Corporate brands and product brands

For years, companies have hidden behind their brands. Through prudence and fear of being affected in case of brand failure, company names have been separate from those of the brands. Thus Procter & Gamble remain unknown to the public while their brands are the stars (Ariel, Pampers). In fact, it is this that allowed the company to keep its turnover stable when the rumour of it being linked to a sect raged through the United States.

Thebrands, autonomous from the company itself, suffered no setback. Nevertheless, such instances are rare and the tendency is more towards transparency due to communication obligations. Also, the public wants to know, in larger numbers than before, who are the actors behind the brands. Journalists want to disclose who is the ‘brand behind the brand’. This also explains why so many companies have taken on the names of their most famous brands (eg Alcatel-Alsthom, Danone).

They get more visibility and acknowledgement. This helps the stock exchange investor also, in cases where he is not an expert or very well-informed, to understand better what he is buying. It may also create a beneficial confusion for the brand itself. After it bought Audi, Seat and Skoda,Volkswagen Group is now co-leader in Europe on a cumulative basis. However, many people mistakenly speak of Volkswagen as a brand being the number one in Europe.

The trend towards greater visibility of corporate names also has other causes. Distribution is one of them. Distributors, multiple retailers and hypermarket chains are not very interested in brands. Their fundamental relationship is with corporations, not with brands. It is a business to business relationship. The name of the powerful corporation is therefore a potent reminder of that relationship.

Only corporate names can endow brands with stature, an extra dimension calling for respect. Would Audi have succeeded in its remarkable recovery had it not been known that Audi belonged to the Volkswagen Group? The same holds true for Seat and Skoda. Nissan’s status will change because it is now part of the Renault group. As long as car makes are only brands and not part of a larger and more dynamic corporation, they arouse perceived risk among consumers and do not guarantee a long-term presence.

Many companies sell in industrial and commercial markets at the same time. Here, there is the problem of having to choose between the use of product brands or the use of the corporate reputation to support the products. This depends on the quality of the company’s endorsement and the degree of visibility that it wants to acquire. In practice, the respective weight to be attributed to the product brand and the corporate brand depends on a case-by-case analysis of the returns brought by each of them on the many targets concerned. Table below presents the outline of such an analysis.

Shared roles of the corporate and product brand

At ICI three kinds of brand policy were used (see Figure below):

Corporate and product branding at ICI

  • The first policy is the classic umbrella brand where the products keep their generic names and are signed with the corporate name. Most often this concerns raw materials and undifferentiated products where the company guarantees a certain quality and the differentiation is essentially commercial (ie special conditions offered to the client on a case-by-case basis). An example would be ICI polyurethanes.
  • The second policy is that of the endorsing brand. The company puts its name beside the product brand and this confers a status of high technology and reliability to the product. Thus, Dulux paints are accompanied by the ICI logo.
  • The third policy makes exclusive use of the product brand. Tactel is one of the most widely sold fibres but it never mentions ICI.

The product is sold to the textile industry and to the fashion world, and it is feared that the mention of the ICI name may alter the positive images linked to Tactel. Similarly the insecticide, Karate, which is sold throughout the world, also does not make any mention of ICI. Does this have anything to do with not wanting to step on ecological toes and avoid the possibility of blame regarding the harmful effects of pesticides on ground water? This situation is not only changing through time, but it also changes according to the company.

Decis, the world leader in pesticides, makes a reference to Roussel Uclaf (Agrevo division) on its packaging. Similarly, to benefit from its innovations, Du Pont de Nemours mentioned clearly ‘Lycra by Du Pont’ on all its communications for Lycra, the fabric that has revolutionised women’s lingerie.

Product innovations generally provide an ideal occasion to ask fundamental questions about the branding policy. How to name these innovations? Let us suppose that the Lafarge Roofing Division decides to launch a radical innovation in roof maintenance and rebuilding, associated with a guarantee for 10 years or more: an ‘all in one approach’, service oriented instead of technology oriented. How should it be called? Would a name like Lafarge Roofing Total Solution be better than a new specific international name for that innovation?

