Two examples of German companies trying to diversify, one successfully, one not. Both went into related but still new markets, with new products. So according to the Ansoff Matrix this was diversification.
The not-so-successful example comes from Meggle. To most Germans, this is a butter brand. A couple of years ago they moved into another dairy market but one that didn’t feel right: yogurts and desserts. The line didn’t last long here in Germany, as for most Germans the first thought when you hear Meggle is, and may always be, “butter”. And that’s not a good taste in the mouth when eating a dessert.
The products are now on sale in countries outside Germany, where the core strength of Meggle – butter – is not, ironically, a weakness and limiting their ability to diversify.
The much more successful example for me comes from Frosch.
To most Germans, this is a cleaning or detergents brand. I first met it as a toilet cleaner. It has green credentials despite all the nasty chemical associations. It moved into a new target group with new products: liquid hand soap.
The brilliant move was to take the brand mnemonic, a symbol your customers should remember, and make it tangible with a playful symbol in the soap bottle. Their mnemonic is a frog. They’ve now got this frog in the bottle. So once the packaging’s been ripped off and the labels are gone, the frog is still there. Kids love it. Adults remember. Top score!
And a leap forward for the brand too, I feel.
I hope it catches on and also makes them money, because putting that frog in the packaging will be expensive.