Should You Expand into Multiple Brands?

24 Jul 2018 By: Jessica Eyre


If you’re a creative type starting a business, it can be all too easy to want to share all of your thoughts and innovations with the world. You think perhaps it’s the one divine allotment of ingenuity you will ever be granted, so you want to get it all out there before the opportunity is snatched away from you.

Such was the case for Rocco Giordano, founder of Faded Royalty, a New York-based street clothing company. Rocco and his business were featured on the popular CNBC show The Profit, where billionaire businessman Marcus Lemonis helps struggling and failing businesses get back on their feet.

In this particular episode, Rocco found himself spread too thin, and his business was suffering as a result. Faded Royalty started modestly through the offering of hats, but had since expanded to a whole clothing line. However, his fashion wasn’t catching on, and Rocco was on the verge of losing his business.

When Lemonis came onto the scene, he attributed the business’ shortcomings to a lack of vision. There was no congruent brand identity, and he didn’t think that Rocco knew who his customer was. Essentially, he was too attached to each individual piece he was making and wasn’t considering the big picture.

Managing multiple components of a business is a tricky balancing act that requires an intimate knowledge of your brand, financial situation, and your customer. If you are considering expanding your business to multiple brands, take into account these two best practices to ensure you aren’t getting in over your head.

Don’t muddle brands; know your limitations.

Proctor and Gamble higher-ups have found that as much as 80 percent of new products will perform below expectations. It doesn’t matter how much time, effort, and precision have gone into the conception of a new offering: a lack of a clear vision and purpose for a new product or brand can (and will) be the demise of the undertaking.

Before expanding your brand offerings, you need to consider these two components: vision and purpose. What makes your existing brand powerful? Can your new idea make the existing brand stronger? And is there an actual need for a new brand?

Understand the brand’s equity.

To learn from the blunders of the past, we can look to the late 1990s and early 2000s. This era saw an insurgence of businesses attempting to branch their existing brands into untapped or emerging markets to little effect (think the Arch Deluxe from McDonald’s or the Zune from Microsoft).

The Arch Deluxe was created in 1996 to give parents a more “adult” burger option when on an outing with their kids to the restaurant. As it turns out, adult customers at the time were fine with McDonald’s existing offerings. And the Zune from tech giant Microsoft sought to compete in the media technology market against Apple’s iPod. However, the Zune—released six years after the first iteration of the iPod—lacked strong brand identity to compete with the iPod.

Prior to these two branding flops, McDonald’s and Microsoft were already wildly successful companies. But in a rush to become more profitable, perhaps both businesses lost sight of the equity of the existing brand. Learn from their mistakes: when expanding your brand to new markets, consider which qualities of your products carry weight and which don’t.

Apply innovation to the existing brand.


Put simply, your brand is the culmination of perceptions associated with your product. It is the vehicle in which you can attribute the worth of your business. As such, you should strive to embolden your flagship brand as much as possible.

Innovative disruption is the name of the game these days. Market leaders and up-and-comers alike are constantly at war trying to out-innovate each other, thinking of bigger and better ways to efficiently fill consumer needs.

In his article Creative Matters: Disruptive Innovation And Branding, brand consultant Marc Posch describes a concept that defines the echelons of a successful brand. Posch says surviving requires skills, competing requires strength, and aspiring requires values.

“Real change, however, happens on the macro level (aspiring), where design, engineering, manufacturing and marketing are growing into something more organic, and entire industries — if not societies — are being transformed,” Posch writes.

This aspirational level is where the strongest brand identities lie. This is where your Apples, your Nikes, and your Starbuckses live; these brands are able to leverage their values to meet the needs of their consumers better than any of their competitors. And whenever Apple releases a new tech device or Nike reveals a new shoe design, do you see them branching out into a new brand to market the product? No. That’s because their existing brands have become synonymous with innovation, aspiration, value, and success.

Make a connection with your target.

“Relationship and connectedness are the pre-condition for change,” says author and consultant Peter Block. “Every meeting, every process, every training program has to get people connected first. Otherwise the content falls on deaf ears.”

It’s no secret that your customers are the lifeblood to the success of your business. With the advent of technological advancement, it’s now easier (and more important) than ever to interact with, engage, and learn from your consumers to remain competitive. And at every point of interaction, engagement, or analyzation, there is an invaluable chance to increase your brand awareness.

So, should you be concerned with expanding and managing multiple brand images for your business? If you are already engaging your target audience through multiple brands, is it proving to be a viable strategy? All these answers and more lie within the customer’s perception of your brand.

Practice segmentation.

Segmentation is the ability to break your customers out into different user groups in order to provide the most targeted messaging and service you can. Audience segmentation is a proficient way to understand who is interacting with your brand and why.

You should be interested in parsing out your offerings based on your different audience’s wants and needs. If you find a wide variance in the types of people who are utilizing your products and services through segmentation, it is likely a worthwhile marketing endeavor to cater to each of those groups. Offering different varieties of products and attributes will help you best cater to your customers, and can oftentimes be the grounds for expanding out into multiple brands.

Conduct customer surveys.

If you have ever been shopping either in person or online, you are likely aware of the persistence of companies for you to complete a customer survey. These often come in the form of satisfaction surveys and are a cheap and convenient way to aggregate data about your brand.

An article posted by SurveyGizmo outlines a great marketing strategy that you can utilize through customer surveys. When done correctly, a customer satisfaction survey can produce an array of insights about your company and your brand:

  • Brand Recall: Can customers automatically associate your brand with a service or product?
  • Brand Recognition: Does your brand stand out when compared with competitors?
  • Brand Identity: What brand has your company created?
  • Brand Image: What brand do your customers perceive?
  • Brand Trust: Is your company trustworthy?
  • Brand Loyalty: How many customers and how often are customers likely to continue using your products or services?
  • Customer Profile: Are you still hitting your target audience’s needs, or do you need to pivot?

Employing a live chat solution on your company’s website can also bring benefit for the visitor as well. Aside from the ability to prompt a visitor with a quick survey after the chat is completed, you can ask some preliminary questions to help facilitate the conversation before it begins. This helps produce more meaningful conversations and gives the live chat agent more time to think of an appropriate response.

So, should you be concerned with expanding into multiple brands? Multiple brand management requires a large investment of time and money. Oftentimes, focusing on your existing brand identity is a better route to resonation with your customers.