Branding is all about creating unique identities and positions for your products and services, hence distinguishing one’s offering from competitors. Branding helps marketers to uniquely proposition their products and it is the first touch-point for buyers who are then drawn into long term relationship.
Rising cost of brand building, owing to media fragmentation, is an important factor working in favour of umbrella branding. Lifecycles of products are shrinking, so there is no sense in investing heavily when one power brand can straddle all the offering with one basic core value.
Also in today’s media environment creating brands is becoming more and more difficult this is due to rising media cost, communication clutter and fragmented target audience over various forms of media.
It’s easier to launch a new product, and find better acceptance from trade and consumers is easier in case of umbrella branding. Since umbrella brand is a trusted name it automatically quality perceptions ascribed to it, hence trial is easier when you enter new categories.
Brand Portfolio – Model A
It is based on three fundamental premises on which branding decisions are based – business strategy, consumer behavior and cost associated with brand building.
The business strategy and the company philosophy will determine the type of brand architecture one wants to pursue. It is dependent on the market the company wants to operate in and whether the various businesses are related to each other or not.
This is dependent on the consumer involvement in the category and the frequency of purchase. The higher the frequency and more the involvement building an individual brand would make a lot of sense.
Cost of Brand Building
Brand awareness is like an ‘S’ curve and a consumer has to repeatedly exposed to a brand before it begins to stick in his mind. Given the rising media costs, advertising clutter and fragmentation of audience across various media it may make a lot of sense in building a company brand.
Corporate Brand Model
In this approach, companies predominately use a single corporate brand and message. Amul, Reliance, General Electric and McDonald’s are amongst some of them.
Here, companies let individual subsidiaries or divisions use their respective brand names. The corporate name is muted or is targeted towards secondary consistencies such as financial community.
Often companies want to capitalize on the goodwill inherent in their divisional brands yet still send a broader corporate message such as financial strength or strong management. They hybrid model typically implements this dual message approach through combined names such as the ‘Sonata, from the house of Titan’
This model describes companies that want to move from the divisional model to the corporate model or vice versa but fear losing or confusing customers if the transition is to abrupt.
Companies following a corporate model sometimes create new products or divisions that they purposely want to deviate from the corporate brand position. The new brand may carry a low-price ‘fighting brand’ message, or may focus on a new customer segment or technology.