It is surely an occasion to demonstrate the ability of the group to deliver more than cement, its core symbolic product and star (which in this sense means offering high growth and high profitability). However, roofing is a high involvement decision, with both a high perceived risk and dimensions of emotion.

It may be hard for the corporation ego to recognise it, but would a Lafarge name be able to evoke the sufficient emotion needed in all real brands within a realistic timespan? Wouldn’t it be better to use it as a guarantee, and let a specific good commercial name foster the benefits, tangible and intangible, of this total solution, against the small local companies with which it will be competing?

Strategic Brand Management Related Practice Tests

Strategic Management Practice Tests
Brand Equity In Question What Is A Brand? Differentiating Between Brandassets, Strength And Value Tracking Brand Equity Goodwill: The Convergence Of Finance And Marketing How Brands Create Value For The Customer How Brands Create Value For The Company Corporate Reputation And The Corporate Brand Strategic Implications Of Branding What Does Branding Really Mean? Permanently Nurturing The Difference Brands Act As A Genetic Programme Respect The Brand ‘contract’ The Product And The Brand Each Brand Needs A Flagship Product Advertising Products Through The Brand Prism Brands And Other Signs Of Quality Obstacles To The Implications Of Branding Brand And Business Building Are Brands For All Companies? Building A Market Leader Without Advertising Brand Building: From Product To Values, And Vice Versa Are Leading Brands The Best Products Or The Best Value? Understanding The Value Curve Of The Target Breaking The Rule And Acting Fast Comparing Brand And Business Models: Cola Drinks From Private Labels To Store Brands Evolution Of The Distributor’s Brand Are They Brands Like The Others? Why Have Distributor's Brands? The Financial Equation Of The Distributor’s Brand The Three Stages Of The Distributor’s Brand The Case Of Decathlon Factors In The Success Of Distributor's Brands Optimising The Dob Marketing Mix The Real Brand Issue For Distributors Competing Against Distributor's Brands Facing The Low-cost Revolution Should Manufacturers Produce Goods For Dob's? Brand Diversity: The Types Of Brands Luxury, Brand And Griffe Service Brands Brand And Nature: Fresh Produce Pharmaceutical Brands The Business-to-business Brand The Internet Brand Country Brands Thinking Of Towns As Brands Universities And Business Schools Are Brands Thinking Of Celebrities As Brands The New Rules Of Brand Management The Limits Of A Certain Type Of Marketing About Brand Equity The New Brand Realities We Have Entered The B To B To C Phase Brand Or Business Model Power? Building The Brand In Reverse? The Power Of Passions Beginning With The Strong 360° Experience Beginning With The Shop The Company Must Be More Human, More Open Experimenting For More Efficiency The Enlarged Scope Of Brand Management Licensing: A Strategic Lever How Co-branding Grows The Business Brand Identity And Positioning Brand Identity: A Necessary Concept Identity And Positioning Why Brands Need Identity And Positioning The Six Facets Of Brand Identity Sources Of Identity: Brand Dna Brand Essence Launching The Brand Launching A Brand And Launching A Product Are Not The Same Defining The Brand’s Platform The Process Of Brand Positioning Determining The Flagship Product Brand Campaign Or Product Campaign? Brand Language And Territory Of Communication Choosing A Name For A Strong Brand Making Creative 360° Communications Work For The Brand Building Brand Foundations Through Opinion Leaders And Communities The Challenge Of Growth In Mature Markets Growth Through Existing Customers Line Extensions: Necessity And Limits Growth Through Innovation Disrupting Markets Through Value Innovation Managing Fragmented Markets Growth Through Cross-selling Between Brands Growth Through Internationalisation Sustaining A Brand Long Term Is There A Brand Life Cycle? Nurturing A Perceived Difference