More and more we are seeing references to the strategies of diffusion branding within the fashion industry. Diffusion branding may be a newish term in marketing lexicon, but its practice has been with us a long time. For decades the strategy of launching a new offering to appeal to a different segment of the market under the umbrella of an established brand was referenced as creating a ‘sub-brand’ or a form of ‘brand extension’. The degree to which the strategy draws endorsement directly from the original brand is always a delicate one.
In the case of fashion brands, a ‘diffusion strategy’ can typically only operate in one direction and that is from more high-end exclusivity to more mainstream market appeal. Brand owners find it very difficult to broaden their offering in the other direction, from mass to exclusive. Prestige brands typically have a large sector of the consumer market who aspire to owning them, but simply cannot afford to make the purchase. That same unsatisfied aspiration does not exist when trying to lift brands from lower end positioning to higher end.
The decision to adopt a ‘diffusion strategy’ is driven by the brand owners desire to tap into this potential market by creating a cheaper variant. Some brands play directly with their names in a way to transfer their equity and draw down on the halo effect available to them. Fashion brand Calvin Klein Collection’s exclusive range, has its diffusion range leveraging directly the equity by calling it simply CK. Likewise Christian Dior fashion brand uses part of its name directly in its affordable fragrance line with the Miss Dior range. Such a strategy provides cut through in communicating the fashion heritage associated with the new range.
Compare that naming strategy with Australian fashion brand Ginger & Smart. It’s diffusion brand has adopted an entirely different name in Akin. With such a strategy there is a need to build the connection back to Ginger & Smart through other marketing communications.
Regardless of what naming strategy companies adopt, they need to be single minded about protecting the equity in the more prestigious original brand. There needs always to be meaningful differentiation between it and the diffusion brand. Likewise brand owners cannot lose sight of the role the original brand plays in generating an aspirational hunger to wash over the diffusion brand. If done well there is considerable upside.