Tribal Branding: Know Like Trust Series

This post is the final installment of the 3-part series on how to get customers to feel that they 'know, like and trust' your brand. The series was motivated by the need to create social media management (SMM) strategic content pillars. I think that, if I applied the 3 target behaviors / feelings to top, middle and bottom funnel positions, each one would apply in that order; ie 'know' will apply to the top, 'like' to the middle and 'trust' to the bottom. ... or depending on market needs, like when an unknown brand faces a huge challenge of gaining trust in expertise regarding a high-stakes problem, 'trust' and 'like' may overlap or be swapped within the cycle (of a month or whatever your expected cycle period towards conversion).

Even if your marketing campaigns have been successful in getting many people to know and perhaps even trust your brand, that does not mean that they will necessarily like your brand. You therefore need to connect emotionally, to have an emotional relationship with your market, ie you need to build brand affinity with customers. Afterall, brand affinity transcends brand awareness (which, as illustrated below, is only the first and most commercially beneficial of 4 levels of brand affinity). If developed successfully, brand affinity can motivate evangelism, the highest of the 4 levels. By such a point, customers make favorable purchase decisions based on emotional bonds with your brand. Needless to say, when measuring levels of affinity, the emotional connection is most important.

 

Brand affinity levels	Nature of consumer relationship with the brand
1.brand awareness	Consumer seeks to meet basic needs. Any product that does that meets basic needs will do. Won't go out of their way to get the brand.
2. infatuation	Consumer trusts the brand because the brand adds some value to their life. Consumer feels affection, appreciation or even obsession towards the brand.
3. fidelity	The consumer can truly relate to the brand values*. Consequently, the consumer feels an emotional connection and seeks out your brand specifically.  * Here are examples of core values to which consumers may relate. the style and image provided by a clothing brand very high quality images taken from Apple iPhones
4. evangelism	The consumer believes in your brand to such an extent that they want others to use the brand.

 

For the sake of making this post on the consumer's 'liking' or 'brand affinity' with a brand as clear as possible, I will discuss it in its extreme application; 'tribal branding'. However, recognize that, depending on the brand, tribal branding exists on a continuum. For instance, on one hand, Apple has applied it to the maximum extreme, while un-branded commodities not at all on the opposite extreme and  finally, most other marketed brands fall in the middle with varying levels of moderate tribalism. The majority of brands are in the center because they know that tribalism is hugely profitable but respond with only lukewarm attempts to tribalize consumers by claiming the most recently trending core values (like eco-friendliness). However, their corporate strategizing never quite achieves the same tribalism as Apple. 

Seth Godin's book 'Tribes' explains how to create tribes. Here is a quick breakdown of the take aways from that book along with some of my ideas on corresponding content pillars.

Lesson 1: Connection

Connection is the sine qua non of successful tribalism. Tribes comprise a group of people connected to each other, a leader and an idea. The idea may be based on anything like religion, politics, racial or other basis of marginalization, sports and so on. The communication is critical because back and forth messaging among members intensifies core values and attracts new like-minded members. Essentially, the communication is a catalyst for growth. Needless to say, social media communication makes tribalism easier than ever. In short, to transform any group of people into a tribe, 2 requirements must be met as follows. 

1. a shared interest
2. communication among members

Needless to say, connection is associated with the strategy of growth and tactical content pillars like ''Traction', 'Core Values' and, if you ask members to support each other and or ask qualification questions (about interests) as a pre-requisite to membership, also 'Ask / Participate'.

Lesson 2: Pull Marketing

Because the interest is so niche, the messaging is tailor-made to narrowly attract only the tribe's members (not everyone). It therefore pulls only those who share the tribe's passion. (See Push & Pull marketing). Needless to say, pull marketing is associated with the tactical content pillar like 'Core Values' with very specialized content. One option is to use specific questions from the consumer's perspective as the titles of your posts, ie rather than write generic titles. Social listening tools can help you to generate questions. For instance, rather than write a title as 'product x [your brand name]', write it was 'Is method a-b-c the best way to resolve problem y? -- or -- solutions for problem y'. Either way, establish the details in your brand voice and tone. 

Lesson 3: Leaders are heretics.

Heresy relates to having beliefs that go contrary to norms that are generally accepted in the broader community (like religion, sexual preferences and so on). In other words, they challenge the status quo. Example(s):

• When it was generally felt that computers would not be desirable at home, Steve Jobs, the founder of Apple suggested otherwise, likely seeming a little crazy by most who could not imagine his vision. However, Apple's Macintosh computer introduced the world's first home computer and therefore revolutionized the modern world. 

