In today’s competitive market, innovation is a must. Customers tend to get bored with the same brand if they do not make any changes. You may have only one type of product initially, but you need to explore your options and diversify your product ranges as time goes by.
The giant enterprise Amazon was initially intended to sell online books and look at its current stage. It was possible due to the diversification. We can find almost everything on Amazon.
This article will help you understand diversification and how you can implement that in your marketing strategies.
As we know, diversification marketing includes the strategy that works by adding new products or services to your product line. It can help you expand your business to the next level and attract a whole new audience. Once you explore a new product category, you’ll get a wider reach and a large audience.
There will be a time when you are required to diversify your product offerings, such as
- You have reached your limit in converting people to marketing segments.
- You have found a new product that will fulfill your customer’s requirements.
- Your business growth can only be achieved through new marketing segments.
There will be a time that your customers will expect a new product from your brand. For example, if you offer skin care products, your customers will also expect hair care products from you. And if you decide to launch them, your existing customers will happily try out your product.
Just like any other marketing strategy, diversification has its advantages and disadvantages.
- Minimized losses
When you introduce a few new products on your website, not all products need to do well. Some may underperform or fail to live up to customer expectations. So if some of your products will do great, you can calculate your company revenue.
It will help you minimize your loss and determine the performance of your product.
- Increased brand recognition
A diverse range of a product can help you get a diverse audience, resulting in more customers. The more customers you’ll get, the more your brand will be recognized. Apple initially launched computers, but the brand got its recognition through its mobile devices. Nowadays, Apple is known for iPhones and iPad more than desktops.
- Increased customer lifetime value
By offering more products, you create new opportunities for your customers to find value in your brand. The increased brand value will result in increased customer loyalty. When your customers are loyal to your brand, they won’t hesitate to try and promote your new products, improving your conversions.
- Brand Dilution
If your brand is known for a specific product, some customers may be skeptical while trying new products. It creates some level of uncertainty amongst the customers, and it may result in decreased conversions.
- Limited resources
As a small business, you may not have the extended budget to launch or market new products. It may hold you back in the marketing race.
- Inconsistent support for additional products
A new product requires constant support, and if your team cannot handle the new challenges or complaints regarding the products, you may lose valuable customers. Customers require constant support, especially when it comes to new products. Therefore, your team needs to be consistent while dealing with customer queries to increase customer satisfaction.
Lastly, your marketing team needs to learn to manage your new audience and target your new market segments. And along with that, your marketing team needs to allay some of the risks connected with diversification.
As a marketer, you know that one marketing trick doesn’t work for everyone, thus, you need to be flexible and open-minded while addressing the customer’s requirements regarding the new products.