UMBRELLA BRANDING

An umbrella brand is an overarching brand used across multiple related products. Umbrella
branding is also known as family branding. It contrasts with individual product branding, in
which each product in a portfolio is given a unique brand name and identity.

There are often economies of scope associated with umbrella branding since multiple products
can be efficiently promoted with a single advertisement or campaign. Umbrella branding
facilitates new product introductions by providing a familiar brand name, which can lead to trial
purchase, product acceptance, or other advantages.

Umbrella branding may impose on the brand owner a greater burden to maintain consistent
quality. If the quality of one product in the brand family is compromised, it could impact on the
reputation of all the others. For this reason umbrella branding is generally limited to product
lines that consist of products of similar quality.

The best example is AMUL - Amul Butter, Amul Cheese, Amul Milk, Amul Icecream, Amul
Chocolates etc

Umbrella Branding

As with all effective brand strategy, umbrella brands require a single message, an expression of a
commonsense benefit grounded in human emotion that opens the way to own the conversation
within a business category.

Umbrella brands abound in business; examples include Virgin, Kellogg’s, Sony, and location
brands such as Japan, Manitoba, and St. Louis.

With an umbrella brand, the number of interactions the consumer has with the brand increase
significantly, thereby reinforcing the brand values, and it helps transfer the goodwill to new
products and categories. But the umbrella brand needs to be focused: It must stand for the same
values across the category or range of products, and have the same emotional link.

Generally, consumer durables and services brands have used umbrella branding, while
FMCGs have not, but even they have resorted to brand extensions rather than new launches.

Independent brands only make sense when the product clearly has a different proposition from
the company brand; like Lexus from Toyota and Swatch from Omega.

In the case of Asian Paints, there were so many sub-brands, there was a reduction of media
weights for advertising each entity. Then, the company shifted to a brand-centric portfolio, which
involved a change of logo, product names, packaging and advertising. But the response from the
trade and consumers has been positive, overall brand synergy and shop presence have increased,
and the advertising is more effective, he added.

So unless the product is clearly different in the mind of the consumer, umbrella branding is the
way to go. NIVEA is a great international example of an Umbrella Brand

With scarce financial resources, firms cannot afford to allocate huge budgets for building and
maintaining several brands. Since consumers have become quite unpredictable in their
newspaper-reading or TV-viewing habits, it is very difficult to assure the reach of messages to
the target audiences.

The advertiser has to use many broadcast and print vehicle options, with a high level of
frequency to create the intended effect for every brand, which ultimately puts a strain on the
budget. Hence, companies consider it wise to maintain a minimum number of brands in their
portfolio so that they can do justice to each by effectively rationing their investment in
promotions.

Companies phase out the brands which have become redundant and retain one or two umbrella
brands for every category with necessary variations under each. For instance, Hindustan Unilever
Ltd’s (HUL) beverage brands have been grouped under two umbrella brands – Brooke Bond and
Lipton; in the fabric wash category, the company has retained only Rin, Surf and Wheel, HUL
has relinquished brands such as Sunlight, 501, Dalda and Nihar; it plans to withdraw some more
brands and group them under some umbrella brands. HUL’s emphasis is currently on 35 power
brands.

Companies have understood the limited scope of several individual brands. In the technology
products category, the company name is used as the umbrella brand name for several product
variants, differentiated by numerical codes.

This practice is commonly found in categories such as mobile phones, colour televisions,
computers, where there are umpteen items in each product line. The company does not have to
build a brand each time and the promotion is more cost-effective, as there is a positive rub-off of
one promotion over the other.
Umbrella branding is the process of marketing under an umbrella brand. In general, a decision is
made to market a group of products under a single brand umbrella, and market positioning is
coordinated around this basic market image. The importance of this approach is that it produces a
cost-effective single stream of packaging and promotion for the product group, and also directly
relates the products in the marketplace at point of sale. 'If you've bought the phone, buy the
headphones', etc. The major incentive attached to umbrella brands for consumers is often a range
of technologies, special offers, package deals, etc.