Lesson 4: Tribes are assembled, NOT created.

Godin explains that, before the formation of a tribe, its eventual members, although still disconnected and scattered somewhere in the world, they lay in wait to be connected. At the sight of a catalyst, they will join and do not need to be schooled on the interest.

• Black Lives Matter (BLM) and Black Twitter followers were not trained in a class room. Instead, they suffered for while and eagerly awaited their opportunity to be connected. Consequently, when the opportunity arose, they were eager to join.

Lesson 5: The tribe is not for everyone.

This is where I think many businesses fall short of the full tribal glory. I think this failing is due to lack of authenticity. Tribalism is about true believers with a burning desire to connect with other true believers. Their efforts are not staged through corporate strategy (alone) and so they can become cohesive simply because their intrinsic interest in the cause is sufficiently strong to sustain their focus. In other words, the focus is not about vanity metrics such as likes and views. Rather, they are more interested in drawing their members closer (than growing numbers). Wired Magazine's Kevin Kelly suggested that tribes only need 1,000 true members, ie enough for a core group of passionate, deeply 'heretic' members to sustain them. In short, leaders focus on their tribe, ignoring everyone else. This lesson corresponds with the tactical pillars 'Transparency' (Authenticity), 'Values' and 'Beliefs'. The rules for these pillars will suggest unapologetic specificity in content, brand voice and tone, etc. Some might even encourage exclusivity.

• White supremacist (WS) groups are unapologetic about their zero tolerance policies regarding membership.

As far as possible, managing a corporate tribe should involve having only the right partners, suppliers, employees and so on. 

Lesson 6: Tribes become movements (with the help of leadership)

After membership has reached critical mass, the tribe becomes a movement, ie it can bring about change in the world. Do not take this power lightly. Social media movements have swayed elections. The movement comes into being when the leader does the following.

1. Tell a story (to people who really want to hear). The story highlights the vision for a better future (whatever that means to the tribe).
2. Connect the tribe members to each other and themselves
3. They lead the movement with direction and purpose.
4. They make change occur in ways that no single member could have done alone.

Lesson 7: Leaders use a combination of the & leadership Cs

Leaders all accept their leadership roles and use a combination of the following elements. They

1. challenge the status quo.
2. build a culture
3. are curious  (about the world, how it works and how their vision can work)
4. are or become charismatic to attract and motivate followers
5. facilitate communication among members and themselves
6. commit to the cause
7. facilitate connection among members.

Video (above): Tribes by Seth Godin, Animated Book Summary by YouTuber MentalEFit Book Club.

Video (above): 'How the Dogtown Z-Boys changed skateboarding culture (tribal branding)' by YouTuber Intermark Group. 

The Dogtown Z-Boys was a small group of skateboarders in the early 1970s with an intrinsic interest in skateboarding long before the tribe formed. The earliest skaters were outcasts or 'heretics' by nature. The concept of skateboards was an adaptation of ocean surf boards that were adapted to the land. Their membership was exclusive on the basis of psychological characteristics and unique skating styles that evolved naturally into being from their interaction with each other. For instance, given their ocean surfing background, they did things that other land-only skaters did not, like bring their bodies close to the ground, touch the ground and so on (in other words, an aspect of their 'heresy'). They mastered this style inside of empty swimming pools at homes up for sale during a Californian drought. Craig Stecyk of a local newspaper  (Dogtown Chronicles) assumed the leadership role by publishing the group's symbols, images, core values and ideas. (Keep in mind that this occurred several decades before the internet). This leadership brought together like-minded, otherwise disconnected members and established their culture. They also wore uniforms to demonstrate to the world and themselves their cohesiveness. They even had a physical location where they met each other. Ultimately, the tribe transformed the initially basic trends of skateboarding into its current status as a mainstream extreme sport of skating up smooth vertical surfaces of modern day.

Apple has been able to create a loyal tribe that is willing to wait overnight outside of their doors for new releases, with hopes of paying much more than the competition for their products. In keeping with lesson 1 (regarding a shared interest for being outstanding in graphics and creating a space to encourage easy, direct communication), Apple engages heavily with its market over social media platforms. For instance, its Instagram posts have featured very striking images from customers using their latest iPhone model. Starting from their revolutionary 1984 introduction of home computers for personal use, they go out of their way to establish the idea that the brand is different, in an unapologetically superior way. Their tagline 'Think different' reflects this and is somewhat of a call to action for persons wanting to be seen as an outsider, non-conformist and revolutionary like the brand was in 1984.

