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Market Branding Strategy

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Many large companies have brought different brands and products to market over the years. These products are often aimed at the same target group, but sometimes the company wants to reach a completely new target group. There are different brand strategies for this. How are these strategies established and what are the advantages and disadvantages of each strategy?

What brand strategies are there?

- Umbrella brand " House of brand "
- Single-brand houses " Branded house or mono-branding "
- Sub branding
- Endorsed branding
- Hybrid

What is an umbrella brand?

An umbrella brand or a family brand is a brand that releases several products under the same product name. These products can be present in the same or totally different product categories.

Advantages of umbrella brand:

An umbrella brand strategy is the most cost-efficient strategy, because investing in one brand is much cheaper than marketing several brands. If Calve wants to bring a new type of butter to the market under the same brand name, Calve doesn't have to invest time and money in a new brand.

A family brand also facilitates the introduction of a new product, because this product benefits from the reputation of the parent brand. Furthermore, the new product also benefits from the promotion of the brand above. All advertising campaigns, sports sponsorship and other marketing activities will have an effect on all products that have the same brand name.

Disadvantages umbrella brand:

A disadvantage of an umbrella brand strategy is that a harmful message about one product immediately has a negative effect on the other products with the same brand name. For example, if it appears that a piece of glass has been found in a jar of Calve peanut butter, it'll also have an effect on the mayonnaise that Calve sells.

Another disadvantage of an umbrella brand is that an umbrella brand isn't flexible. If Calve decides, for example, to launch shoes on the market under the Calve name, that won't be credible. Consumers know Calve from their food and won't understand the link with clothing.

Example of an umbrella brand:

An example of an umbrella brand is, for example, Calve. Calve sells peanut butter and snack sauces under the same name. If consumers have positive experiences with Calve's peanut butter, they will be more inclined to also buy Calve snack sauces. Other examples of brands that apply this brand strategy are: Phillips, LG, Samsung.

What is an individual " or house of brand " brand strategy?

With an individual brand name strategy, each product category of a company gets its own brand name. This is usually reserved for larger companies that can invest money to market multiple brands.

Advantage of individual brand strategy

The advantage of this is that it enables the company to position brands well specifically for the target group. For example, men are less likely to buy tough Gillette razor blades if they knew the same company was selling Airwick air fresheners.

Disadvantage of an individual brand strategy

The disadvantage of individual brands is the costs. Designing, designing and promoting a brand takes a lot of time and money. This strategy is therefore usually reserved for companies that have more money to invest.

Another disadvantage is that the individual brands can't benefit from each other's brand recognition. The sauces of Calve benefit from the name recognition of Calve peanut butter. Brands that are separate from each other don't have this.

Examples of individual brands:

Good examples of individual brands are Procter & Gamble, Johnson & Johnson and Unilever. Procter & Gamble sells shampoo under the name Head & Shoulders, razor blades like Gillette, air fresheners under the name Febreze, toothpaste like Oral-B and chips under the name Pringles.

In addition to the popular umbrella brands and one-house brands, there are variants that make use of the individual strength of a brand, but still maintain a strong link with the main brand. One variant of this is sub-branding.

What is sub-branding?

With sub-branding there is a main brand that then creates an underlying second brand, which are called sub-brands. Sub-brands are often created to appeal to a new target group. Although the main brand is often strong, it can't appeal to every target group at the same time. Sub-brands offer a solution by adding values ​​to the brand that fit better with the target group without losing the link with the main brand. Sub-brands often have their own logo, house style, brand values, etc., but it's also possible to have the same identity as the main brand.

Benefits of sub-branding

Successful sub-branding can ensure that the main brand acquires more value within the target group. Thanks to the good 'fit' with the target group, sub-branding can ensure brand loyalty and trust that would not be possible if the main brand " which appeals to another target group better " entered the market.

It also works the other way around. The main brand is often already a trusted brand, that trust has a positive effect on the sub-brand. An example of this is Apple. Every time Apple launches a new product under the name Apple Watch, Apple Music, Apple iPhone, etc., it uses the umbrella Apple brand. Consumers trust Apple as a brand and therefore often also trust the underlying sub-brands.

Cons sub-branding

The disadvantages of sub-branding correspond to the disadvantages of an individual brand strategy. As with that strategy, it costs money to launch, promote and maintain a new brand.

In addition, it can happen that a sub-brand is unsuccessful. This can negatively influence confidence in the main brand. In addition, setting up a sub-brand can be accompanied by confusion. What is the main brand and what's the sub-brand?

Examples of sub-branding

As indicated earlier, Apple is an example of sub-branding, the sub-brands are little different from the main brand. A better example is Virgin. Virgin started out as a record label, but now has sub-brands in the radio, aviation and health industry, among others.

What is endorsed branding?

Just as with sub-branding, endorsed branding uses multiple brands that are under the main brand. Every brand that hangs under the main brand clearly has its own brand name and identity. The link with the main brand is often very subtle and is often indicated by the words 'by'. Unlike sub-branding, the main brand and the underlying brand aren't the same. A major difference between sub-branding and endorsed branding is that with endorsed branding the main brand plays a less important role than the 'second' brand.

Benefits of endorsed branding

The benefits are almost the same as with sub-branding. The biggest difference is that the link with the main brand is less important. As a result, the underlying brand benefits from the name of the main brand, but this will be less strong. Other advantages are that the brand is able to appeal to a different target group than the main brand.

Disadvantages of endorsed branding

A disadvantage of endorsed branding is that it costs money to set up a new brand. Because the link with the main brand isn't strong, you can't make much use of synergy.

Examples of endorsed branding

The best example of endorsed branding are the Post-It's from M3. Many people know the Post-it sticky notes, but few know that it's part of the well-known brand 3M. Another example is 'Polo by Ralph Lauren'. In addition, Nestle " known for its chocolate " makes partial use of endorsed branding with its KitKat and Smarties brands.

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