Best Practices - Brands: Parent Companies Versus a New/Existing Subsidiary

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Best Practices - Brands: Parent Companies Versus a New/Existing Subsidiary

When companies are considering re-branding, there are two main strategies to consider. A branded house strategy enables the company to achieve one strong brand and enjoy lower operating costs. A house of brands enables a company to focus on singular brands and possible increase their reach.

Re-Branding Options

Branded House

  • With a branded house the firm is the brand. It can also be called a mono-brand portfolio. They act as a "holding company" for the various brands under their umbrella, and their brand is used on all products. This is the most common type of branding. A good way to think about this strategy is that the "sum of the parts makes the whole larger and stronger." If you have one brand that can be successful across markets and target groups, this is a good choice.
  • Benefits of a branded house include the following:
    • You can achieve a strong brand that is very visible and has a strong reputation and awareness. The company does not have to focus on multiple brands, therefore they can be laser-focused on one singular brand.
    • It is easier to put all your focus into a single brand. The company can put all their resources into this one brand, including financial and labor resources.
    • You can achieve a strong brand that is very visible and has a strong reputation and awareness. The company does not have to focus on multiple brands, therefore they can be laser-focused on one singular brand.
    • It is easier to put all your focus into a single brand. The company can put all their resources into this one brand, including financial and labor resources.
    • Measuring the return of a single brand is less difficult than that of a house of brands.
    • Marketing costs are reduced, due to "cost amortization across the brand".
    • The branded house is often a good choice for smaller companies because it is easier to manage compared to other structures.
    • It is more efficient since there is one marketing strategy and one brand to consider. Fewer resources are needed to promote only one brand.
    • When done correctly there is a reassurance to the customer and minimizes confusion.
    • When launching new products, this strategy is more cost effective.
    • It is easier to coordinate stakeholders.
  • Disadvantages of a branded house include the following:
    • If a problem occurs with a product, it can spill over to the entire brand. This is an all or nothing approach when reputation is considered. Everything is attributed to the brand itself.
    • If the brand is positioned too broadly across too many product categories their meaning can become diffused. Customers can be confused as to what the brand actually stands for.
    • This model requires the company to be very diligent and work hard to maintain a single brand mindset.
    • Sometimes it is difficult to add new audiences or new brands through acquisition.
    • This approach can narrow your potential market.
    • A single house can make you a bigger target with competitors.

    House of Brands

  • With this model the company is managing each brand as though it is a separate company. More focus is put on building sub products and their independent brands. The main parent company is in the background with this strategy. This strategy works best when each brand is clearly defined and when the target market does not respond to the other brands involved.
  • Benefits of a branded house include the following:
    • There is more freedom to focus on individual brands.
    • With multiple target offering from multiple brands, your reach is greater.
  • Disadvantages of this brand include the following:
    • This model brings on more complex legal requirements as you deal with each separate company.
    • The house of brands strategy is used less often by smaller corporations because of the amount of resources needed.
    • Focusing on so many brands can be overwhelming and costly when you consider marketing and operating individual lines. A considerable more amount of time and resources must be devoted to maintaining a house of brands.
    • There is a risk that one brand will be cannibalized by another brand within the company.
    • This strategy does not let you take advantage of the synergy of having multiple brands under one house.

What Branding Strategy is Right for our company?

  • When picking a branding strategy, it is recommended to look at your goals, audience, commitment, and resources. Are your brands competing against each other? If so, it is time to take a deeper look into the brand structure.
  • How do your customers feel about your products? By looking at website analytics, you can see how customers behave on your website along with what they pay the most attention to. If your customers are spending excess time jumping between products then leaving without making a purchase, they are probably confused. Social media polls and phone surveys are also good ways to figure out how customers perceive your brand. This information can help you decide the best way to move forward with your re-branding. Performing a brand audit to see how customers perceive your brand along with how your brand compares to the competition can give valuable information to make a branding decision.
  • Does your company have a long history and loyal customers? If so, a branded house might be the best strategy. If you have multiple brands that are aimed at the same audience, a house of brands could be a better option so that the companies do not interfere with each other's profits.