TO DO

1. Research and identify your tribe as intimately as possible. To this end, create a target customer profile.

2. Be clear about your unique value proposition / UVP.  The UVP does not need to be only one value. It can be a collection of those values that are most meaningful to your target market.

3. Engage with your tribe, listening closely and responding accordingly.

4. Connect emotionally with your tribe. (This is a must).

5. Create strategic content pillars that incorporate the elements of tribalism. Here is a rough example that incorporates elements of brand tribalism for introducing a new brand whose state of being unknown must overcome sales objections of distrust based on the market not knowing and consequent distrust of the brand's expertise. Notice how the same tactical pillars are applied to each of multiple segment-specific thematic pillar (like plus-sized women's wear, regular-sized women's wear and so on within a single women's line). Those tactical pillars were inspired by the concepts of tribalism and Fastnet's 9 tactiical pillars. 

ToF lead generation  / Objective(s): to be known (through trust, seek qualify members)

• Thematic pillar 1 of .. segments
• Traction
• Value
• Results (Pull title)
• Authority (expertise)
• Social Proof (Pull title)
• Transparency
• Thematic pillar 2 of  .. segments
• same as above (s/a)
• Thematic pillar 3 of  .. segments
• same as above (s/a)

MoF lead nurturing  / Objective(s): to tribalize customer (like, trust)

• Thematic pillar 1 of .. segments
• Value  (Pull title)
• Transparency
• Results (Pull title)
• Heresy  (Pull title)
• Ask / Participate
• Solution
• Thematic pillar 2 of  .. segments
• same as above (s/a)
• Thematic pillar 3 of  .. segments
• same as above (s/a)

BoF lead conversion / Objective(s) to sell and retain customer with trust inspiring content)

• Thematic pillar 1 of .. segments
• Solution  (Pull title)
• Ask / Participate (Community communication)
• Thematic pillar 2 of  .. segments
• same as above (s/a)
• Thematic pillar 3 of  .. segments
• same as above (s/a)

CONTENT RELATED TO BRAND LOVE (TRIBAL BRANDING)

• Know, Like and Trust Series
• Tribalism is an extreme form of lifestyle branding.
• Brand voice and tone
• This article relates to B2C tribal branding / brand affinity. However, B2B brand affinity is also noteworthy. Third party research suggests that that clear top drivers are Trust and customer service. Read third party articles about this topic by Marketing Charts.
• When done correctly, tribalism is able to get customers to make buying decisions based on emotional bonds.
• Emotional branding and marketing.
• Branding: Core values
• Social media content management
• Persuasion technique
• Noteworthy case studies of corporate tribes not include in this post are Tesla, Nike

Brand Architecture

Brand architecture refers to the structure of the hierarchy and inter-relationships among various brands owned by your business. Advance planning your business' brand architecture is strategic in that it exploits the potential impacts of a parent brand's visibility, pre-existing brand awareness and reputation on other brands as you grow. This matter is ideal for businesses of any size, even ... or perhaps I should say, especially small businesses. Previously, I discussed the Ansoff matrix of growth strategies as they relate to different levels of risk (of failure). Brand architecture strategy can manage some of this risk. How you plan to group them into families and establish hierarchy is somewhat like family planning.  You can create support systems of brands that end up stronger than otherwise. This type of planning is even more critical today in a very noisy marketplace.

This post will discuss types of structure with 1) branded house and 2) house of brands structures existing on extremes of each other. Specifically, while the branded house structure presents support and safety, the house of brands presents complete freedom and independence. In-between these two extremes are 3) endorsed brands that have the best of both worlds to varying degrees and 4) hybrid brands.

1) Branded house  (brand support & safety net)

A branded house aka an umbrella of brands refers to a set of subordinate brands that are exposed to the public as being clearly derived from a visible master brand. The subordinate brands are derivatives of the master brand. Sub-brands may retain some aspect of the master's brand personality in that they often look and feel similar. Sometimes, the name of the master is integrated into the names of its sub-brands. However, they vary slightly to accommodate their own specific individual personality. I think of them like a close-knit family household with a shared culture but still every family member does his or her own thing. They all live under one roof with a placard hanging from it with their name. Each time a new member brand is 'born', the pre-existing brands give the new brand an unfair advantage into the market through familial association. The benefits include the following.