Investing In Communication No One Is Free From Price Comparisons Branding Is An Art At Retail Creating Entry Barriers Defending Against Brand Counterfeiting Brand Equity Versus Customer Equity: One Needs The Other Sustaining Proximity With Influencers Should All Brands Follow Their Customers? Reinventing The Brand: Salomon Adapting To The Market: Identity And Change Bigger Or Better Brands? From Reassurance To Stimulation Consistency Is Not Mere Repetition Brand And Products: Integration And Differentiation Specialist Brands And Generalist Brands Building The Brand Through Coherence Defining The Core Identity Of The Brand Confirming The Presence Of Brand Core Facets In Each Product Identifying The Role Of Each Product Line In The Construction Of The Brand Graphically Representing The Overall System Of The Brand Checking The Coherence Worldwide The Three Layers Of A Brand: Kernel, Codes And Promises Respecting The Brand Dna Managing Two Levels Of Branding Growth Through Brand Extensions What Is New About Brand Extensions? Brand Or Line Extensions? The Limits Of The Classical Conception Of A Brand Why Are Brand Extensions Necessary? Building The Brand Through Systematic Extensions: Nivea Extending The Brand To Internationalize It Identifying Potential Extensions The Economics Of Brand Extension What Research Tells Us About Brand Extensions Avoiding The Risk Of Dilution Balancing Identity And Adaptation To The Extension Market Segments Assessing What Should Not Change: The Brand Kernel Preparing The Brand For Remote Extensions Keys To Successful Brand Extensions Is The Market Really Attractive? An Extension-based Business Model: Virgin How Execution Kills A Good Idea: Easycar Brand Architecture The Key Questions Of Brand Architecture Type And Role Of Brands The Main Types Of Brand Architecture The Flexible Umbrella Brand The Aligning Umbrella Brand (masterbrand) Choosing The Appropriate Branding Strategy New Trends In Branding Strategies Internationalising The Architecture Of The Brand Some Classic Dysfunctions What Name For New Products? Group And Corporate Brands Corporate brands and product brands Multi-brand Portfolios Inherited Complex Portfolios From Single To Multiple Brands: Michelin The Benefits Of Multiple Entries Linking The Portfolio To Segmentation Global Portfolio Strategy The Case Of Industrial Brand Portfolios Linking The Brand Portfolio To The Corporate Strategy Key Rules To Manage A Multibrand Portfolio The Growing Role Of Design In Portfolio Management Does The Corporate Organization Match The Brand Portfolio? Auditing The Portfolio Strategically A Local And Global Portfolio – Nestlé Handling Name Changes And Brand Transfers Brand Transfers Are More Than A Name Change Reasons For Brand Transfers The Challenge Of Brand Transfers When One Should Not Switch Analysing Best Practices Transferring A Service Brand How Soon After An Acquisition Should Transfer Take Place? Managing Resistance To Change Factors Of Successful Brand Transfers Brand Turnaround And Rejuvenation The Decay Of Brand Equity The Factors Of Decline Distribution Factors When The Brand Becomes Generic Preventing The Brand From Ageing Rejuvenating A Brand Growing Older But Not Ageing Managing Global Brands The Latest On Globalisation Patterns Of Brand Globalisation Why Globalise? The Benefits Of A Global Image Conditions Favouring Global Brands The Excess Of Globalisation Barriers To Globalisation Coping With Local Diversity Building The Brand In Emerging Countries Naming Problems Achieving The Delicate Local–global Balance Being Perceived As Local: The New Ideal Of Global Brands? Local Brands Can Strike Back The Process Of Brand Globalisation Globalising Communications: Processes And Problems Making Local Brands Converge Financial Valuation And Accounting For Brands Accounting For Brands: The Debate What Is Financial Brand Equity? Evaluating Brand Valuation Methods Brand Valuation In Practice The Evaluation Of Complex Cases What About The Brand Values Published Annually In The Press? Strategic Brand Management Interview Questions