Rubber Brands

When it comes to building a brand, it can become far too easy to set your sights too high. Niche brands sometimes become successful and want to become all-encompassing in their industry, while other successful brands decide to diversify into other markets. In many cases, over-diversification exposes a brand’s inabilities to operate effectively outside of their core competencies and can lead to failure and lost revenue. Not that you should ever limit your brand and stop yourself from building it up as much as possible; just realize that stretching something too far usually leads to breaking.

A fitting example of operating a successful brand outside of its comfort zone was seen years back by a company that started right here in the Tampa Bay area. Do you remember Hooters Air? It might have seemed sensible applying a somewhat risqué yet fun and service oriented concept to the airline industry. People loved it for lunch and dinner, so why not for travel too? Hooters started an airline in 2003 and operated until 2006, servicing travelers to limited destinations. In the end, they lost money and had to close shop and at least spun a story about how the lost money could be chalked up to a marketing expense. The truth was that they weren’t prepared for a cutthroat industry that they had no experience in. Some readers might be thinking about Virgin Atlantic Airlines right about now, but keep two things in mind:

  1. Steven Branson always operates his diversified companies as separate entities, run by separate sets of directors who have industry experience.
  2. Virgin has partnered with other carriers externally to compete as well as having partnered with Singapore Airlines–from an internal ownership perspective–to ensure that they have the products, services and knowledge that are necessary to compete.

Hooters did neither of these things and it turned out that they are better at consistently producing wings and scantily clad waitresses than they were at flying planes. Not to knock Hooters (after all they are a very successful company with an international presence); it’s just that in this case they stretched their brand too far. At least they threw in the towel before their mistake cost their actual company a lot of money.

It is easy to point out businesses with entrepreneurial spirit that go a bit overboard outside of their industry. The truth is that some successful brands overextend themselves inside their industry. Five years ago it seemed as if Myspace was going to own social media. They began as a niche website that allowed independent musicians to share music and ideas. As ordinary people became interested in the concept the site grew very quickly. Once Myspace had the attention of more than artists and those who appreciate independent music, the company began to bite off a little more than it could chew. The company also stopped improving the product to keep up with the demands of its users. As we all know some kids from Harvard ultimately put together a competing platform that spoke directly to social use, and Facebook dominated the market–leaving Myspace looking for ways to stay alive.

As a result Myspace decided to quit stretching the brand and get back to basics. The company is now refocused on providing information pertinent to art and entertainment–the core competency that built them company in the first place–and is leaving the more social and engaging aspects to those who are better equipped. Facebook newsfeeds can now be viewed via Myspace, and Myspace’s new look focuses on entertainment and community appreciation of artists. While it is too early to tell, it seems as if this is a great move for Myspace. The company is getting back to basics and looking for ways to expand that relate to what it’s good at. It might seem like giving up to some, but consider that staying alive and getting back to raking in revenue trumps showing that your brand can do anything.

Just to reiterate, the point is not to discourage growth or thinking outside of the box. In fact both of those things are what every marketer should be focused on daily. The point is to make sure that core competencies and realistically evaluating the market remain integral aspects of planning and forecasting. To keep a handle on what is going on take some time to check in with your local chapter of the American Marketing Association. You never know what you will get out of a little networking.

Ad Age

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