Company Examples

  • General Motors re-branded after the industry bailout in 2009. They realized they had too many brands that were overlapping and unprofitable. As a result, they lost focus on the bottom line. After eliminating poorly performing brands and overlapping brands, they became a better performing company.
  • Cisco is an example of realizing its corporate brand. The company has migrated all its brands to the Cisco name. This has enabled them to use the positive image of Cisco and apply that to all their offerings.
  • Regal Beloit is another example of a branded house. They are a $3 billion dollar a year manufacturer of motors and gears. After years of making acquisitions, the complexity of their company became an issue. Customers were confused because they had to deal with so many brands, especially when some of them offered the same products. Customer service was fragmented as a result. To simplify their holdings, they took a long look at their companies. After restructuring, the company began to benefit from a clearer vision.
  • AMRI is a global research and manufacturing organization. They realized that after many acquisitions they needed to bring their businesses together for a unified strategy and brand message. There was brand confusion, and each company had a different mission and goals. After performing perception surveys, it was discovered that the parent brand had better awareness than any of their acquisitions. To combat this they started by designing a new logo that conveyed the goals of the company and their value proposition. They used social media and email to generate excitement over the new launch. This new brand, that encompassed all of their companies, let them differentiate themselves in a crowded marketplace.
  • FedEx has recognized many benefits from the branded house strategy. Their branded house strategy has let them acquire companies like Kinko and attach the respected FedEx name to it. Kinkos immediately received a boost in recognition and benefited from the FedEx name.
  • Hikma Pharmaceuticals sells generic drugs and had acquired several new companies. Their re-branding included a new logo, platform, and a unified name for all companies. This has enabled them to articulate what is best about Hikma, like their values and dedication to quality. Customers now have a clearer idea of who Hikma is and what they stand for. This gives customers better reasons to partner with them.

Research Strategy

We obtained several case studies and research articles that contained best practices and the pros/cons of re-branding options. The findings presented have appeared multiple times in our research. During extensive research, no case studies that focused specifically on the per industry were discovered. We have included a wide variety of examples in lieu. When researching re-branding, most case studies feature companies that did a re-brand exceptionally, this most often was a large company. Once we discovered this, we went deeper into the research and best practices seeing where other businesses were mentioned. By doing this, we found several mentions of what options are better for smaller companies and have included them in our findings.

  • "Branded house: In this model, the firm is the brand. Services and market sectors (or practice areas) are subsets of that primary brand and are not formally branded. Apple or Google are globally known for this model. Under Apple’s primary brand comes many subset brands: Mac, iTunes, iPhone."
  • "Certainly, even smaller firms can successfully pull off this model. In all instances, the subset brands are recognized, but not to the extent that they overshadow or detract from the primary brand."
  • "Benefits of the branded house strategy In professional services, the branded house strategy is more commonly used. Let’s look at the reasons why. A strong brand—one with both high visibility and strong reputation—requires careful nurturing. Our research shows that many professional services firms overlook brand visibility, and their brands are weaker for it."
  • "If your goal is to enhance both visibility and reputation it is easier to focus on a single brand—the branded house strategy."
  • "It’s no surprise that brand strength is more easily attainable under the guise of a branded house. That is because the firm channels its financial and labor resources toward strengthening a single brand, rather than diluting resources that compete in the building of multiple brands."
  • "Under the house of brands, the firm operates like a holding company for the various brands; managing each brand as though it were a separate company and dealing with all of the necessary legal requirements of this strategy certainly carries greater complexity."
  • "In some specific cases, such as state licensure requirements, funding or liability structures make it more reasonable to pursue a house of brands approach. For example: an environmental engineering firm engaged in Superfund land reclamation services may consider a house of brands to limit liabilities."
  • "The key to determining what brand strategy is most appropriate for your firm depends on strategic goals, audience, resources, and commitment. Developing a house of brands can potentially compound the challenge of building your firm’s overall brand strength. And measuring the return on investment for a single brand is not nearly as challenging as measuring that same return on many parallel brands."
