Companies have four basic options for an overall brand strategy: multi-product branding, sub-branding, multi-branding, and private branding. Each has its merits, so let’s review them.
Multi-product branding employs a branding strategy that allows for one name for all products; this may also be called family branding or corporate branding. IBM generally employs this approach because of the significant brand equity that the IBM name offers and the lower advertising and promotion costs that come with that built-in awareness. A disadvantage to this approach could include customer confusion about what products are actually provided by the corporate entity. In IBM’s case, they seem to make everything in the computer business; in reality, IBM has exited from a number of consumer product businesses such PCs and consumer printers. Yet, I still think of IBM as a consumer product maker. Also, another negative is the possible dilution of the brand if products don’t meet customer expectations.
A similar strategy is called sub-branding which utilizes the parent or corporate brand name with a unique product name. This is common in the automobile industry. For example, Ford Motors make the Mustang while Chevrolet offers the Corvette. Both products have been prestige product brands for both auto firms and have helped create brand equity for the parents. A downside to this approach might be the injury that an inferior product could have on the corporate brand. Ford is still trying to forget the Pinto and their exploding gas tanks.
Multi-branding is the domain of the giant consumer product firms with Procter and Gamble as the most famous example; in this case the product brands are uniquely marketed and have an identity all to their own. For example, most P&G products are seldom directly associated with the corporate brand. Scope, Crest, and Tide are P&G brands, but the average consumer does not know it. This obviously creates higher costs for advertising and promotion. Yet, if a product bombs, the P&G brand chugs along unharmed.
Private branding is a strategy for the manufacturer that has limited or no distribution channels. In this case, a firm makes the product, but sells it to another firm which gives it their own brand name. Many large retailers do this such as Sears and Wal-Mart; this allows the reseller to create a unique brand while receiving the branding rewards. The original manufacturer does what it does best: make the product.
John Bradley Jackson
© Copyright 2006 All rights reserved.
Please visit my website at www.firstbestordifferent.com