What Is Brand Dilution? (+ Brand Fail Examples)

What Is Brand Dilution?
(+ Brand Fail Examples)

Whether you refer to it as squash, cordial, syrup, or even by brand-name like Ribena, these icy juice drinks are a go-to for millions on a hot summer‘s day.  

But, you have to get the water to Ribena ratio just right.  

Overdilute your drink, and your drink loses some of its pizazz, it doesn’t meet your expectations, and it fails in its very purpose to deliver a certain experience.

Brands, just like squash, can also be diluted in the same way..

In this article, you’ll discover what brand dilution is and how it impacts brands, with some examples of brand dilution to help demonstrate.

What Is Brand Dilution? (+ Example of Brand Extension)

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What Is Brand Dilution? 

Brand dilution is when a brand loses some of its value from overuse or overextension. 

The core purpose, idea, and message of a company’s brand gets lost somewhere along the way – it gets watered down. 

Let’s look at this from the point of view of a brand manager’s brand strategy. 

A brand strategist’s job is to shape the brand’s perception in the audience’s mind. 

Brand dilution happens when businesses decide to create products or services that don’t align with what their customer base wants or with the reputation or brand equity they’ve built. 

This is how it works: 

  1. A brand manager takes time to build a brand image and brand name based on quality products. They create brand equity over time. 

  2. The company launches a new product line that doesn’t live up to customers’ expectations in some way. 

  3. The company confuses, overlooks or disappoints its audience, or worse, breaks its brand promise, leading to diminished brand value. 

  4. Multiply this effect over many customers – what you’ve got right there is extremely damaging brand dilution. 

In short, brand strategists must make well-considered decisions to protect the reputation, equity and value built up over time, or risk diluting the asset they work so hard to develop.  

How Can Brand Dilution Happen? 

Brand extension refers to when a company uses an established brand name to dive into a new product category, trying to capitalize on that existing brand equity to branch into new markets. 

Launch a failed product or overextend your brand, and you get brand damage. 

One example is Cadbury’s instant mashed potatoes, launched in the 1960s. Known for high-quality chocolates, branching into the low-cost savoury products market seemed a strange move. 

While the mashed potatoes actually sold quite well, the move damaged sales of its iconic flagship chocolates, likely due to the muddled messages presented to its target audience.  

Cadbury ended up selling Smash in 1986, preferring to stick to what we know and love. 

Yet, a brand extension can be successful if the company doesn’t stray too far from what the target audience expects from the brand. 

Think of Harley Davidson – a motorcycle manufacturer creating an attached clothing line, or Colgate launching its toothbrush range to complement its toothpaste. 

Both of these moves align with the original brands and the reputations they built.  

It highlights the value of sound consumer research and marketing strategy that considers who the customer is and what they want. Not exactly rocket science is it?  

To explore this further, let’s look at some more examples. 

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