How to Diversify Your Product Line

Diversifying your product line can be a powerful way to expand your company’s footprint, improve average spend per existing customer and capitalize on growth opportunities. Unfortunately, many business owners find themselves so focused on creating one product or line of products that they lose sight of the benefits of product diversification.

Whether you’ve considered product diversification before but weren’t sure how to get started or you’ve never considered branching out, here are some tips on how to diversify your product line to get lasting benefits:

Consider Extending the Uses of Existing Products

One popular diversification strategy is to extend the use of existing products. Product extension essentially means re-evaluating your existing product line to see if there are ways to get more usage out of each product. This method of diversification allows you to create a different version of the same product, but at the same time, it allows you to offer upgraded or expanded offerings.

The real benefit here is that you generally end up spending less since you’ve already completed the product development phase. Instead of creating an entirely new product, you can spend resources on marketing your new value proposition for the extended or enhanced version of the existing product. This can also be beneficial since you likely have built customer trust with existing products, so marketing an upgraded or expanded version tends to be easier than marketing brand new products with no trust signals baked in.

Diversification as a Part of Your Branding Strategy

In keeping with the above product diversification strategy, adding on features or extending a product’s usage also helps with brand extension. One of the keys to a healthy growth strategy is maintaining the ability to evolve with your customers’ needs and market demands.

While it’s great to have solid branding and be known for creating one great product, failure to evolve your branding over time can mean getting left behind as customer expectations and the realities of markets shift. Companies that offer a more diverse portfolio of products are able to capitalize on opportunities and minimize distressing market conditions.

Take a Page From Disney’s Playbook

To drive this point home, take a look at the Walt Disney Company. Arguably one of the biggest companies in the world, Disney is known for its theme parks and animated movies, but the company has taken a serious approach to diversification of its products and services by purchasing brands like ESPN, National Geographic and streaming service Hulu. Additionally, Disney operates a variety of cruise lines and owns a number of entertainment studios, including Marvel Studios.

This strategy allows Disney to continue to create memorable moments for customers across a wide range of mediums. If one isn’t particularly popular with consumers at the moment, Disney can shift gears to focus on its other properties and services.

Look for Opportunities to Strengthen Your Market Position

Of course, you can also focus on product diversification in one specific market to strengthen your position. This approach is the opposite of what Disney does when it comes to diversifying a product line, but it can still be beneficial. When you create diverse products in one market, you stand to gain a greater share of the market. This is similar to how brands like Coca-Cola also develop and produce bottled water and juice.

The idea here is that by creating a diverse range of products that all serve the same market, you gain a greater share. Competitors may also have a harder time beating you simply because they now need to target all of your different products and services. If a customer decides to go with one of your various products or services, you still make money, but your competition is going to struggle since they have a broader range of opponents, all of which are tied to your company.

Use Diversification to Address Cultural Differences

You may also be able to attract more customers with diversified products if your marketing strategy involves reaching customers across different cultures. Local cultural norms and practices can play a big part in how a brand or product is perceived. When your diversification strategies take into account the differences in your customers’ cultures, you have the chance to market to a wider audience and increase profits.

This can also mean having the ability to reach more areas if your company decides to expand nationally or even globally. Remember that just because your products or services are marketed successfully in one area does not mean these same strategies will pay off in another.

In fact, this is why most successful businesses work with digital marketing experts when expanding and diversifying. Having a team of digital marketing experts on your side can help you look for opportunities to reach audiences in new areas as you put your growth and product diversification strategy into action.

Do Your Research First

Before embarking on a product diversification project, take the time to conduct deep research. Diversifying your product line for the sake of diversity isn’t a winning strategy. Instead, you want to look for ways that product diversification can fill voids that exist for your customer base and market. Research may mean asking customers of your existing business to fill out surveys regarding features they want out of your products or products in your industry.

You can also do some sleuthing on the web by visiting forums and message boards related to your industry. Take a look around on social media and review sites as well to see what consumers are talking about when it comes to features for products like yours. This research can help you find avenues to pursue to create a more diverse product line that solves customer challenges and helps your brand gain market share.

Enhance Your Growth Strategy – Contact E-Marketing Associates to Get Started Today!

If you’re ready to take advantage of the power of diversification for your products and market your business in innovative ways, contact E-Marketing Associates. Our experienced marketing experts can help you find new opportunities to generate leads and increase profits through product diversification and online marketing strategies.

Get started today with your free, personalized small business marketing report that will show you how your business stacks up against the competition. This free resource can also give you insight into how to diversify your product line when you utilize our expertise to get ahead. Together, we can create growth strategies for success.