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The Secret Of Multi-Branding

Multi-branding is by far the most popular brand strategy, and is used by many companies
in all types of business.

In spite of this, the volume of scientific research and papers on the phenomenon of multi-
branding is very small. The reason could be simply that companies are unwilling to have
other people look into their strategy. It seems clear, however, that many companies are
involved in adjusting/balancing their multi-brand portfolios, so that this kind of learning
could be valuable.

It is generally recognised that multi branding offers a fine opportunity to grow a business,
simply because one brand cannot really cover all customer needs in all the various
segments of a market. Multi-branding can, in fact, be considered as one of the most
effective brand strategies, but it requires professional skills and ongoing management and
marketing focus from companies.

The brand as the ultimate business driver

Branding strategies are always highly important for companies, as brands are regarded as
the ultimate business driver. Brands today are acknowledged as the driver for better,
more sustainable results and as an internal as well as external source of inspiration, which
creates both high recognition and relationships.

Companies also recognise more and more that brands can increase profits.

As many companies over the past years have reviewed their core strategies, they have
often discovered that a defined type of service or defined product group is driving their
results. However, many mature markets today are strongly segmented, because of widely
differing customer needs and, in addition, many customers today are no longer loyal to
one single brand.

So, multi-branding is the most frequently used brand strategy within many companies
and categories. Looking at the various multi-brand portfolios, brands are often positioned
with specific roles such as prestige brand, flanker brand or fighter brand. Since many
markets are strongly fragmented, it makes sense to introduce extra brands in order to
compete effectively across a category. Other strategic reasons for multi-branding are the
coverage of various distribution channels, when the price range within a category
becomes too wide, or simply in order to spread risks for the bastion brand.

When to activate a multi-branding strategy?

The basic choice between a mono-brand and a multi-branding strategy depends, of


course, on quite a range of both external and internal factors. An elementary factor is the
type of market the company is active in or planning to enter. Also important is the type of
company: is it local or international, and centrally directed and controlled, or not?

Similarly the status of the brand portfolio is very important. Are the existing brands
already mature; do they lack growth, or even suffer from decline? And does the brand
architecture make it possible to expand from existing brands and differentiate further?

Most markets provide scope for multi branding operations but, of course, mono brands or
global brands are vividly alive as well; all are active and successful in penetrating
different markets and segments. One important factor influencing brand strategy towards
multi-branding is the current economic situation in Europe. As economic growth in most
countries is negative or stable, we see in very many consumer markets a development or
evolution into value or discount segments.

Many of the existing brands really cannot allow themselves, because of their (price)
positioning, to enter these segments, and so we see more new brands from existing
market players entering these segments.

Analysing many brand portfolios, I have concluded that the most important reasons for
multi-branding are:

1. a mono brand cannot cover all segments


2. markets are strongly fragmented
3. development of more defined brand offers to more differentiated consumer needs
4. increase in variety of distribution channels
5. price ranges within categories are often too wide
6. spread company and brand portfolio risks.

Is multi-branding always lucrative?

Multi-branding is not a simple game of creating more brands within the same company
the following points must be considered.

• A clearly identified strategy needs to be in place and approved by management.


• Market segmentation must allow each brand's positioning to be strongly
differentiated and, when entering new segments, it must be established that these
segments are of sufficient economic interest.
• The brand-owner organisation needs to be structured and aligned to this strategy,
and management must be prepared to invest in all the (multi)brands.
• There needs to be a firm commitment to compete fully with all (company) brands.

Is creating a multi-brand portfolio without risk?

Of course not. First, there is always the potential risk of overlap in the brand portfolio,
resulting in cannibalization. One can, further, debate the trend towards global branding
and argue that in many markets a brand shake-out is on the way. It may even be the case
that distributors only allow one brand per manufacturer to enter their business portfolio.
In practice one of the major risks is that the company and its management keeps too
strong a focus on the core brand or parent brand, and then withholds elementary support
from the other brands in the portfolio.