+ Each sub-brand can appeal better to its unique segment. It can therefore exist as a standalone brand. 

+ Each new sub-brand benefits from the brand awareness and strong reputation of the master brand. It does not need to start from scratch in building trust. This minimizes the greater risk asspcoated with risky growth strategies like diversification. As previously discussed with the Ansoff matrix, there is an elevated risk of failure with growth strategies. The benefit of this was evident in the new product development case of FedEx Office, whose offering is unlike all the other sub-brands. 

+ Consumers can easily make the connection among the sub-brands and remain likely to buy and use entire families. Examples include Google and Microsoft.

Master brand

• sub-brand 1
• sub-brand 2
• sub-brand 3

FedEx (master brand)

• FedEx Express
• FedEx Ground
• FedEx Freight
• FedEx Trade Networks
• FedEx Office

With only a small color variation, the affiliation with the FedEx parent brand is unmistable. 

Marriott (master brand)

• JW Marriott
• Courtyard
• Marriott Executive Apartments

Google (master brand)

• Google Docs
• Google Analytics
• Google Forms
• Google Adsense
• etc

Other examples

• Microsoft Office (Excel, Word, etc)
• Adobe Creative Suite (Photoshop, Illustrator, etc)

2) House of brands    (freedom & independence)

Unlike the branded house, a house of brands is like a  structure with different households of extended family members. Each household has its own entrance and living area but remain aware of each other. Specifically, the master brand is largely invisible from the public thereby allowing sub-brands to look and feel very different and unrelated to each other. In other words, the average consumer is unaware of the relationship between the various sub-brands. In many cases, consumers do not even know the name of the master brand,

> The business can use ostensibly unrelated brands  to reach far more different segments. Segmenting  the market with different brands avoids confusion in the minds of consumers, especially when some aspects of the unique value proposition (UVP) of one brand may be deemed unaligned with another. For instance, if a business' core value involves veganism or some other 'ism that is a deal breaker for its sensitive market regarding the related core values but it wants to compete in non-vegan markets, that business will be better off creating an apparently different non-vegan brand. As evident in the case of BMW and Mini Cooper, the segments are very distinct. These diametric segments allow the business to exploit other areas in the market. 

+ From a brand risk management perspective, this structure avoids the risk of a harmed reptutation if one brand encounters bad experiences in the market. This is ideal when some of your brands are in industries that carry greater risk levels of bad press, product liability, etc.

+ This structure allows brands to become more diversified. This is evident in cases like Unilever (below), whose sub-brands have even diversified in to entirely different industries.

+ To an extent far greater than branded house cases, unrelated brands can be even more individualized to target more precisely to segments or niches in ways that would have been impossible if they had remained connected with other brands. In other words, consumers can be clearer about each brand's offering. To extend this facility, BMW further created its numbered series which go even further in allowing consumers to figure which one is right for them and to have aspirations of upgrading, which many people do.

- Having multiple standalone brands requires a larger investment of time, human resources and finance (than the alternative option of piggy backing off of master and or sister brands).

UniLever (master brand)

• Dove
• Lynx
• Ben & Jerry's
• Flora
• Lipton

P&G (master brand)

• Duracell
• Pringles
• Gillette
• Febreze
• Ariel
• Pampers

BMW (master brand)

• BMW
• sub-brands
• Mini Cooper
• sub-brands

3) Endorsed brands    (in-between)

This 'endorsed' brands exist somewhere in between the 2 extremes, enjoying the best of both worlds. It is like the grown child who lives in an apartment in her parents' house. Sub-brands like this enjoy independence but still have the safety net of the parent brand. 

There is no one fixed extent to which endorsements occur. Some master brands are more visible than others. In such cases, the master brandname is used as a prefix for the new brand. On the other extreme within this gray area, the master brand's visibility is limited to a mention in barely legible print on the back panel of a sub-brand's product label.

Some of the cases listed above should arguably be placed in this section.

Apple (master brand)

• iPad
• iPhone
• iMac
• Aoole Watch
• Apple TV

4) Hybrid brand structure    (combination)

A hybrid structure combines the 2 extremes much like a household with some grown independent children in their own apartments and otherse still living in their parents' household.  

