering new markets. To find out if one can, start by asking does it have brand extension angles or emotional benefits that could travel to other categories? If so, what might those categories be? And how can you use your benefits to create something new and different?
Next, where do you want to play? Define one’s brand’s aspirations to ensure one focus the innovation efforts appropriately. Then identify trends and discontinuities in tangential markets, analyze the competitive landscape and evaluate any customer relationships the brand may already have. Vital successful attackers are careful to deconstruct their assets and understand which ones can drive value in new markets.
Having selected one’s target markets, define the brand’s value proposition in them a process that calls for a good dose of creativity, deep immersion in customer needs, and sharp insight into decision journeys. Many delays were unsuccessful through lack of brand relevance. So ask, what is our brand’s value proposition? Does our brand fit this new angle?
As an incumbent, one needs to assess a new market as thoroughly as a start-up would. The best performers invest in a detailed analysis to estimate the scale of an opportunity. Is the growth potential worth the effort? What does the competitive dynamics look like? Such an analysis should uncover unmet needs that can highlight how much scope there is to introduce disruptive products or services.
To understand customer needs and customer decision journeys, leading companies go beyond the basics of existing data sets, focus groups, and surveys by adopting advanced qualitative research techniques. They use ethnographic studies, home interviews, in-store observations, mobile-photo journals, shop along, and a range of other innovative methods to check the fit between their proposed brand extension and their target consumers. Finally, make sure that the organization is fully prepared and ready to go. By meaning, a brand-driven innovation will take one outside the core expertise. Make sure one have enough knowledge about the new business start-up to judge the right moment to enter. Develop a rigorous reverse profit and loss that helps clarify the objectives and assumptions underlying the business Valuation model. Think about how competitors might react and what the response should be. Check out any regulatory aspects governing the new market and identify the variables that could affect cost projections and supply.
Although it’s too early to judge how successful the new wave of incumbent attackers will be, it provides food for thought for established businesses seeking untapped pockets of growth outside their core markets. Carefulness is required; not every big brand has what it takes. But some brands, it seems, are so important to us that their entry into new markets can have dramatic effects not only carrying consumers with them but also kick-starting new growth and giving a boost to core products too.