he 1980s witnessed a revolution in the understanding of the working of the brands. Marketers
depict brands as a reflection of customers’ own personalities, so that they can relate to their
products well. In fact the distinguishing aspect of the modern marketing has been its focus upon
the creation of differentiated brands and using them as weapons for launching multi-level attacks
on competition. Market research has been used to help identify and develop bases of brand
differentiation. A brand identifies a product and its sources, but it does even more. Along came
brand extension. Today brand extension strategies are widely employed because of beliefs that
they build and communicate strong brand positioning, enhance awareness and increase
profitability.
Brands are often extended beyond their original categories to include new product categories.
Research has proved that the success of brand extension depends on the transfer of parent brand
awareness and associations to the extension. The transfer of these quality perceptions is the key
in umbrella branding. An umbrella brand is a brand that covers diverse kinds of products which
are more or less related. It applies also to any company that is identified only by its brand and
history. It is contrasted with individual branding in which each product in a portfolio is given a
unique identity and brand name.
Mr. K.R.Senthilvelkumar, a professor at Jansons School of Business offers the most pragmatic of
reasons behind an umbrella brand strategy, “with scarce financial resources, firms cannot afford
to allocate huge budgets for building and maintaining several brands”.
Nowadays consumers have become quite unpredictable in their newspaper-reading or TV-
viewing habits, it is very difficult to assure the reach of messages to the target audiences. The
advertiser has to use many broadcast and print media with high frequency to create the desired
effect for every brand, which ultimately puts huge burden on the budget. Hence, companies
consider it wise to maintain a minimum number of brands in their portfolio so that they can do
justice to each by effectively distributing their investment for promotion purpose.
Yes, umbrella branding is widely practiced. The Confederation of Indian Industry's second
FMCG (fast moving consumer goods) conclave in 2003 almost declared that umbrella branding
was the way to go in a competitive market environment. In an interesting anecdote, R S Sodhi,
GM Marketing (Gujarat Cooperative Milk Marketing Federation l), compared the umbrella brand
and individual brands to an Indian family, where in umbrella brands - like the Indian family, the
father is the head, looking over the children. When they grow up and become independent, they
hold the umbrella for the family. Individual brands on the other hand are like a western family,
who grow up fast and leave the father behind. Amul’s strategy of using “umbrella branding” has
really paid off. Amul’s advertising and marketing spend has never exceeded 1% of its revenues.
Most other food companies spend 6-7% of revenues on advertising and marketing. They
(GCMMF) are not big spenders compared to Britannia or Nestle. Despite a limited budget,
Amul’s creatives—in the form of billboards or the Taste of India campaign—have always
managed to evoke a larger-than-life brand feel, consistency and spirit of Indian culture in a
contemporary way.
Companies phase out the brands which have become redundant and retain one or two umbrella
brands for every category with necessary variations under each. For example consumer goods
major Reckitt & Colman India Ltd. chalked out an expansion strategy to introduce 20 new
brands in the year 1999-2000. The strategy also involved repositioning its existing brands and
consolidating sub-brands under its main umbrella brands - Dispirin, Dettol, Harpic and Cherry
Blossom. The strategy was designed to vault Reckitt & Colman, in terms of sales, into the big
league. With the launch of new brands and the repositioning of its existing brands, the company
aimed to achieve expected sales growth. The strategy worked well as Dettol as an antiseptic
lotion provided brand support to Dettol soap, which was re-launched in a fragrant form called
Dettol Fresh to take on HLL's Liril. Cherry Blossom acted as a mother brand for several easy-to-
use home products.
Hindustan Unilever Ltd’s (HUL) beverage brands have been amalgamated under two umbrella
brands – Brooke Bond and Lipton and in the fabric wash category, the company has retained
only Rin, Surf and Wheel, HUL has withdrawn brands such as Sunlight, 501, Dalda and Nihar; it
plans to withdraw some more brands and group them under a few umbrella brands. HUL is
currently focusing on 35 power brands.
Nivea cosmetics brand has a presence in huge number of product categories and countries. Once
upon a time Nivea's performance prompted a yahoo.com news article to name it the 'Queen of
Mega Brands.' This title was appropriate since the brand was present in over 14 product
categories and was available in more than 150 countries. Nivea was reportedly believed to be a
brand of local origin - having been present in them for many decades. This fact went a long way
