These days almost every Luxury brand has diversified its core business into one or several different areas.
To get the positive effect from this action and to avoid diluting the brand or confusing the customer, the company has to analyze and consider carefully the new area. It has to correspond to the brand DNA and its values. However, there are a lot of good examples how Luxury fashion brands have diversified in cosmetics, jewelry area or jewelry houses into leather goods area, which seems to be quite different fields. Or the success story of Armani, which is the king of diversification.
Apparently the role of brand recognition is the crucial element regarding the product diversity. When the brand has gained the customers’ awareness and brand recognition it is easy to expand in terms of product, because the client who is loyal to the brand will follow it in every area.