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Brand Dilution: Definition, Causes and Examples

Brand Dilution: Definition, Causes and Examples

Brand dilution is something that most people have experienced at one point or another. You find a brand you know and love, but over time find that it's grown in a direction that just doesn't align with your needs or values anymore.

As organizations grow, it's common for them to take on new product lines, trust more people to represent the brand or even acquire other businesses. With this, comes a risk that the original promises, values and quality the brand represented become less and less prominent.

In this post, we cover what brand dilution is, what causes brand dilution and examples of brand dilution from susceptible industries.

What is Brand Dilution?

According to Hubspot, “Brand dilution is when a company’s brand equity diminishes due to an unsuccessful brand extension, which is a new product the company develops in an industry that they don’t have any market share in.”

When a company extends their brand unsuccessfully, they dilute the power of their original brand story and existing associations with the brand. Typically it’s due to attaching a once-strong brand name with a new, lower quality product, or a product that’s extremely different from the core brand (which leads to confusion and the brand losing customer trust).

Another situation where a brand can become diluted is when the company tries to grow, and the team becomes too big, too fast. This causes dilution in two ways: the first is that the team is stretched too thin which results in lower quality work; the second is that they lose control of the brand due to a lack of brand standards.

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What Causes Brand Dilution?

Here we’ll expand on the top three reasons behind brand dilution:

  1. Stretching Capacity Too Thin
  2. Introducing Unrelated Services or Products
  3. Losing Control of the Brand

1. Stretching Capacity Too Thin

When organizations take on new product lines or services, they can require teams to work beyond their capacities. When teams are stretched thin, standards can be diminished and result in a lower quality message or product. For example, asking a creative team to now work on the messaging for a brand extension along with the existing brand will likely result in disrupted workflows, unreasonable deadlines and inconsistencies.

2. Introducing Unrelated Services or Products

A company taking on new products or services that don’t align with the existing brand values or messaging is often a recipe for disaster. Not only can it confuse your supporters, it can also deteriorate the perceived value of the overall brand.

One famous example among marketing professionals is the Cadbury instant mashed potatoes story. In the 1960s, Cadbury launched a product called Smash, which were instant mashed potatoes. The product sold well, but at the expense of Cadbury’s overarching reputation as a premium chocolate brand. Due to extreme brand dilution, Cadbury sold Smash in 1986 even though the product was popular.

3. Losing Control of the Brand

The more people have the ability to represent a brand, the higher the risk for dilution of that brand. For example, imagine a brand with full control of any and all marketing messaging, then, in an effort to grow the brand, they open up offices across the country where now dozens or even hundreds of team members are able to send out messaging on behalf of the brand. This is where the dilution can happen - outdated logos, slogans or images; activities that are not on-brand; social media messaging that doesn’t match the official vision of the brand. This kind of dilution can be just as harmful as a failed brand extension.

Four Ways to Prevent Brand Dilution

While there a number of ways to prevent brand dilution, there are 4 we recommend:

  1. Prioritize the Core Brand
  2. Introduce New Products Slowly
  3. Communicate the Brand Clearly
  4. Provide Access to Approved Brand Material

1. Prioritize the Core Brand

Holding on to earned, loyal customers, and fighting for the brand associations you’ve worked hard for is highly important. Brands should be selective when choosing how and where to expand products or services. Always look at expansion through the lens of protecting the core brand, which is so important for the company’s longevity. Ensure that any new ventures won’t contradict the messaging or reputation of the existing brand.

2. Introduce New Products Slowly

Provide the necessary space and time to introduce new products with care and thoughtfulness, without diminishing quality. New product development and roll-out processes deserve a place in the overall brand strategy.

3. Communicate the Brand Clearly

Make sure that every single person who has the capacity to represent your brand understands the brand messaging, values and expectations. Having these brand standards in place allows these individuals to provide the same messaging and level of service that are already aligned with the brand.

4. Provide Access to Approved Brand Material

Ensure that everyone who is representing the brand is set up for success. This means providing the team with easy access to brand assets, such as logos, images, graphics for social media, etc. It's very important to standardize brand messaging and collateral as part of an overall brand strategy—and then to make it accessible.

Brand Dilution Examples by Industry

Franchises

The most notorious industry for being impacted by brand dilution in the franchise industry. This is mainly due to the free rein that franchisees are granted when it comes to creating and distributing marketing collateral or messaging. It’s almost impossible to maintain control of the brand when multiple franchise owners are providing different levels of service and not adhering to any specific set of brand standards.

Consumer Products

The consumer product industry is typically the most susceptible to failed product extensions. One example here would be the documented failure of Colgate Kitchen Entrees—when the well-known oral hygiene brand tried to take advantage of the take-home meal market in 1982. This confusing move to link toothpaste and frozen meals threatened to dilute the brand. It can be hard to evaluate when a brand extension is too far out there—but this one should have been obvious.

Technology

The problem in the tech industry is that things move so fast because of the highly competitive environment that it can cause brands to release new features or products at an extremely fast rate—too fast to get things right. Tech companies need to be meticulous in the planning of releases to prevent stretching the team too thin, and not doing the brand justice, thus causing brand dilution.

Keep Your Brand in Tip-Top Shape

A strong, well-represented brand starts with consistency. A consistent brand not only improves brand awareness and recognition, it's also linked to an increase in revenue. Don't forget to review these 3 brand guideline essentials.

MediaValet is a leader in cloud-based digital asset management that helps organizations manage, organize and share their digital assets, improving productivity and increasing ROI. See MediaValet in action today.

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