CONTENT RELATED TO BRAND ARCHITECTURE

• Ansoff Matrix, a tool of strategic growth that can result in the creation of different brands with different levels of risk.
• branding 101'
• Brand personality
• Brand Positioning, Strategy
• Brand style guidelines
• core values.
• mascot
• brand voice (tagline, campaign slogans)
• brand strategies (lifestyle branding)
• products (product mix)
• brand story
• Abovementioned case studies in other content

• Apple
• FedEx
• Google
• Marriott
• Mimi Cooper
• P&G
• Unilever

Ansoff Matrix

Previously, I discussed risk management and industry competitive analysis. I will now extend those earlier discussions in this article by focusing on the ways in which a business can consider its options for its growth. Specifically, 'growth' relates to securing more sales revenue and or volume. Since businesses exist within a competitive landscape, this growth must usually occur after capturing market share from competition while managing the associated competitive risks.

Uses for the Ansoff Matrix

• Ansoff's Matrix is a marketing & corporate strategy tool. It can be used to formulate your business plan's growth-oriented mission statement. Businesses with strong growth ambitions often consult these strategies. 
• Third parties reviewing a business plan, especially investors who will suffer loss if your business' ventures fail like venture capitalists are particularly interested in your choice of strategy for enhancing revenue. Growth strategies therefore provide a very strong indication of the level of risk associated with your business' vision. 
• Defining your business strategies according to the Ansoff Matrix provides a systematic way of  integrating risk management into the marketing strategic plan. Specifically, it allows marketers to easily identify risks, rank those risks and then plan tailored responses for each risk, according to its intensity.

Types of Growth Strategy, Defining 'Product' and 'Market' & Gradations

The 4 strategies in ascending order of risk are as follows. It is worth noting that any of these strategies may be used in conjunction with another. 

1. Market Penetration
2. New Product Development (NPD)
3. New Market Development
4. Diversification

Each of these 4 strategies is graphically represented by a quadrant in the Ansoff matrix. The axes of the matrix represent strategies involving the 1) product and 2) market. Each axis is divided into either 1) current or 2) new. In other words, a strategy can involve either a pre-existing product or a new one. Similarly, the strategy can involve either a pre-existing market or a new one. Each strategy can therefore be plotted within the matrix to simultaneously consider the nature of the product and market in these ways.

As strategies involve newer products and or markets, the risk of loss and faillure increases. In other words, the level of risk increases as a business moves further away from what it already knows and into something new whether new markets and or new products. Since market research and product research & development (R&D) required to engage in something new do not guarantee success (ie sales), there is always a likelihood that your financial investment into these activities can be lost. In fact, non financial losses are also looming probabilities. As discussed below, the least risky strategy is market penetration while the most risky one is diversification

Given the potential for different definitions for 'product' and 'market', managers should communicate the interpretation that should apply to their organization. For instance, in my practice, a 'product' is any unique item for sale. It usually has its unique barcode (a digital fingerprint that hopefully conveys my message of its individuality and uniqueness). In other words, if I sold polo shirts, color variations or other items within a product line can not be collectively called a product. Instead, I select the standard or original version as a single 'product'. As will become apparent below, the decision to introduce newness like variations in color, size and so on requires some specific consideration regarding associated risks.

For my purposes, a 'market' usually consists of members who qualify for the product and can probably be served through sales channels available to their market. If the shirts are sold in City A stores and City B stores but shoppers from either city do not access the other city, I can say that I have 2 markets that are defined in terms of geographic location. I may name them the City A market and City B market. In reality however, markets may also be separated psychographically, socioeconomically and otherwise. The key point is that a 'market' is specifically defined and separate from others. For instance, Stores A and B may be feet away from each other on the same street but belong to different markets. If the stores have extremely different prices; one very high to be exclusive and the other very low to cater to budget conscious shoppers, members of one socioeconomic market are unlikely to ever visit the store of which they are not members, even if the other store is nearer to their homes.

In some organizations, quadrants contain gradients that represent different levels of newness or deviation from the current product or market. Gradation reflects varying levels of risk within a single quadrant. For instance, imagine that you decide to sell your shirts to a new market, ie the middle socioeconomic market but within the same town. The level of risk will be different if you sell the same shirts in a different city whose commercial environment is entirely new to you. The risk increases even further if you sell in a different country. 

As you might have suspected, the same gradation can apply to products. For instance, if you offered polo shirts that were extra small and pink (ie rather than the standard navy blue), you run the risk that your market will not buy them. Has your market consisted of men whose machismo will prevent them from buying pink, even for their sons? Knowing the qwirks of your market, you will also need to decide whether offering a dress shirt of linen (ie rather than a polo shirt made of jersey material) is marginally or considerably more risky. Each of these new items may appear on a different gradient. These differences are clearer if you started to offer products that are: add-ons like belts and hats that complement the main product; upsells like fancier polo shirts or; products in completely different industries like daycare services which drastically deviate from clothing.