  • "All too often, “brand” is hardly considered at all, often leading to sub-optimal performance in new market spaces where a particular brand either lacks the credibility to stretch, or to many brands are thrust upon a customer segment resulting in confusion and disengagement. "
  • "After years of acquisitions, the portfolio of GM had swelled to the point that its complexity was having negative effects on the company’s performance. In 2009, immediately following the auto industry bailout, GM had eight brands comprised of Chevrolet, Buick, Pontiac, Saturn, Cadillac, Saab, GMC, and Hummer (not to mention Oldsmobile, which it finally eliminated in 2004). GM’s intent of providing a vehicle for every stage in life had spun out of control, leaving the car company with too many unprofitable and overlapping brands, many of which were ineffectively positioned to win within their chosen market segments. "
  • "This complexity resulted in the company losing focus on where it could best compete and sustain profitable growth. It took an economic crises to force a much-needed pruning of the brand portfolio, and thus, requiring GM to be more selective about which brands it would make its big, long-term bets to drive the future business. It smartly eliminated brands, such as Pontiac and Saturn, which were not market leaders, and over-lapped other brands on the portfolio, as well as other poor-performing, niche brands, such as Saab, which never met the potential GM saw when it fully acquired it in 2000."
  • "Over the last decade, Cisco has come to realize the power in its corporate brand. Even in its most recent moves, it has begun to draw a closer relationship between the corporate brand and those that were standalone, such as digital collaboration tools Telepresence and WebEx. While retaining those names due to the equity built up over time before and even after they were acquired, the company has migrated them to become branded product lines of Cisco, thus continuing to leverage their strong names in their respective markets, but also to begin driving an exchange of equity with the Cisco brand – Cisco lending brand associations to Telepresence and WebEx, and both those brands lending associations to Cisco. Clearly, Cisco has a branded-house philosophy, but it applies it prudently and thoughtfully to capture the most value in distant markets, while sensing the optimal time for change."
  • "Regal Beloit (recently re-named “Regal”), is a $3B-plus manufacturer of motors and gears headquartered in Beloit, WI. The company is defined, in large part, by the multiple acquisitions it has made throughout its history, notably a series of small acquisitions in the 1980s, and two from GE in 2004 that doubled its size at that time. While most acquisitions proved successful by contributing to the top line and giving the company access to new markets and customers, the operational complexity had grown so severe that it was affecting both the bottom line and customer satisfaction. Acquired company brands had very rarely been eliminated, let alone integrated into the portfolio, thus making it increasingly difficult to build equity into any of them. Customers grew increasingly frustrated with having to deal with so many brands, many of which seem to offer the same products, not to mention the jumbled knot of customer service that resulted from avoiding integration."
  • "The amount of company-level brands had grown to over 30, each one having a multitude of product brands to manage, often with significant overlap. It took the acquisition of A.O. Smith’s electronic products division in 2011 and continued outcry from customers about poor service to make Regal Beloit take a more serious look at its brand portfolio"
  • "Clearly its “day of reckoning” had come. To simplify the portfolio, the company went through a formal process resulting in the promotion of few brands to “global investment status,” others to “product line status,” and many others into a “migrate and rationalize status.” This effort is ongoing but the company is already reaping the benefits of this clearer vision."
  • "When AT&T acquired Leap Wireless International in early 2014, it needed to determine whether or not to keep the Cricket brand name, which offered pre-paid, discounted, smartphone plans with unlimited talk, text, and Web access. The acquisition will strengthen the market position of AT&T and allow it to build its presence in the increasingly lucrative market with which it did not previously participate, as the Leap acquisition allows AT&T to access an additional 96 million people in 35 states. Although somewhat new to the market, the affinity many consumers built toward the Cricket brand was too strong for AT&T to consider eliminating it. Cricket, for the time being, will remain and be distanced from the AT&T brand, much like MetroPCS brand exists relative to its parent, T-Mobile."
