BRAND ARCHITECTURE:Branding strategies, Drawbacks of the product brand strategy, The umbrella brand strategy

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Brand Management (MKT624)

Lesson 27

BRAND ARCHITECTURE

Introduction

We have seen that all brands regardless of what circumstances gave them birth appear as

independent brands and play a significant role through their existence. We have also seen that

circumstances can lead to creation of a stand-alone brand, a line extension, or a diversification.

Corporate strategies also lead to a collection of different brands that are managed as a portfolio

or a set of portfolios in case of large corporations.

What can be concluded from our discussions so far is that brands belonging to one business do

not work in isolation of each other for the reason that one set of circumstances give rise to the

existence of another brand whether extension or stand-alone under a different name.

Such developments are not without links and hence drawing a hard and fast line between and

among the boundaries of various brands is difficult. Their relationships go across each other's

boundaries and make those brands appear in hybrid forms, at times. If a brand is an extension,

it could well be part of a portfolio of a few other brands that may be a mixed bag of stand-

alones and extensions of some mother brand. The stand-alone(s) could be an acquired brand

making a good combination with other stand-alones or extensions introduced by the company

at different occasions for different segments. How do you manage such apparent complexity?

The lecture attempts to answer that.

Brand architecture

To understand brand architecture, we must know that there is a close relationship between

brands and products; brands distinguish one product from the other and they also indicate

products' origin. Given that, there has to be a system followed by different companies to name

and then organize their products as brands in production and marketing terms. The system must

also make it easy for the customers to understand those products in terms of buying different

brands. Such a system is driven by the branding policies a company follows and is known as

brand architecture.

Branding strategies

This system of naming brands and organizing them in marketing terms can be understood by

looking into how different companies develop brand-product relationship by offering every

brand a separate role. A study has revealed six different strategies followed by companies1. All

the strategies facilitate branding distinctions or serve as indicators of products' origin.

1. The product brand strategy PBS

It involves one particular name assigned to one particular product. This name reflects

just one positioning and hence is restricted to that positioning. In other words, for each

new positioning there is a new brand name and hence different names correspond to

different positions.

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Brand Management (MKT624)

Figure 32

P&G has adopted this as

The Product-Brand Strategy

brand

management

philosophy. In almost all

fields they are a part of,

they have different brands

Brand A

Brand B

Brand C

for different positions

detergents and soaps. Each

of the products has a

precise

and

exclusive

position to itself.

As an example, one soap

Product A

Product B

Product C

could be for skin enhancing

properties, another for

energy, another for family

use, and yet another as a

medicated one.

As another example, a

Positioning A

Positioning B

Positioning C

detergent

could

positioned as the best for

taking the stains out, the

Source: Strategic Brand Management by Jean-Noel Kapferer

other for overall neatness,

and yet another as the best value for money etc. Each brand has an identity of its own

and hence a complete chain of application of all marketing practices. The

accompanying figure graphically explains the concept.

The benefits are:

· Resourceful companies opt for this strategy; they like to create that multiplication-

of-supplier-effect to energize the category with multiple brand entries. It is the

collective effort on part of all players to do their bit in talking about points of

difference, educate the customer and as an aggregate effect bring the category to full

bloom, you will recall from discussion on multi brands.

· One big manufacturer like (P&G) likes to occupy and dominate all the functional

segments of the category, and by meeting different needs it consolidates its market

share.

· Different products help customers identify those differences better than extensions

that have external similarities. It is because of these factors that one starts

appreciating how the differences among various offerings of detergents are

optimized through their precise positioning that define stain removing properties,

a neat wash, or something that's ideal for hand wash etc.

· The product brand strategy is good for companies that enter a segment to preempt a

position and then acquire the role of the market leader. The name of the company

may not be highlighted with the result that each brand is independent of each other

and the failure of one does not really affect the other.

Drawbacks of the product brand strategy

· Each brand launch is a new launch. It is expensive considering the costs of

communication in different sectors of company's choice.

· Retailers are skeptical of new product's chances of success and hence resist

stocking.