Not ignoring the possible risks, the pros and possibilities for a defined multibranding
strategy look very attractive. It is a proven strategy for many companies to grow their
business by opening up new segments and thereby gaining a lead over competition. Many
markets today (and probably more in future) are multi-channel, and a defined multi-
branding strategy allows you to create a clearly differentiated offer to these markets
which of course can be enlarged by further segmentation and product specialisation or
innovation.

There is a further range of advantages that a multi-branding strategy can offer:

• enhanced opportunities for customer relationship management (CRM), enabling


manufacturers to fulfill (individual) consumer needs more precisely.
• the opportunity to position brands more clearly and build strongly identified brand
values at the same time.
• the ability to handle strategy in price segmented markets.
• given a brand problem requiring serious product recalls, this does not have too
much direct impact on the other brands in the portfolio.

In the fmcg (food) business, multibranding is often used to position other brands on
different price levels as a response to other competing brands and private labels [1]. In
terms of distribution strategy too, multi-branding allows you to offer brands to
distributors who require exclusive brands for private label.

Multi-branding is everywhere

Almost all sectors and most leading manufacturers have active multi-branding strategies
in place.

In the banking and insurance field multi-branding is the mainstream strategy that is used
by most companies; while fmcg market leaders such as Unilever, Nestl, Masterfoods,
Interbrew, L'Oral, P&G, Henkel and so on all use active multi-branding strategies for
their very differentiated markets such as ice cream, body care, haircare, beer, snack food,
and sauces.

Similarly, in other big markets, such as drinks, airlines and tobacco, most manufacturers
use active multi-branding strategies in order to establish strong positions in differentiated
segments. Even retailers run active multi-branding strategies such as in the consumer
DIY markets and, for example, Groupe Casino with highly differentiated brands such as
Gant, FranPrix, Leader Price, Champion and Monoprix. In the same way, chemical
companies such as Akzo Nobel, Bayer and DuPont have active multi-brand strategies.
Most importantly, perhaps, the majority of car manufacturers use this strategy, but it is a
business area that could actually see more concerns adopting it. On the one hand, we see
quite clearly differentiated multi-branded portfolios, as with the Toyota group and BMW
cars and motorcycles, but, by contrast, the extended brand portfolio of General Motors in
the US has a considerable overlap in brand offers and brand values. Also, the price
differentiation is not always fully clear for consumers.

In the same way, one can argue that the VW group has some internal struggles with its
multi-branding portfolio. Brands like Skoda and Seat have become higher quality brands
by adjusting their quality, innovation and design and their pricing programmes, and
therefore have also become a competitor for the core Volkswagen brand, which for many
years suffered from limited innovation. On the other hand, the recent upscaling of
Volkswagen with advanced models such as the Touareg and the Phaeton may help the
Volkswagen brand to be more dynamic and challenging, but at the same time it could
become an internal competitor for the Audi brand certainly its claim 'Vorsprung durch
Technik', is now, so it seems, partially claimed by Volkswagen.

Successful multi-branding

A multi-branding strategy requires increased man-hours and budget, plus R&D support
for each separate brand. Whether multi-branding also requires separate marketing and
sales organisations depends very much on the structure of the company and on market
complexity in terms of channel structure. The seven most essential guidelines for
successful multi-branding are listed below.

Essential guidelines for successful multi-branding

1. A clearly identified strategy needs to be in place.


2. Segmentation and positioning need to be strongly differentiated.
3. New segments need to be of economic interest.
4. The organisation must be structured and aligned to the strategy.
5. There must be commitment to compete fully with all brands.
6. Management must be prepared to invest in all brands.
7. The organisation needs to have and hold focus on all brands.

It is essential that when a pro-active multi-branding strategy is adopted, management


ensures that the business is structured so that all the brands involved are managed and
fully supported, even creating a sort of internal competition between the brands but the
ultimate focus must be on the battleground in the marketplace itself.

Strive for excellence

The brand battlefield requires many skills, and ongoing focus and support from
management and marketers. Real excellence is found in companies (and their brands) that
are great on differentiated aspects of consumer and customer engagement and their
commitment to winning.
Many people believe that winning companies are great on all aspects, but in practice one
can become or remain a successful market leader by clearly dominating one or two very
relevant aspects, never mind whether this is established in the product, price, service,
access or experience.