Needless to say, while considering the gradations of product newness, you must simultaneously do this for markets. For instance, considering the qwirks of your market, do you need to treat the pink shirts as 'new' products in a 'new' market because, up until this point, your store has only attracted men, but women and their daughters are the only likely buyers? If you are thinking about the daycare services which, in addition to being a different product, also caters to a different market, its riskiness transcends pink polo shirts for women despite the fact that daycare services exists within the same quadrant for both new product and new market.

This post will now explain each of the 4 strategies in turn. However, in the cases of new product and new market development, there is additional discussion about the associated risks.

1. Market Penetration - LOW Risk
This strategy involves a 

• current product  AND
• current market

Aim: To increase market share by increasing dollar value of revenue. Within your current market, you have the option of targeting either:

• customers from competitors (direct and indirect)      --OR--
• YOUR current users to consume more

This applies to cases in which you are already serving a particular market but wish to deepen your hold on that market, ie expand market share. See examples below this strategy. When using this strategy, you likely need either very little to no market research to achieve this successfully because there are no new markets to be researched, nor products to be developed and tested. The market is already like your familiar 'home base'. NB. This strategy is not ideal if you are in an already crowded market and your product is in its mature stage.

• Example(s): forms of this strategy.
• If a brand called Kopa-Cola already sold its drink in City X (ie a pre-existing product and market) but 
• now tries to increase sales by introducing a 6-pack, perhaps pricing it so that the last bottle is free. With this approach, the brand is targeting its own customers ... OR
• now offers the drink as part of a bundle that includes tickets to movie theatres that cater to the competition's drink. With this approach, the brand is targeting the competition's customers.
• Opening new channels and or making existing channels easier to use within the existing market with new physical retail outlets, new websites, new social media, live chat, etc
• Loyalty programs encourage your current customers to continue buying. Consequently, they meet the objective of this strategy, ie to increase sales. (As a side note, loyalty has the added benefit of raising switching costs as per Porter's Five Forces).
• Market-appropriate tentpole promotions like Mother's Day special, Christmas sales, etc. These promotions may include sales like buy 1, get 1 free or earn double rewards.
• Competitions that encourage the engagement of current customers using social media features like questions in Instagram Stories.
• Shout-outs with strategic alliances, ie other businesses with non-competing offerings but the same market. You may use tools like Instagram @tags. 

2. New Product Development (NPD) - MEDIUM Risk

This strategy involves a:

• new product - a source of cost and therefore risk
• current market

This strategy is the 2nd least risky. It evolves naturally from product penetration because it is easier to sell to existing customers that you already know well than to acquire new customers. It relies very heavily on pre-existing deep insight into customer needs and successful innovation. In short, costs that cause risk relate only to new product development (NOT market research).

Uses & benefits:

• to recapture your customers who are being lured away by the competition (essentially a counter attack)
• to exploit opportunities to sell a new product. 

Example(s):

• If the abovementioned Kopa-Cola brand (that already sells its drink in City X) now tries to offer a product variation to its pre-existing market. It might offer a 'light' variation, to prevent customers from having a wondering eye when they notice that the competition and social media is talking about lowering sugar consumption.
• In the personal care cleaning industry, large synthetic detergent (syndet) bar companies began to receive a lot of competition from cottage industry makers of all-natural soap. In response, syndet makers created 'green' ingredients to their syndet bars and took advantage of the facts that there is no regulation over the word 'natural' and the average consumer does not understand the science. However, to attempt to raise entry barriers to soap makers and secure their competitive advantage, they began to push the idea of pH-neutral products as being superior and safer for human skin. They did this knowing that soap by its nature can never achieve pH balance.
• New features on the current product
• Special editions, which are variations of the current product
• New product updates.
• Case study: Apple does this very well with new  innnovative operating systems, each with existing new names.
• Market extension using strategic alliances with other companies.
• Tentpole-specific variations
• Glocal variations

Risks asssociated with new product development include the following.

