A house of brands? Or a branded house?
A few years ago automaker Acura made a major shift in their brand architecture. Though they had built their market share and a large base of loyal customers with respected car model brands such as the Legend, Integra and Vigor, they believed that the Acura brand itself was losing power as a result. So they changed to a style of branding seen in BMW and Mercedes, where numbers and letters were the descriptors for their models. Exit the Legend; enter the Acura TL. By abstracting the model names, they focused attention on the company brand name exclusively.
Procter and Gamble, by contrast, distances its parent brand and wrangles a herd of product brands that focus on market categories and sub-segments as with Tide, Cheer and ERA, or Pampers, Luvs, and Charmin.
Subhead: What’s The Best Strategy For Your Company?
There is no single formula, but key factors are the competitive marketplace, the range of your target audience(s), and your company’s ability to support a multiple brand approach. The beer industry is a good example. Anheuser-Busch has a dominant product brand, Budweiser (and spin-offs Bud Light, Bud Dry, Bud Ice) but also markets a super premium beer, Michelob (7 varieties), and a number of value brands including Busch and Natural Light. The brand strategies for each product and its related lights, drys, etc. are specific and different. And here’s a huge factor: A-B has the money to support each brand with sufficient advertising and promotion dollars and resources.
By comparison, brewer Sam Adams markets 21 different beers, but all carry the Samuel Adams brand prominently. This beer company, though successful, has nowhere near the marketing clout of the industry gorilla, A-B. So they focus their brand building on the parent brand and promote the individual beers, such as Seasonals and the Brewmaster Collection at point of purchase or with smaller regional campaigns.
Sam Adams is a textbook example for smaller national or regional brands. If you can dominate your entire marketplace, product brands can be a successful strategy, otherwise, focus on your company brand to carry the message and keep your product brands closely identified with the mothership.