Learn Strategic Brand Management
Brand Equity In Question
Strategic Implications Of Branding
Brand And Business Building
From Private Labels To Store Brands
Brand Diversity: The Types Of Brands
The New Rules Of Brand Management
Brand Identity And Positioning
Launching The Brand
The Challenge Of Growth In Mature Markets
Sustaining A Brand Long Term
Adapting To The Market: Identity And Change
Growth Through Brand Extensions
Handling Name Changes And Brand Transfers
Brand Turnaround And Rejuvenation
Managing Global Brands
Financial Valuation And Accounting For Brands
Let us now examine the individual characters of the principal brand architectures. We shall begin with those architectures that allow great freedom in terms of products and communication: the link between the company values and those of the divisions, activities and product is lax. They are brought together under the term ‘house of brands’. Then we examine strategies that are more restrictive downstream, since the latter should reflect central values, of which the brand is the concrete expression.
The product–brand strategy
It is widely known that a brand is at the same time a symbol, a word, an object and a concept: a symbol, since it has numerous facets and it incorporates figurative symbols such as logos, emblems, colours, forms, packaging and design; a word, because it is the brand name which serves as support for oral or written information on the product; an object, because the brand distinguishes each of the products from the other products or services; and finally, a concept in the sense that the brand, like any other symbol, imparts its own significance – in other words, its meaning.
The product–brand strategy involves the assignment of a particular name to one, and only one, product (or product line) as well as one exclusive positioning. The result of such a strategy is that each new product receives its own brand name that belongs only to it. Companies then have a brand portfolio that corresponds to their product portfolio as illustrated in Figure below.
The product–brand strategy
This brand strategy can be found in the hotel industry where the Accor Group has developed multiple brands for precise and exclusive positions: eg Sofitel, Novotel, Suit’ Hotel, Ibis, Formule 1 and Motel 6. The company Procter & Gamble has made this strategy the symbol of its brand management philosophy. The company is represented in the European detergent market by the brands Ariel, Vizir, Dash and in the soaps market by Camay, Zest, etc.
Each of these products has a precise, well-defined positioning and occupies a particular segment of the market: Camay is a seductive soap, Zest a soap for energy. Ariel positions itself as the best detergent in the market and Dash as the best value for money in the intermediate price range. Both have developed a product line including powder, liquid and tablets.
Innovative companies in the food sector create new speciality products which are then distinguished through individual names and therefore these companies have a large brand product portfolio.
The cheese company Bongrain markets more than 10 brands, such as St Moret, Caprice des Dieux and Chaumes. The mineral water market is composed of only product brands: one asks for Vittel, Evian or Contrex, knowing very well that there will be no ambiguity and one will get the product asked for. Here, the brand, the name of a product, becomes a strict indication of identity.
In an extreme case, the product is so specific that there is no equivalent, and the product is not only a product, but an entire product category of which it is the sole representative. This phenomenon has been described by some through the neologism ‘branduct’ (Swiners, 1979), an abbreviation of brand product. These products are so unique, so specific that they have no other name than their brand name. We see this in ‘Post-it’, Bailey’s Irish Cream, Malibu liqueur, Mars, Bounty, Nuts, etc.
How is the strict relationship between one name, one product and one positioning maintained over a period of time? First, the only way to achieve brand extension is by renewing the product. To keep the product at its height and original positioning, the Ariel formula has often been improved since it was launched in 1969.
Ariel receives the best technological and chemical inputs from Procter & Gamble (like its competitor, Skip, from Lever) (Kapferer and Thoenig, 1989). Often, to emphasise an important improvement to the product, the company adds a number after the brand name (Dash 1, Dash 2, Dash 3). To keep up with changing consumer habits, the brand name is applied to various formats (for example, in packaging: packets, drums, in powder or liquid form).
What, then, are the advantages of the product brand strategy for companies? For firms focusing on one market, it is an offensive strategy designed to occupy the whole market. By indulging in the practice of multiple brand entries in the same market (Procter & Gamble has four detergent brands), the company occupies many segments with different needs and expectations and therefore has a greater consolidated share of the market: it becomes category leader. However, this remains inconspicuous, for the corporate name is kept discreet if not hidden.
Some companies do wish to remain at the back and focus the lights exclusively on their brands. The cases of Procter & Gamble, Unilever, Masterfoods and Bestfoods are well known, that of ITW is less so. ITW stands for Illinois Toolwork. It is a billion-US-dollar corporation, very acquisitive: it owns more than 500 companies throughout the world. Its brands aim at the construction professional: they are called Paslode, Duo-Fast for wood products, Spit and Buidex for steel and concrete.
The goal is to provide very specialised tools to specialised workers: a policy of niche brands, addressing segmented needs, craftspeople and channels is a direct consequence of this goal. People working with wood want to be reinforced and differentiated from people working with other materials. ITW does not wish to hurt this desire, and AS resisted all temptations to grow the ITW brand itself, for instance as an endorser. ITW’s success rests precisely on the exact contrary.