• Missed opportunities due to inflexible pursuit of and faith in the original plan. This can result in tunnel vision that does not adapt to changing market needs.
• Delays due to over-stretching (human and other) resources. Allow the R&D team and equipment to focus exclusively on their task. In other words, avoid the temptation to assign these resources over too many projects and normal-business tasks because they will be less equipped to handle the unpredictable nature of R&D. In short, the solution is to have a 'capacity buffer'. A capacity buffer includes not rushing into new projects before properly completing ongoing ones and dedicating teams and equipment to a single project.
• New products that become unpopular in the market due to being too complicated with an excessive amount of features. This is very applicable to products that are technical and whose method of use needs to be learnt (like software, equipment and information). I will also add that this applies to even consumer goods whose number of components should likely be kept at a minimum to help consumers better identify what they like and consider effective. Rather than make a toothpaste that is for removing tobacco stains but also ideal for sensitivity is confusing. You are better off creating segments. Besides, your production team will have less chance of total work stoppage due to running out of one among numerous components.
• Product failure due to zero-tolerance for design failures during development process. This can result in entering the market prematurely with sub-standard products that can hurt your brand. The solution is to not only be clear on objectives based on market needs but also willingness to alter the plan and re-design the product as needed during the process. Allowing the R&D process to endure failures prevent designers from only selecting the least-risky options. Enduring the failures in-house early saved the brand from public product failure.

3. New Market Development - MEDIUM RISK

• current product
• new market - a source of cost and therefore risk

A new market can be defined by any grouping such as geographic location, psychographic segment and income level segment. Re R&D, since you are targeting new leads with the same product, you only need to perform market research (and NO new product development). You already know your product has a potential to be liked. Since the elements of newness is limited to only or mainly one between product and market, this strategy is considered to carry medium risk. (However, you might still need to follow trends of the target market's evolving needs and desires). 

Case Studies:

• Some of your high end clothes can not be sold as normal in your usual outlet, possibly due to overproduction, returns, slight defects and so on, you find alternate 'off-price' retail outlets like TJ Maxx. TJ Maxx is a different market segment in that it is renowned for appealing to people who want high quality but at a discounted price. Consequently, your high end buyers are unlikely to shop there. If TJ Maxx is also unable to sell those products, they may pass those products on to thrift stores.
• Unlike numerous Western companies attempting FDI in China, Starbucks' foreign direct investment (FDI) entry into China was successful after some initial floundering. The success is possibly due to several reasons. For starters, its entry represented the first time a coffee culture was introduced to such an extent in China when the middle class was growing and demanding new experiences. Despite the Chinese culture that is traditionally geared towards tea, the experience was appealing to Chinese. To some extent, the aesthetics are considered glocalized with Chinese wall art, mugs and so on. Senior management admitted that their task was helped significantly by having Chinese 'friends'. My impression is that this success might involve luck because of timing. In contrast, Starbucks failed in Israel. This was due to not appropriately adapting to the  Israeli coffee culture. For instance, Israelis prefer to lounge around with ceramic cups. Carrying away Starbucks' paper cup made some Israelis feel rushed which was therefore unappealing. Since Starbucks charges a premium for the Starbucks experience, it would be understandably hard to justify paying more for an experience people did not value. The brand failed in Australia to the extent that it closed 2/3 of its locations in 2008 (only 8 years after starting its FDI there) and after sustaining over USD 100 million in losses. This occurred despite the fact that the Australia coffee market is among the largest in the world. Its failure appears to have occurred through an attempt to quickly reproduce the same US product, ie as opposed to slowly or organically becoming integrated into the new market. The Australia market is used to a more intimate experience in cafes and also has its own coffee preferences. Starbucks' menu did not adapt from more sugary drinks to what Australians would consider more sophisticated tastes. Furthermore, the high number of locations arguably made the brand appear too mass produced or commoditized and available for a premium brand. Ultimately, the premium price could therefore not be justified by consumers who found the experience below par. This case illustrates that success in one location does not naturally translate to other markets. To be clear, it is not simply a matter of american companies being incapable of globalizing. Afterall, another american company, Gloria Jean's Coffee was successful at glocalizing with over 400 outlets in Australia. Gloria Jean used Australian franchise to accomplish this success but with a menu that is adapted to the Australian taste.
• The failure experienced by Walmart in Germany is a case in point that shows the risk involved in failing to adjust an incompatible business model to the demands of local markets. Specifically, Walmart did not alter its American model before setting up stores in Germany. It was voted as the "worst supermarket" for several years and lost hundreds of millions of dollars. At the core of this problem is the fact that Walmart's value proposition is competitive price while the German market does not focus heavily on price. In general, Europeans do not even care to know the price of items while shopping.  

