Should a firm organise all its market offerings under the common umbrella brand name (for instance, Tata) or should it maintain a portfolio of independent brands (Fanta, Sprite, Kinley, etc. by Coca Cola)? What is the right approach? The truth is somewhere in between and the classical answer is ‘it depends’. The brand must add value to the marketing effort and if it does, it makes sense to use an umbrella brand. The brand ‘Dove’, when it appears on a bottle of body lotion or shampoo, communicates certain ideas about the product. The name ‘Johnson & Johnson’, when it appears on a bottle of baby oil or a pack of ear buds, carries positive associations and the customer is prepared to pay a premium for it. These are cases where the umbrella brand has added value. There is a leveraging effect of the brand; a premium for the product obtained and brand is strengthened. But this need not be the case always.
If the brand is diluted as a result of the product association, or the brand has specific meanings that do not rhyme well with the product category, umbrella branding is not good strategy. A ‘Harpic’ chocolate or ‘Dettol’ ice cream may never be attempted.
Brands are not just labels to discriminate product offerings in the market. May be this was the beginning of branding — brands as identifiers. But today, brands represent the intangible value that is created by the firm through the marketing effort. Brands like Ray-Ban or Raymond add a certain intangible value to the underlying product. Many customers may not recognise sunglasses as Ray-Ban by appearance and suiting as Raymond by touch. But when the brand identifier is there (a logo or a name or other insignia), the customers have a higher recall, they have an associated vivid imagery, an assurance of consistent quality. This results in preference for the brand and willingness to pay a premium.
Since brands are expensive to create and maintain, it makes sense for a firm to leverage the strength of an already established brand across product categories. Most firms maintain portfolio of product variants and brands. Managing several independent brands as separate entities without cannibalising each other is not easy. The media is fragmented; managerial bandwidth available is a constraint. The focus a brand needs from the marketing and sales organisation may not be easy to provide. Many firms can find the challenge of managing multiple brands intimidating. Therefore, the trend towards umbrella brands is inescapable and has many advantages — economies of scale, ease of management, and higher customer recall due to higher available budget. The challenge is how to organise many offerings, sometimes cutting across product categories, into a common consistent architecture (brand architecture). This is where umbrella brands and sub-brands help. The umbrella brand could be the corporate brand under which there are multiple sub-brands (Mahindra, Ford, Apple iPad and iPad Mini). Maruti Suzuki balances many close variants like A-Star, Alto, Estilo in a narrow price range targeted at very similar demographic profiles.
Umbrella brands could be independent of corporate name. For example, Lifebuoy, Close up or Dove — these are not corporate brands but powerful brands that straddle across product variants and categories.
How can a firm manage a portfolio of brands? The decision must be based on two criteria: 1) What are the brand meanings? 2) How do these brand meanings fit with the product offerings?
It means, there is a synergy between the brand and the product. A brand can have a specific imagery that is bound to a product category or a benefit. Such narrow meanings restrict the extensibility and usefulness to serve as an umbrella brand. So, Dettol might make a good umbrella brand for anti-septic products, health soaps, but never for ice creams. The perceived fit and synergy is not there because of the specific imagery customers have about the brand. Umbrella brands tend to be defined and managed at a broader level with more abstract meanings and symbolism. Such meanings make the transferability across categories easy to navigate.
Anandakuttan B Unnithan
professor-marketing, IIM Kozhikode