When the segments are closely related, choosing one name per product helps customers to perceive better the differences between the various brands. This may also be necessary when the products resemble each other externally. Thus, one sees that although all detergents are composed of the same basic ingredients, the proportion of these may vary according to the factor that is being optimised: stain removal properties, care for synthetic materials, colourfast control or suitability for hand washing. The association of a specific name for a type of need underlines the physical difference between the products.
The product brand strategy is one that is adapted to the needs of innovative companies who want to pre-empt a positioning. In fact, the first brand to appear in a new segment, if it proves to be effective, has the advantage of the first player in the market. It becomes the nominal reference for the thus innovative product and maybe even the absolute reference. The brand name patents the innovation. This is particularly important in markets where the success is likely to induce copying.
In the pharmaceutical world where copies are a certainty, every new product is registered under two names: one for the product, the formula, and another for the brand. Even if they have the same formula, future copies appear different because the originality of the brand name (Zantac, Tagamet) provides an aura of exclusivity and of legal protection. On the other hand, where the law cannot provide protection, forgeries and copies attempt to exploit the potential of the brand name by imitating it as closely as possible.
That is why large mass retailers often use product brands or, to be more precise, counter–product brands. Thus, Fortini copies Martini, Whip copies Skip, etc. Scared of having their other brands cast out of favour manufacturers have, until now, hesitated to legally challenge the distributors for forgery or illegal imitation.
Product brand policies allow firms to take risks in new markets. At a time when the future of the liquid detergent was still uncertain, Procter & Gamble preferred to launch a product brand: Vizir. Launching it under the name Ariel liquid would have threatened Ariel’s brand image asset and launching it under the name Dash would have incurred the risk of associating a potentially powerful concept with a weak brand and thereby overshadowing it. Coca-Cola did just the same when it first launched Tab to test the diet market.
Product brand policy implies that the name of the company behind it remains unknown to the public and is therefore different from the brand names. This practice allows the firm considerable freedom to move whenever and wherever it wishes, especially into new markets.
Procter & Gamble moved from the creation of the soap, Ivory, in 1882, to the culinary aid, Crisco, in 1911, Chipso in 1926 and the machine detergent, Dreft, in 1933, Tide in 1946, Joy, the dishwashing agent in 1950 and then Dash in 1955, the toothpaste, Crest, in 1955, the peanut-butter, Jif, in 1956, Pampers in 1961, the coffee, Folgers, in 1963, the antiseptic mouthwash, Scope, as well as household paper rolls, Bounce, in 1965, Pringle chips in 1968, sanitary napkins, Rely, in 1974, Always (Whisper) and Sunny Delight later on.
Since each brand is independent of the others, the failure of one of them has no risk of negative spillover on the others, or on the company name (in cases where the company name remains relatively unknown to the public and different from that of any of the brands).
Finally, the distribution parameter also favours this strategy heavily: the shelf space accorded by a retailer to a company depends on the number of (strong) brands that it has. When a brand covers many products, the retailer stocks certain products and not others. In the case of product brands, there is only one product per brand, or one product line per brand.
The drawbacks arising from product brands are essentially economic. Thus multi-brand strategy is not for the faint-hearted.
In fact, a new product launch is often a new brand launch. Considering today’s media costs, this involves considerable investments in advertising and promotions. Furthermore, retailers, unwilling to take risks with new products whose future is uncertain, stock them only when reassured by heavy listing fees.
Multiplication of product brands in a market due to the increasingly narrow segmentation weighs heavily on the chances of a rapid return on investment. The volumes required to justify such investment (in R&D, equipment, and sales and marketing expenses) make the product brand strategy an ideal one for growing markets where a small market share could nevertheless mean high volumes.
When the market is saturated, this possibility disappears. On the other hand, in a stable market it is sometimes more advantageous to nurture an existing brand with the innovation in question rather than attempt to give it product brand status by launching it under its own name.
The role of fire curtains between product brands is certainly important in times of crises, but in other times it prevents the brand from benefiting from the positive spillover effect created by other products under the same name. The success of brand A will not help other products because their names, B, C, D, etc are different and do not bear any relation to A.
As we can see, in this strategy, the firm gives the brand a completely distinct and exclusive function and almost no hints about its origin. New products do not benefit from the renown of one of the already existing brands nor from the economies that one could derive from it. On the other hand, this advantage has no role among distributors who are well aware of the company name behind the brand and its reputation for success or failure.
The case of ‘branducts’ is even more marked. Since they represent an entire category of products on their own, they have to invest twice as much in advertising. While a brand of whisky only has to associate itself with the whisky category for the customer to recall the brand when he wants to buy a whisky, other products such as Sheridan, Malibu or Bailey’s cannot fall back on the cushion of a product category.