Example(s):

• Brand awareness promotions
• You want to target not just Gen X and Y as per your norm but now also Baby Boomers.
• You want to overcome a recession or low-income profile in your country and want to enter a different country's more affluent market. 

Risks associated with new market development may be divided into internal, external and legal. Identify risks by considering the following related factors. In all instances, seeking advice and working closely with locals (like staff, lawyers and other stakeholders) help to manage these risks. These relationships must also be maintained since the rules change. Needless to say, research your market as heavily as possible and without making assumptions.

• Internal (ie within your business)
• Cultural differences: segmentation based on demographics &/ psychographics; language; social perceptions regarding matters like race and gender; systems of measurement.
• Goals that are unclear, inadequately communicated or integrated into the functional processes throughout the organization.
• Lack of coordination, especially among virtual team members.
• Cash flow. Given the unpredicatable nature of how things can go wrong, businesses need extra emergency sources of cash.
• External
• Conversions across (volatile) foreign exchange rates, foreign business practices.
• Logistics, especially in developing countries.
• Technological networks in the location. 
• Social unrest and trends. Businesses should learn the significance of the social climate, the reasons for protests, riots, labor strikes, revolutions, wars, sudden changes in governments and so on. This is key for planning accordingly, showing appropriate solidarity and avoiding the perception of insensitivity.
• Physical environmental factors. These involve  issues as insidious as the mold that develops in highly humid climates to the raging nature of hurricanes, earthquakes, floods and so on.
• Legal
• Compliance with the regulations and laws of the new market. Consider for instance that, selling marijuana was legal in some US states but carried a severe penalty in others.

4. Diversification - HIGH Risk

This corporate strategy involves:

• new product - a source of cost and therefore risk  AND
• new market - a source of cost and therefore risk

Diversification is the single most risky strategy because it involves entering into new markets with new products. Sometimes, this strategy is used as a last resort for survival when a company's product life cycle is in decline in its market or when there is no other foreseeable means for growth (because all other strategies have been exhausted). However, it can also be used by healthy companies that simply want to grow to please its shareholders, like Amazon. I also consider new business ventures as starting in this way. Regardless of the circumstances that lead to diversification, businesses should consider cultural differences when moving internationally. If you lack sufficiently deep knowledge of your product, tread cautiously. You might be better off with another growth strategy. Also consider minimizing the high risk with strategies like franchising.

Case studies

• Amazon has used diversification simply to grow to please its shareholders. Regarding new markets, it uses strategic alliances in this globalization process. Regarding new products, it leveraged its well known name to diversify into drastically different fields in some instances like the Amazon Web Services (AWS). Unlike the original retail Amazon, this business provides server, storage, networking, remote computing, email and mobile development and security services. In fact, this product has even become Amazon's leading revenue generator. Ultimately, this case is the classic example of the enormous rewards that can come with enormous risk.
• When a car brand needed a plastic manufacturer to make some of its parts (fairing panels), Swatch, a business that specialized in making plastic watches took the risk of making this new product (fairings) for a new market (the automobile market), both elements (product and market) with which Swatch had no experience. 
• Alphabet is a case of a highly successfully diversified business. 

Example(s):

• Mergers & acquisition can give you access to your competitors' customers. 

Sustainability of Growth Strategies

Beware however that these strategies are not always sustainable. For instance, strategies reliant on giving more for less, product variations, new sales channels, new market segments, etc can often be easily imitated by the competition and or deliver diminishing returns over time. Consequently, they are best considered as relatively short-term growth strategies for quick results. As to be expected, the most risky growth strategy, diversification has the greatest potential for more sustainable growth.

CONTENT RELATED TO THE ANSOFF MATRIX

• New Product Development 101
• Business Plan
• Risk Management 101 
• Franchising can be a means of reducing the high (financial) risks associated with new market development.
• Consignment agreements can reduce risks associated with new market development.
• Corporate strategy
1. PESTLE 
• Create SWOT (using PESTLE tool)
2. Porter's 5 Forces
• Create SWOT analysis (using Porter's 5 Forces)
• Gap analysis
3. Ansoff Matrix 
4. Boston Matrix
• Operations management 101 for productivity
• Abovementioned case studies in other content
• Amazon
• Apple
• Gloria Jean's Coffee
• Instagram
• Personal care (cleaning) industry
• Starbucks
• Swatch
• TJ Maxx
• WalMart