Given this global reality, multi-branding could very well be one of the most relevant
building blocks for competitive marketing, because it allows companies to create a more
optimally differentiated brand portfolio which can and will fulfil consumer and customer
needs more closely. In addition, if a dominant market share is achieved, a multi-brand
strategy is a serious option to increase sales and profits.

June 07, 2010


Brand Design: A Penis For London's Olympic Games?

They’ve done it again! Three years after the 2012 logo united England in disappointment,
Locog – the organisers of the London Olympics – delivered another body blow for
British design.

Wenlock, the mascot for the Olympic Games, was unveiled alongside Mandeville, the
Para-Olympic mascot. With the usual Locog flair for impending disaster, the superficial
elements were all stage-managed perfectly: a London schoolyard filled with happy,
multicultural children playing harmoniously together against the backdrop of a graffiti
rainbow. Suddenly, horrifically, they were joined by a man dressed as a large, white
phallus who proceeded to frolic with the children in a quite alarming manner.

It was an indelible image. As a voiceover explained that the figure with the helmet-like
head, single eye and dual appendages around his base was Wenlock, I was struck with a
single, horrifying realisation: yes, but he looks like a penis.

How Important Is Brand Consistency?

Regular readers of Branding Strategy Insider know we welcome and answer marketing
questions of all types. Today, Barbara, a marketer from Washington, D.C. writes…

“I am looking for articles that address the question of how consistent must a brand be in
order to still be effective. Are you aware of any research that shows that a slight
departure from a brand, e.g., a slight departure from a dress code of a retailer, would or
would not have a significant effect on a brand?”

Thanks for your question Barbara. Consistency truly is the name of the game in brand
identity. The more consistent the brand is across all customer touch points and over time,
the more the brand will have made a firm impression on people and will be easily
recognized by people. I know this from years of experience with brands that have done
this well and brands that have done this not as well.
June 01, 2010
Too Many Brands Make Hollow Claims

Increasingly, I have encountered brands that make the following types of claims:

• We are the quality leader in the X category,


• We are the innovation leader in the Y category,
• We are the service leader in the Z category, or worst of all,
• We are the leader in the XYZ category.

Is quality important? Yes. Is Innovation important? Absolutely.

Is service important? Of course. Is it desirable to be the industry leader? Sure. However,


in more and more categories, as I perform brand audits, I find that large numbers of
companies in many categories make these claims, so much so that the claims have
become hollow. “Leader” means top, #1, not one of many striving to be top, #1. Don’t
claim an aspiration unless you can uniquely deliver on that aspiratioMay 24, 2010
Don't Blame Brand Licensing

Here on Branding Strategy Insider, Jack Trout makes a compelling argument for why not
to consider licensing as a method of brand extension. Furthermore, he backs it up with
multiple examples of established brands with flawed licensing programs that serve to
prove his hypothesis. After reading about Pratt & Whitney and Pierre Cardin, what CEO
in their right mind would choose to risk the company's crown jewels to a group of third
party manufacturers which don’t have a clue about how to build a brand, let alone
manage one? With so much at stake, only those CEOs that are either reckless or
desperate would consider licensing. Right?

Maybe the problem isn’t licensing, but its poor or improper execution? After all, why
would a company choose to forgo its consumer driven innovation process or marketing
principles only when it comes to extending their brands through licensing? Some of the
best and biggest brands around the globe have been actively and successfully licensing.
Disney, P&G, Coke and Harley Davidson each have outstanding licensing programs.
These programs not only enjoy strong royalty income, they enhance their brands'
attributes in the process.
May 21, 2010
Rebranding: Not Beyond Credibility

The bad news mounts for BP as the petrol giant has admitted that efforts to plug its
Deepwater Horizon well and prevent any more crude oil escaping continue to fail.

One mile from the surface, and 50 miles from some of the most beautiful and valuable
coastline on Earth, the leak continues unabated. And you can forget the estimates of how
many gallons of oil are being pumped into the Gulf of Mexico each day, because BP has
also conceded it has no clue exactly how much oil is leaking out.