  • "Branded House—also called mono-brand portfolio, this strategy is used by firms that use their corporate brand names on all its products. "
  • "Benefits associated to this strategy are incremental brand awareness and brand knowledge, reduced marketing and advertising expenses due to cost amortization across the brand portfolio, and positive spill-over effect throughout the products. "
  • "However, there are also risks associated to this strategy, especially in terms of reputation risk (if a problem occur in one of the products, negative spill-over can happen in the entire brand) and dilution risk (when a brand is positioned too broadly across several product categories, its meaning can become too diffused)."
  • "AMRI is a global contract research and manufacturing organization that provides discovery, development and manufacturing services to clients in the pharma and biotech industries. After acquiring seven global entities across North America and Europe within three years, AMRI needed to bring these businesses together through a solidified strategy and cohesive brand and message. "
  • "Prior to partnering with SCORR, AMRI’s legacy businesses had functioned as separate brands with their own missions, messaging and marketing collateral. These businesses did not position AMRI’s full suite of offerings consistently. Furthermore, brand confusion made it difficult to garner company buy-in. AMRI needed to create a brand identity that differentiated it from its competition, and assure employees, clients and potential clients of the continuity and stability of the company."
  • "One particularly important finding from the external perception surveys indicated that the overarching AMRI brand garnered higher awareness than individual legacy companies. This meant that acquired entities would not lose brand equity by integrating into the overall AMRI brand. Furthermore, the assessment identified brand confusion regarding what services and capabilities AMRI offered."
  • "To meet one of the company’s immediate needs, SCORR refreshed AMRI’s logo and developed a tagline that differentiated AMRI and accurately conveyed its expertise. The new tagline clearly articulates AMRI’s brand promise and its willingness to embrace difficult and niche challenges: “Complex Science. Expert Solutions.”"
  • "Driven by key findings from the market research, SCORR then developed AMRI’s Big Idea — the visual concepts and core messaging that articulate AMRI’s value proposition. Building on AMRI’s foundation of applying scientific expertise and advanced technology to create customized solutions for complex challenges, SCORR developed messaging for each of AMRI’s core audiences around one concept: “Exact Science.”"
  • "To generate excitement about AMRI before the show, SCORR created a teaser campaign that included print and digital media placements. Additionally, a drip email campaign, social media posts and a video directed clients and potential clients to a custom landing page that continuously updated, gradually revealing more of the new identity as the launch approached."
  • "Comparing performance in the quarter before the brand launch to the quarter after, AMRI experienced significant traffic increases across all channels."
  • "The SCORR team created social media posts promoting trade show attendance as well as AMRI’s rebrand, education materials, news and events, with a focus on AMRI’s complete suite of capabilities and thought leader presentations and publications. These high-performing posts drove increased website traffic, with a 176 percent increase in web traffic from social media from Q1 to Q2"
  • "• By focusing AMRI’s brand identity on solutions rather than on the identities of individual legacy companies, SCORR helped AMRI effectively unify its acquisitions into its primary brand. "
  • "• AMRI has engaged its employees in brand advocacy, resulting in improved social engagement and sharing. "
  • "• AMRI’s new brand differentiated the company in the crowded marketplace."
  • "A Branded House is the most common form of brand architecture. Major brands like Google and Apple are exemplary models of this style, wherein both have smaller sub-brands, but all are marketed and operated under the umbrella of the parent brand"
  • "For instance, you might check for appointments in your Google Calendar. Later, you write a message in Gmail. Tomorrow, you’ll complete a budget in Sheets. Each of these products is a sub-brand of the parent company, but they do not operate independently of one another, and they never overshadow the primary brand. "
  • "FedEx is another company that has done an excellent job with their branding and has certainly reaped the benefits of taking the Branded House approach. Their brand lineup includes not only FedEx Express, but FedEx Freight, FedEx Ground and FedEx Kinkos. "
  • "Hikma Pharmaceuticals has been selling generic drugs globally for 40 years. But it’s also been acquiring companies and building out capabilities, and it's amassed a bevy of brands and employees around the world."
  • "The company recently decided to rebrand—with a new brand platform, modern logo and visual identity and a single unified name for every Hikma-owned company."
