Choosing to increase product breadth by introducing a completely new product line is an extremely risky decision which has resulted in great success and abysmal failures for businesses in the past. Increasing a business’ product breadth is especially difficult for those brands that become extremely well known for what they do. Dr. Pepper Snapple Group, the maker of such soft drinks as 7-Up, A&W Root Beer, Canada Dry, Orange Crush, Snapple, Dr. Pepper, and more made the decision to introduce a new product line of marinade and steak sauces hoping to increase its brand presence in markets other than the soft drink market. This experiment in increasing product breadth ultimately resulted in failure, as the marinades were not well received by the consumer and product was eventually discontinued.
Several companies have suffered the same consequence by trying to expand their product into new lines but there have also been those who did so successfully and with a great degree of success. Coca-Cola launched one of the most successful brand expansions in 1982 with the introduction of the Diet Coke. Coke’s existing diet product, the Tab, was successful but did not hold the Coca-Cola name due to fears that it may compromise brand equity. “Diet Coke was the first new product since 1886 to use the Coca-Cola trademark,” making it a risky decision at the time. However, this risk paid off extensively with the Diet Coke surpassing sales of Pepsi in 2011, making it the ‘the second-most popular soda in the U.S., behind Coke.’”
Choosing to increase product breadth is a risky business decision; if the resulting product is marketing incorrectly the company will suffer a major loss and may even hurt their brand equity with the decision to expand. Doing so properly takes an extremely well thought out marketing strategy and is a risk which even business giants such as Coca-Cola take great care before implementing.
http://www.businessinsider.com/the-10-worst-brand-extensions-2013-2