These uncertainties add to the growing list of major imponderables facing the
beleaguered British oil company. BP has said it does not know when the leak will be
stopped, nor does it have any idea what the long-term ramifications for local communities
and industries will be. It has also said it has no clue what the final cleanup bill will come
to - except that it will be in the billions and that BP will be liable for every penny. Indeed,
the implications are so inestimably huge at this stage that the only accurate bellwether of
the kind of trouble BP now finds itself in has been the ashen, horrified look on chief
executive Tony Hayward’s face. All the media training in the world cannot disguise the
enormity of the problem now facing Hayward and his company.

Any oil company finding itself in this situation would be in trouble. But there is, of
course, a very specific reason why BP, of all companies, is going to suffer more
spectacularly than any other from this disaster. BP, as we now all know, now stands for
“Beyond Petroleum”. In the most famous repositioning case of the century, Ogilvy and
Landor helped BP to change its logo, its name and its positioning to reflect the fact that
the company was now actively “exploring new ways to live without oil”.
May 18, 2010
Brand Naming: Consider the First Letter of the Name

Should you start your new name with an S or a C? Why not a J or a K?

In other words, does the first letter of your product, service or company name really
matter? – aside from the gambit of leading a directory category with an “AAA
Plumbing”-style moniker.

The following table is not purely scientific, but it shows how letters which begin
“ordinary” words differ in frequency from those beginning brand names and trade names.

The first column comes from a page count of letters in a dictionary that does not include
proper names.
The second column shows the frequency in two long lists of brand names.
The third shows the frequency of trade names on the New York Stock Exchange.

May 17, 2010


Brand Salience: Why It's Important For Your Brand
Woody Allen once said that “80 percent of success is just showing up .” Unfortunately, at
purchase decision time, the vast majority of brands never show up at all. Getting
consumers to “think” about your brand more often, and in more buying situations, is one
of the most under-rated marketing challenges that brands face today.
Brand Salience — What is It?

Brand Salience is the degree to which your brand is thought about or noticed when a
customer is in a buying situation. Strong brands have high Brand Salience and weak
brands have little or none. This helps explain to some degree why big brands are big and
small brands are small: if no one thinks about you at the moment of buying truth, your
brand is going to be relegated to the dustbin of small and unnoticed brands.

Moment of Truth - Does Your Brand Have Salience ?

Brand Salience IS NOT the same thing as top of mind awareness. Top of mind awareness
is simply what brands come to mind when consumers are asked to recall brands within a
category. Brand Salience is different. Why? Because it is what brands come to mind
when consumers are in a purchase situation. More specifically, Brand Salience is the
memory of your brand and its linkage to other important memory structures. The buying
situation ”mindfulness” and linkage to memory structures is what differentiates Brand
Salience from top of mind awareness.
May 13, 2010
Expanding the Licensing Value of Your Brand

To best help you understand how to expand the licensing value of your brand, let's take a
step back and reflect on why companies choose to brand their products in the first place.

Companies brand their products to differentiate them from their competitors'. For
example, most consumers have no problem differentiating a Coke from a Pepsi. By
giving their products a brand, companies can begin a dialogue with their consumers about
their products’ attributes. Over time, a consumer learns she can rely on the brand to
deliver a consistent and expected value. One of the best examples of this is the Tiffany
brand. Whether or not you have every bought from Tiffany, you know the brand is
synonymous with the highest level of quality, service and reliability in jewelry. In fact,
Tiffany has consistently delivered on this promise for almost two hundred years. For this
reason, a Tiffany consumer will not buy from any other jeweler. Moreover, if ever asked
where her jewelry was purchased, most women enthusiastically proclaim the Tiffany
name.

When consumers are delighted by a particular brand experience, they begin to bond
emotionally with the brand. They become brand loyalists and advocates – buying the
brand more often and recommending it to others. This behavior serves to build the
brand's reputation. In fact, consumers will often purchase a brand for the first time
because of its reputation. The brand, therefore, adds value and certainty to an otherwise
unknown product. The stronger a brand's reputation, the higher the value of the brand
and the greater revenue it will drive for its owner. Prospective licensees want to license
brands with the strongest reputation as these are the brands consumers demand and
retailers prefer most. The stronger the brand, the higher likelihood that the licensed
products will sell in and sell through.