Impact of Growth Strategies and Diversification on Corporate Branding

Branding & Product-Market Expansion

Corporate Branding and Product-Market Expansion

Growth strategies developed within companies vary according to the nature and dynamics of the market or industry that the company's products and services are competing in. Different strategies are utilized, such as increasing market penetration, undergoing a market expansion, implementing vertical integration, or developing innovative/creative ideas for the market/industry. In the market of consumer goods and services, a prevalent practice and the strategy that has proven to be economically viable and effective in strengthening corporate branding is through product-market expansion.

In product-market expansion, the company increases its growth through the development and launch of additional products and services that are still categorized under the corporate brand but extends the company's scope by expanding or adding more markets apart from the existing markets that the company already operates in. In product-market expansion, the company thinks about the specific market that it wants to include in its portfolio, and upon determining this market, products and/or services are developed. A company could initially operate within the consumer goods market, but could eventually venture into telecommunications, infrastructure, and transportation. Ultimately, in using this growth strategy, the company or corporate brand is strengthened, as it becomes known as a brand leader in diverse kinds of businesses. Increasing and expanding the market coverage means developing products and services that consumers need in different aspects of their lives. Because the company brand has managed to penetrate every aspect of the consumer's life through its products and services, its branding becomes more salient and in effect, easily remembered and stronger in terms of brand recall and retention when thinking about products and/or services under a specific category and market/industry. Diversifying the company's markets by expanding its product and service offerings also mean expanding the demographic market coverage of the company, increasing not only awareness, but also potential and sustained sales if the product or service satisfies consumer needs and wants in a particular category or industry.

One of the more popular and successful examples of product-market expansion and diversification is PepsiCo, Inc. An American multinational corporation, PepsiCo was originally known for its beverage product Pepsi Cola. However, PepsiCo's product-market expansion strategy led to the merger of the brand Frito Lay, Inc.; acquisition of another beverage brand, Tropicana; merger with brands Quaker Oats and Gatorade; and eventually further expanding its expertise in the food business through Yum! Restaurants International, which owns popular quick service restaurants such as KFC, Taco Bell, Pizza Hut, and A&W.