  • "The idea behind the rebranding went further than just unifying the company under one name and mission, however. Hikma wanted to instill a common culture among all its employees, while also doing a better job of telling its story to the market and stakeholders."
  • "“The most immediate benefit of the rebranding is being able to better articulate what is best about Hikma, our values, our dedication to quality, and to codify it and use it to create a ‘north star’ for all our employees,” Brooke Clarke, global head of corporate affairs at Hikma, said via email"
  • "The second and also very important benefit of the rebranding is to provide our customers with an additional reason to consider us and to partner with us. When they know more clearly who we are, what we stand for and where we are going, it opens up reasons to work with us that go beyond the individual benefits of our product portfolio.”"
  • "How do you determine how customers feel about your products? You can look at website analytics, in particular, the behaviour maps, that show how customers behave on your website and which buttons and images they pay most attention to. If your customers spend too much time on your website, jumping between similar products and brands and then leave without making a purchase they are most likely confused. You can also use customer phone surveys and social media polls to get more in-depth data."
  • "Customers lead the conversation. In the highly competitive environment of today, if customers don’t understand your offering and your brand purpose, they will leave or turn to your competitor."
  • "Disorganised Brands Undermine Future Business Planning Success in business depends on many factors, but the careful planning of marketing strategy is one of the most important elements. If you don’t have a proper structure in place, it’s going to be hard to allocate resources and budgets and determine priorities. In business, every minute counts, so if you spend weeks trying to prioritize products and brands, this might be the time to reassess your brand structure. "
  • "In this model, the firm is the brand. In the Branded House, the Master Brand is always present and linked to all products and subproducts."
  • "For example, FedEx has several business branches, each responsible for a certain type of service: Freight, Express, Supply Chain Service and so forth. Even though these are company departments that conduct different types of operations, they are all united under the same brand – FedEx."
  • "The Branded House architecture is often used by small businesses due to its simplicity and the ease of management compared to other brand structures. There is only one set of branding elements and the focus is always on one brand."
  • "Filicori Zecchini is an Italian brand that produces coffee, tea and chocolate. They also have a set of locations across the USA. Each product has a separate website section, but all products are related to the coffee shop industry."
  • "House of Brands is the second most common type of Brand Architecture. This structure focuses on creating and building independent subproducts and their brands, while the main parent or corporate brand sits discreetly in the background."
  • "For example, you won’t see the main brand logo prominently displayed other than on the back of the packaging. This situation is changing, however, with parent brands enhancing visible presence deliberately. It’s increasingly hard to stand out in in our highly competitive markets, so parent brands are using their power rooted in corporate responsibility and impressive brand history to support their sub-brands. You will often see the parent brand logo at the end of the advert or in the more prominent place on the packaging. This is an ‘Endorsed’ brand strategy where the House of Brands incorporates the elements of the parent or corporate brand into their strategy."
  • "House of Brands structure is used less frequently by smaller businesses because it needs bigger resources to develop and sustain but there are still some real live examples. Check out Garage Project – a craft beer brand. Whenever the company launches a new product, a new brand is created, whilst Garage Project[2] brand presence is almost unnoticeable. The beer brands are clearly recognized with custom fonts and illustrations for each brand, but there is no consistency due to each brand being treated as a separate individual brand."
  • "So how do you create a product or service brand structure? Usually, building a brand structure requires 5 simple steps[3], however, all of them require substantial analytical and critical thinking work. Here is the exact step-by-step plan:"
  • "1. Identify What Confuses Customers and/or your Internal Team Start by assessing the current situation. You might discover that you need the most simple brand structure, or that you’re already losing money because of confusion over the multitude of product/service brands in your portfolio. Either way, evaluation of your current brand structures and the creation of a new or amended structure is typically necessary because only then can you ensure that your brand, products and sub-products or services don’t compete with each other."
  • "Questions from customers also indicate that something is wrong with how the brand and products are perceived. If you start getting multiple questions of the same nature on social media or through other channels, it’s time to identify what exactly confuses your customers."
