Second brand strategy
Key Points A second brand strategy is where a company with an existing brand (or brands) finds another segment of the market to address with a different brand proposition. At least, this should be what happens. In practice, it is often when an existing premium brand owner decides to discount its values into a second brand in order to penetrate a larger share of the market. However, the second brand need not be a discounted brand. Nestle launched its Gold Blend ? brand at a premium to its Nescafe ?brand. Johnny Walker’ Black Label is at a premium to Red Label. Concorde was at a premium to British Airways. Given that brand marketing companies tend to own many brands in the same sector, there is often a carefully segmented hierarchy of brands, from Ford’ Premier Brand Group (Jaguar, Aston Martin, Volvo etc.) to Ford Mondeo; from Six Continents?Garden Court to the Holiday Inn Express. Key dos : 1. Have a differentiated compelling brand proposition that you can uniquely deliver Address a market segment that is profitable 2. Use a different sales and marketing team as a guardian for the different brand proposition 3. If you are undercutting your existing premium brand(s), find the magic operational formula that will deliver the brand proposition more cheaply Key don’ts: 1. Simply discount your existing premium brand, as 뱎remium brand, but cheaper?/li> 2. Use the same sales and marketing team 3. Apply your exiting overhead costs to the new brand

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other airlines had to respond. BA launched Go as a second brand in order to directly confront easyJet. Sony vs. Ford Premier Brands Group vs. Hotel chains work well in brand hierarchies. Car companies work the same way ?BMW 3 vs. Fanta would not benefit from . to the same effect. The lesson appears to be that defensive second branding does not work. but BA did not know how to run a cheap airline. British Midland took the whole company into the price-competitive section of the market. 5 vs. as with Levis and Dockers • Opportunity-led ?this is the strategy whereby second brands are launched or acquired because there is a realistic opportunity for them in the market place. Here you are expanding into the niches. Go now belongs to easyJet (and is fazing out the Go brand name). the main Ford brand. so long as they are booked sufficiently in advance. recognizing that there is no middle ground between the low cost airlines and the premium positioning.Multi-brand strategies Many. you create a new brand name. KLM followed the same strategy with Buzz. brand owners run several brands in tandem. Aiwa. IKEA can co-exist with Habitat. chocolate bars and tooth paste A carefully defined hierarchy of brands ?see. albeit targeted at different customer segments. 7 series.g. Go and KLM vs. These can be: • • Different brands into different product categories ?e. and Buzz has been acquired by Ryanair (who are killing the Buzz brand). there has to be a clearly thought out strategy. for instance the hotel chains Six Continents and Accor. you force your competitors out of the market. VW vs. Hilton National. This is less a brand strategy than a brand pile-up Second brand strategies • Offensive ?by successfully launching new brands into the same market space. A class A proliferation of brands ?each time you develop a new product technology. Skoda • • • A move upmarket ?Gold Blend vs. under the BA brand. Red Label A move towards the mass market ?Hilton International vs. Buzz (before they were both sold). Johnny Walker뭩 Black Label vs. if not most. BA itself is offering competitively cheap flights. Mercedes E vs. This is the opposite of the classic Japanese strategy of launching into a niche-of-a-niche and expanding out. BA vs. and driving competitors out of the market • Defensive ?when it became clear that the easyJet low cost strategy would work. Nescafe.

A precise target customer segmentation 4. A profitable business model (so that it does not matter which brand gets the business) 2. setting up a second brand should be identical to setting up a first brand.being called Coke How to set up a second brand Done correctly. There needs to be: 1. A clearly differentiated and compelling brand proposition 3. A strategy of brand protection and exploitation . A determined delivery of the brand proposition in the market 5.

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