in helping the brand attain the leadership status in many categories and countries. According to
analysts, the brand was the single largest factor for the 4.4% increase in the company's
(Beiersdorf) revenues (€ 4.74 billion) and 10.7% increase in after-tax profit (€ 290 million) for
the year 2002. Beiersdorf never tried to disturb the umbrella branding of Nivea and got fruitful
results.
Today as organized retailing is gaining popularity, we can see that popularity of private labels
owned by retailers. Retailers do not feel the need to develop many brands for various categories
because it is the loyalty towards their store name which draws and retains the customers. Hence
it is the umbrella retail store name which will be the brand for various product categories and not
individual names for each. Customers prefer these brands over that of manufacturers, due to the
fact that they address their functional needs well. The retailers also enjoy high margins for
private labels. Today a retail chain like Shopper’s Stop’s 20% apparel section is driven by
private labels. There are others like Trent from the TATAs which has developed its business
model purely on private labels.
From Asian Paints in 2003 to Electrolux, Onida and Airtel in 2004, they have all made a move
from individual product branding to umbrella branding. Just a few year ago Bharti Televentures
had brand Airtel for mobile services, Touchtel for land line and India One for long distance calls.
But with Airtel dominating the group's ad spends, the company figured that the other brands
were hardly making their presence felt. The unified licensing regime in December 2003 - which
means that only one license is required to offer fixed, mobile and other services - acted as a
catalyst (new Airtel logo/ Airtel outlets). So come September 2004 and the company started
selling all its services under one brand name - Airtel. It claims that the move not only upped
brand visibility but also charged up its distribution network.
No doubt, umbrella branding has a number of advantages over individual brands in terms of low
promotional costs and easy acceptance in trade but umbrella branding imposes on the brand
owner a greater burden to maintain consistent quality and brand equity. If the quality of one
product in the brand family is compromised, it could reduce sales of all the others. Single
umbrella branding works relatively better for services like telecom; it may not be feasible in
cases where there is a lesser degree of cohesion between categories, product values and target
customers. So, maintaining a few umbrella brands is better option. For instance, suppose LG, a
tech brand as far as Indian consumer is concerned, wants to sell you talc or toothpaste or
detergent under that name. Consumers would find it very difficult to say what is transferred
value from LG TV sets which they’re now going to put on their skin.
Nokia, a moralist for single umbrella branding dropped their single umbrella brand strategy in
2006 in naming it’s products. The company believed it needed to have a look at its competitors’
book. After the roaring success of the Moto RAZR, PEBL, SLVR and ROKR series, the Finnish
mobile handset manufacturer felt that consumers found names easy to remember compared to the
usual mundane numbers. Even LG launched its popular Chocolate range of phones under the
Black Label series. For Nokia, barring few exceptions, numbers have been the only way its
phones have been branded so far - remember 1100, 2600, 3310, 6020?
In 2006 they launched Nokia 8800 Sirocco Edition (a mixture of names and numbers). Nokia
introduced this approach to make it easier for customers to navigate across their range of phones.
They also launched E-series phones (which serve business users) and N-series (which have
multimedia features).
While some players say that the naming trend will be restricted to the high-end, feature-led
phones(for example- LG is also banking on the name game but in that case it is confined to the
high-end range of designer phones), others like Motorola are banking on names irrespective of
price slabs. Motorola believes that consumers don't look at these names in an abstract manner
and therefore names convey a message to consumers.
A few umbrella brands or individual brands? According to experts, independent brands only
make sense when the product clearly has a different proposition from the company brand; like
Lexus from Toyota and Swatch from Omega. In the case of Asian Paints, there were so many
sub-brands, there was a reduction of media weights for advertising each entity. Then, the
company shifted to a brand-centric portfolio, which involved a change of logo, product names,
packaging and advertising. But the response from the trade and consumers has been positive,
overall brand synergy and shop presence have increased, and the advertising is more effective.
Most probably in near future the media environment will make it impossible to create newer
brand names and the conditions at the consumer level, as well as the environment. So unless the
product is clearly different in the mind of the consumer, umbrella branding is the way to go.
Umbrella brands are going to rule!