  • "2. Choose the Right Brand Architecture Model"
  • "Is the nature of the new product so different that it can affect all other products negatively? Does the current brand have a lot of history and a loyal customer base? If you have multiple free-standing independent brands, is there a value in linking them together? Are new products aimed at the same audience segment and are they at risk of cannibalizing each other or core brand sales"
  • "3. Create a Mindmap of Product Brand Structures List all your current products, services and future offerings. Describe the benefits and features[4] of each product and their target audience. Determine which benefits are functional and which are emotional. Then review each feature individually and determine its importance."
  • "Think about what brands you can group together based on the customer segment and similarities in the emotional and functional benefits that the products deliver. Also, consider how strong the positioning of each brand is."
  • "4. Adding a New Brand to The Portfolio Once you commit to your brand architecture choice you need to stick to it. This means that every time you add a new product to your portfolio you need to evaluate where it fits strategically."
  • "5. Mergers and Acquisitions Mergers and Acquisitions lead to a host of integration questions. Even before the merger occurs, you need to decide how the new brand fits into the brand structure. Here, again, the value that brand brings to your portfolio will be the major decisive factor"
  • "Advertising and distribution strategies are largely dependent on the current business strategy. For example, while Hershey and Coca-Cola promote chocolate bars and BonAqua separately, they also run generalized branding campaigns where the focus is on the Master Brand. The rationale behind Hershey’s strategy was the company’s focus on unifying all the emotional benefits into one overarching theme, defined as “happiness”. This approach has an added benefit since running a single company campaign is usually cheaper than the creation and production of multiple campaigns. "
  • "Essentially a brand audit will reveal how the customer perceives your brand, how your brand compares to the competition, how your brand has performed and where the opportunities lie for innovation and growth. A brand audit enables you to build the right brand architecture so you can increase your visibility and your sales — without having to worry about explaining your offering again."
  • "Upsides A Branded House strategy offers numerous benefits to companies that offer multiple services or products under one branded entity, including: Efficiency – one marketing strategy and one brand code covers every offering Ease – confusion and competition are avoided by keeping every offering under the same brand Evolution – a strong brand can lead to greater success for future offerings and new products, as consumers are more willing to accept change from brands they already trust"
  • "Pitfalls Though Branded House strategies make sense for many businesses, there are still a number of potential issues to consider. Reputation – products and services are tied to your brand’s public perception, leading some consumers to take an “all or nothing” approach Limitations – a great product doesn’t mean great success if the parent brand is weak or underperforming Ambiguity – confusion over what your brand does (e.g. Apple: Is it a computer company? A music store? A phone manufacturer?)"
  • "A House of Brands strategy can offer businesses with a variety of offerings the freedom and flexibility to flesh out each individual brands. Benefits include: Reach – a greater ability to define unique target audiences and create products that broaden a brand’s demographic reach Safety Net – companies can take more risks with new offerings, knowing they have strong, tested brands to fall back on if necessary Shield – in the case of bad press, the individual brand can take the heat while keeping the company’s reputation secure"
  • "Pitfalls Maintaining a brand isn’t easy. Maintaining many of them can seem nearly impossible. There are many considerations to be made when constructing a House of Brands. Overwhelming – creating and implementing multiple marketing strategies and operating many individual service lines is difficult and costly Isolation – there isn’t as much power behind the parent company, so it cannot be relied upon to bolster the reputation of individual brands Image – significant confusion over the parent company can occur (do they represent the brands, or do the brands represent the company?) "
  • "Strengths: It is easier for consumers to recognize the products and to understand them because of the descriptor. It increases brand awareness Focusing brand marketing (and marketing spending) on a single brand strategy and brand image "
  • "Weaknesses: If a product/service goes through a crisis, the whole brand may suffer – any negativity associated with a service/product is attributed to the brand and all its other products/services – everything that occurs is attributed to the brand "
  • "House of brands (free-standing brands): Separate identities for each brand: brands have their own names, personalities, audiences, and sometimes they compete with each other. They are designed to stand apart and be independent from the master brand or the other house brands. It is common for the consumers to not be aware of the parent brand."
