Building Brand Equity by ‘Owning the Home’

The importance of diversification has been an ongoing mantra
in our industry and a common theme in my previous blogs.  Innovative manufacturers such as Samsung and
LG have taken aggressive steps to diversify and ultimately own the home – from
TVs in the living room to refrigerators in the kitchen to washer/dryer units in
the laundry room to tablets and cell phones everywhere else.  In doing so, they have extended their brand
equity across multiple product categories, are thriving and are less
susceptible to market downturns.

In addition, both Samsung and LG were able to successfully
penetrate the major appliance market because consumers were already familiar
with their electronics. This is a perfect example of how a manufacturer used its
existing brand equity to catapult new products into the marketplace with the
same customer base.  Some manufacturers –
most notably in the major appliance space – remain inextricably linked to a
single product focus, which remains risky. 
If they continue on this path, they will find it challenging to keep up with
those companies that are seeking to own the home. 

Businesses need to think far beyond their current
capabilities and maybe explore product ideas that are not inundated with
competition. To get to the next level, they should also consider strategic
partnerships where they can mutually leverage capabilities.  Will we one day see your typical major
appliance company working with a consumer electronics brand to strengthen their
own brand awareness together?

Interestingly, some manufacturers that have been first to
market with revolutionary products have failed to effectively market these
products due primarily to slow initial consumer adaptation rate that ultimately
led them to abandon production which can be seen across multiple verticals.   Others
have capitalized on these same ideas and excelled in the market – even it’s a
lost leader for a period of time – because they know that consumers are always seeking
innovation.  Those manufacturers that
fail to challenge themselves will most certainly be at a disadvantage.