How do I diversify my product or service line without diluting my brand?
The first thing you need to look at is why do you want to diversify and second does your avatar want the new products?
Then with this in mind having a chat to a business strategist is the next step.
I have 4 different products and services that reach different markets and have been very successful in doing this and it is totally doable provided you are willing to do what is needed to get them over the humps along the way.
In extension to the statements above, it is very important that the business owner/strategist has a process to measure the success or failure that is accomplished.
A gut feeling is simply not good enough.
Most accounting software has basic methods to assist.
Quickbooks has a Class / Location
Xero has tracking categories
Myob has locations/jobs
Using a client's example:
A beautician has three clinics with 20 packages of services and skincare products
Using Quickbooks as an example she creates three store locations
Then the 20 packages are tracked using "class"
She also mapped all her product sales against the appropriate clinic locations.
After three months the beauty salon owner discovered some surprising insights:
Ipswich sold mostly massage/waxing packages and in skincare, acne packages were the most popular
Moorooka did not break even in services or products, it was hemorrhaging losses.
Chermside clients loved the higher end packages and skincare products.
With this information, the beautician closed the Moorooka clinic, as the lease was due to be renewed.
A new product line of aromatherapy essential oils and massage goods were introduced to Ipswich.
The money she saved in rent by closing Moorooka went into more modern laser machinery and expanded the store in Chermside.
Knowledge is power.
Research, customer feedback, advertising/marketing, website SEO, blogging all work together well as long as you have processes in place to document their success or failure.
I think @Phil Sealy definitely made some great points.
Many who know me, know I enjoy using examples. One of the best products that comes to mind for this question is digital cameras.
Product 1 - a digital camera priced for the average consumer (low cost, low profit, volume)
Product 2 - a digital camera for hobbyists with more features (mid cost, bigger profit, sell less)
Product 3 - a digital camera for pros more features better materials (high cost, big profit, sell fewer)
Product 4 - a tiny camera for athletes / drone photography (mid cost, big profit, sell fewer)
These cameras all have a purpose but different distinct customer bases. Some customers may fit into more than one category (potential for possible upsell or secondary purchase).
Another great lens (pardon the pun) would be related products, potentially a portable printer, interchangeable lenses, custom filters, lighting, mounts (selfie sticks, tripods, etc.).
The main takeaway is finding perspective and leveraging the gaps between the customer segments and the overlap as well.