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Brand Management (MKT624)

Multiplication of product brands in narrowly defined segments demands quick

return on investment. It is possible only in new and emerging markets in which

even smaller volumes can bring about high returns due to premium pricing.

Unlike extensions, a new brand cannot benefit from the success of another one

within the portfolio.

Distributors give the brand hardly any patronage despite company having a high

level of awareness and reputation.

2. The line brand strategy LBS

This strategy deals basically with

extensions. Meaningful success of a

Line Brand Strategy

brand can motivate a company into

extending the line. The advantages

are known to you. This sets the

stage for finding meaningful "fits"

Figure 33

and "complimentary" products. The

objective is to offer coherent

Lipstick

products under the same brand

name.

Upon success of a brand of lipstick,

Mascara

the manufacturer should get into

complementing products that may

have an emotional appeal across the

Cleansing Cream

same clientele. It, in other words,

exploits the success of the concept

by extending the brand while

staying very close to the central

theme.

The benefits are:

· The eventual extension involves only marginal costs linked to distribution and

packaging etc.

· It reinforces the selling

power of the brand and

the image.

· It leads to ease of

distribution.

· It reduces launch costs.

The drawback is:

· That you have to stay

very close to the existing

product.

3. Range brand strategy

Figure 34

This strategy offers one brand

name through a single promise

for a range of products

belonging to the same area of

competence. Range brands are

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Brand Management (MKT624)

common among food items soups, sauces etc., and luggage industry; suitcases, brief

cases, and attaches.

Communication takes place in one name for promotion to all the product subjects.

Brand, in other words, communicates in a generic manner by developing a unique

concept.

4. The umbrella brand strategy

When the same brand supports several products in different markets, it is known as the

umbrella brand.

Umbrella Brand Strategy

Yamaha in bikes, pianos, and

guitars; Philips in electrical

Figure 35

Umbrella

bulbs and lighting, electric

Brand

shavers,

and

televisions;

Mitsubishi in banks, ship

building, cars, and foods etc

are all examples of umbrellas.

The main benefits are:

Concept A

Concept B

Concept C

Concept D

· One can capitalize on

the strength of one

product and gain the

benefit

scale

Product A

Product B

Product C

Product D

economies in other

markets.

· The

almost

instantaneous goodwill

can be generated only if

Specific

communications

the brand is well known

by product

and

enjoys

great

Market A

Market B

Market C

Market D

reputation like the

brands mentioned above.

· Firms of great reputation can save a lot of money on communications if they

enter markets where they were not present before.

· In present day's over-communicated era, this is a tremendous advantage given

the fact that the cost of achieving awareness is out of reach of so many

companies.

· Umbrella brand strategy allows the core brand to gain strength from the

associations in the areas it was not present before. Umbrella attracts new entries

for the image capital, but in the process gets more strength from the new entries

and reinforces the image capital

The drawbacks are:

· The main constraint toward creating the umbrella is the fact that each division

has to come up against a specialist brand in its segment convincing the

customers that they not only match, but excel in quality. In most of the cases, it

is not evident except the Japanese companies! Toshiba in different segments!

From computers to TVs to musical instruments to kitchen appliances and more

areas are rightly perceived as Toshiba's strength.

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Brand Management (MKT624)

They have to prove the relevance of each product they produce (Toshiba's

example) otherwise it becomes difficult to become a dominant force. It is

because of this quality factor that only companies with good reputation can be

successful in creating such a strategy. Mere awareness doesn't work.

Since umbrella strategy is a stretch into categories not charted and navigated before,

there should be a limit to the temptation. It is like stretching a rubber band; beyond a

certain point it breaks. It is called the rubber effect2. The more categories a brand

covers, the more it weakens like a rubber and hence loses its force.

Bibliography:

1. Jean-Noel Kapferer: "Strategic Brand Management Creating and Sustaining Brand

Equity Long Term"; Kogan Page (188)

2. Jean-Noel Kapferer: "Strategic Brand Management Creating and Sustaining Brand

Equity Long Term"; Kogan Page (199)

Suggested readings:

1. Jean-Noel Kapferer: "Strategic Brand Management Creating and Sustaining Brand

Equity Long Term"; Kogan Page (187-210)

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