  • "Strengths: If a free-standing brand goes through a crisis, it is not “contagious” to the other brands Full liberty in creating the identity: freedom to create different brand strategy, name, logo, design, and creative campaigns Presence in different market niches, targeting different audiences"
  • "Weaknesses The fact that every brand needs its own strategy, identity and marketing activities is a financial disadvantage. The time and resources involved in planning and implementing the brand activities will be greater Success will not be directly attributed to the parent brand"
  • "Understanding the Branded House Strategy So, since the master brand remains on top and at the forefront of everything in this strategy, its children brands cannot be treated or seen as separate brands. They look more like products coming under the name of the same brand. However, these brands act just the way roots act for plants and trees, i.e., they suck minerals from the soil, but it’s the tree that grows bigger."
  • "Why Brands Choose Branded House Strategy While it’s the owners of these brands who can best explain their reasons for picking this strategy, we can explain this phenomenon based on two key benefits that brands obtain with this strategy."
  • "Sub-brands Bask in Master Brand’s Reputation"
  • "You can see that in this type of brand model the reputation is reciprocated by both the parties. First, it is the child brand that benefits from parent brand’s reputation, and when the child brand becomes successful, the parent brand also sees a boost in its glory."
  • "With a branded house strategy, the parent brand can reduce marketing costs to a great degree. Rather than making efforts to promote different brands, the parent brand has to use fewer resources to promote only one brand."
  • "The Danger of Using Branded House Strategy While there could be other small disadvantages of using this strategy, the biggest one is that if sub-brands are not as good as the parent brand, their bad image tarnishes the parent brand’s image as well. This same thing happens in the families where the acts of the children are often associated with the parents and their upbringing. "
  • "Keep in mind that when you choose this strategy, every step you take influences your parent brand. What this means is that you will have to stick tenaciously to your vision to prove it. For example, if you stand for quality, you will have to deliver it through every brand, and if you stand for affordability, you will have to practice as a religion with every brand you introduce."
  • "A branded house, when done properly, has an overarching reassurance to the customer that those that choose this BRAND share an attribute. Not a product attribute but an identifiable personal attribute that not only sets them apart but is integral to their own personal identification. "
  • "Most branded houses make the mistake of believing (in this case a form of self-deception) that the parent brand equity is also about efficacy or category. We reiterate: this idea is corporate identity at best. More often, is it simply an acknowledgment of the commodity benefits of the category that comprises your business sandbox. "
  • "Generally speaking, creating a branded house is a more efficient model than being a house-of-brands because it allows for a more cost effective means for new product launches and brand extensions. However, executing the house of brands strategy successfully requires uncommon diligence and hard work. "
  • "Both of these are scarce and therefore very valuable. It is just plain easier to launch individual brands or to try to differentiate your branded house by the table stakes of your category because all these require is an understanding of yourself not an anthropological understanding of your most coveted prospects."
  • "Each brand feeds into the master identity, reinforcing the brand attributes, and also draws down on the strength of the master brand. To re-appropriate a cliche, for a branded house, the sum of the parts makes the whole larger and stronger."
  • "The branded house strategy works well to provide a common platform for individual product brands while each marketing and positioning element simultaneously builds both the product brand and the master brand."
  • "A branded house takes advantage of the same outcomes and audience - it capitalises on existing synergies and doesn't cannibalise products within the house because the purposes are differentiated."
  • "Planning, resources and budget are all centralised rather than split between teams and brands in a branded house model. Building and controlling a single brand is also easier for brand and marketing teams."
  • "A branded house strategy makes it difficult to add new audiences (who aren't users of your core brand) or to add new brands through mergers and acquisitions. New audiences often need a different outcome from the product or category, a different value proposition or a different price. They may be consciously avoiding your brand because it doesn't meet their needs and will be sceptical of a play into a new space with the existing brand, or it may not be possible to make a play into this space because of strategic or values-based limitations."
  • "House of brands definition A house of brands has diverse audiences, outcomes, brand purposes and visual identities, sitting underneath a corporate brand. The brands, promoted as separate entities, often without reference to the corporate brand, let alone each other "
  • "Unilever is the brand behind many brands. These products are so disparate, with the purposes and audiences so diverse that it couldn’t possibly market them all under the one brand. Some of this is naturally due to the acquisition of additional brands over the 80+ year history of the company."
  • "A house of brands works best with the individual brands clearly defined by distinct target markets and marketing strategies - most commonly consumer brands. It works where a particular target market doesn't respond to the other brand e.g. the user of Dove for Men isn’t particularly enamoured by the Lynx brand and doesn't want his body care routine associated with that of teenage boys."
  • "Negatives of a house of brands strategy The downside of a house of brands approach is that it requires more effort to plan and build different the different brands that make up a house of brands. Again, it is imperative that the brands don’t cannibalise each other – in that case, you are better off with a branded house. "
  • "Alongside increased effort is increased budget, because you cannot rely on cross-overs from one product brand and audience to naturally pitch another brand to the same audience."
  • "Hierarchies can often be quite complex in a house of brands and the corporate brand underpinning all of them can become lost. Unilever, for example, had no branding presence on the packaging of its product brands for years, and now has only a small logo presence."
  • "In terms of making a business case for a branded house approach, a stronger corporate-led brand strategy drives financial performance by: Creating economies of scale in marketing and operations Lowering the total cost of promotions/ads Lowering the overall cost of building brand equity Lowering product launch costs Making it easier to extends brands within the portfolio Making it easier to coordinate stakeholders within the portfolio Allowing companies to leverage customer loyalty, and repeat and cross-purchases across the portfolio"
  • "There are, of course, financial risks to that must be addressed managed in order to make this strategy successful. For one, it narrows the potential market, where corporate brand equity and capabilities may effect credible play. It also creates higher risks in terms of competitors attacks (as a single house, you’re a bigger target) and reputation risks, where one product misstep could bring down the whole house. However, growing access to information and demands for transparency make it increasingly difficult for corporate entities to hide behind a house of brands, so this playing field may level out."
  • "A branded house approach also does not mitigate the need for creating strong product names that are recognizable, create clear differentiation, and drive preference. It does, however, speak to the need and importance of the corporate brand as an enterprise-wide asset and emblem of category leadership. This is why many healthcare companies are now re-examining the role of their corporate brands and begining to leverage its influence."
  • "Branded House Is this structure the right one for you? This structure makes for a consistent brand experience that minimizes confusion for your customers. You get economies of scale and synergy effects, thus making it easier for you to build brand equity for each individual brand and as a whole for the portfolio."
  • "On the other hand, by putting all your eggs in one basket, there is also a risk of negative spillover effects. In addition, it can also be both expensive and hard to conduct big changes in the future. In other words, if you believe that you have one brand that can hit homerun across markets, categories, target groups and even tackle geographical and language barriers, a Branded House is the structure for you."
  • "The fourth structure is House of Brands, where all brands are independent stand-alone brands. An example of this is P&G with Gillette, Oral-B, Head & Shoulders and Pampers to name a few, or Yum! who is the parent brand of Taco Bell, Pizza Hut and KFC."
  • "Is this structure the right one for you? This suits your portfolio if you want to maximise the impact on a market, category or target group, and want a clear positioning and targeted value proposition for each brand, without having to worry about negative spill-over effects or being limited by parent brand associations. On the other hand, this is the only structure where you totally lose out on all economies of scale and synergies."
  • "If the company brand, usually the company name, already has a high degree of recognition and a high reputation or a larger country of origin bonus, it makes sense to take full advantage of this value. There are usually two ways to do this: either a strict branded-house strategy or the house-of-brand strategy with strong support from the corporate brand. "
  • "A branded house strategy combines numerous, often very different products under the umbrella of a single, strong brand. All business units or brands share the same vision and values. While this requires closer cooperation between the company headquarters and the various business units, it also opens up the opportunity to strengthen customer loyalty, as it is likely that consumers will be attracted by the umbrella brand. "