They therefore need a permanent spontaneous awareness: either one thinks of Bailey’s or one does not (in which case the probability of a sale is zero). Furthermore, isolated due to the lack of a category shelf, branducts suffer from a lack of prominence and visibility on the shelves. This makes their fame their only strong point. In times of recession, they are the first to undergo budget reductions.
The line brand strategy
Deglaude Laboratories launched a product brand, Foltene: a single product associated with a single benefit, the regrowth of hair. A strong TV advertising campaign made the market explode and Foltene became the leader with a single product and a 55 per cent market share. They should have remained thus, but consumer logic prevailed.
Bald people were not looking for a single product. They wanted an all-encompassing service, a total care routine. They wrote asking that shampooing be combined with the Foltene treatment. In 1982 Deglaude launched a mild shampoo (which was later subdivided according to hair type) followed by a daily-use lotion. All this was by way of response to customer demands.
Christian Dior launched Capture, an antiageing liposome complex for the skin. Following its success, a first spin-off was soon launched: ‘Capture, eye shaper’, followed by lip shapers and then other products for the body. The Capture line was born.
Thus, to take up Botton and Cegarra’s definition (1990), the line responds to the concern of offering one coherent response under a single name by proposing many complementary products. This goes from variations of the offer, as in the case of Capture or with the fragrances of an aftershave, to the inclusion of various products within one specific effect, as in the case of Foltene.
This is also the case with Studio Line hair products from l’Oréal, which offers structuring gel, lacquer, a spray, etc. Calgon (a Benckiser brand) markets a dishwasher powder together with a rinsing agent and limescale inhibitor. That these products are completely different for the producer makes no difference to the consumer, who perceives them as related.
It should be clear that the line involves the exploitation of a successful concept by extending it but by staying very close to the initial product (eg Capture liposomes or the Foltene principle). In other cases, the line is launched as a complete ensemble, with many complementary products linked by a single central concept (for Studio it was allowing youngsters to do their own hair and give themselves a ‘look’).
The eventual extension of the line will involve only the marginal costs linked to retailers’ discounts and to the packaging. It does not need advertising. It should be compared to the marginal number of consumers that could be won. As one can see, the line brand strategy offers multiple advantages:
The disadvantages of the line strategy lie in the tendency to forget that a line has limits. One should only include product innovations that are very closely linked to the existing ones. On the other hand, the inclusion of a powerful innovation could slow its development.
Thus, even though Capture was the result of seven years’ research in collaboration with the Pasteur Institute, received three patents and brought with it a revolutionary anti-ageing principle, Dior decided to attach it to a currently existing anti-ageing line. This did not prevent the success of Capture, but unnecessarily delayed it initially.
The range brand strategy
Campbell’s Soup, Knorr, Bird’s Eye and Igloo all propose more than 100 frozen food products. But not all range brands are this extensive. The Tylenol range now covers a number of different products. Range brands bestow a single brand name and promote through a single promise a range of products belonging to the same area of competence.
In range brand architecture, products guard their common name (fish à la provençale, mushroom pizza, pancakes with ham and cheese in the case of Bird’s Eye). In the Clarins cosmetic range, products are named ‘purifying plant mask’, extracts of ‘fresh cells’, multi-tensor toning solution, day or night soothing cream, etc.
Range brand structure is found in the food sector (Green Giant, Campbell, Heinz, Whiskas and so on), equipment (Moulinex, Seb, Rowenta, Samsonite) or in industry (Steelcase, Facom). These brands combine all their products through a unique principle, a brand concept, as is shown in Figure below.
Range brand formation
The advantages and disadvantages of the structure are as follows:
Among the problems that are most frequently encountered is one of brand opacity as it expands. The brand name Findus covers scores of savoury frozen products. It is a good brand – high quality, modern, a specialist in frozen products and a generalist as well because it makes all kinds of dishes.
For years, product names were the names of the recipes. But these names are banal. Any brand can claim that it has the same recipe. To enrich the brand and to express its personality on one hand, and on the other hand to help the consumer choose from the mass of products that are on offer, an intermediate level of categorization must be created between the brand name and each actual product name. This is the role of specific lines such as:
Such names for a line throw light on the products and also help to structure the range in the same way as retailers organise their shelves. The criteria for segmentation and for the creation of families of products depend on the brand. Thus, should we make the distinctions according to the content (poultry, beef, pork etc, as in a butcher’s shop) or according to consumer benefits (light, traditional, exotic, family orientated ...)?
The line structures the offer, by putting together products which are undoubtedly heterogeneous, but all of which have the same function. Thus, in the Clarins cosmetic range brand, the offer is also made more clear and structured by way of lines. To assist the consumer in deciphering the scientific terms used on the products, the brand proposes lines as one would a prescription. For example:
The Clarins offer ceases to be a long list of creams, serums, lotions, balms and gels and now forms structured and coherent groups as seen in Figure below.
Range brand structured in lines
The maker’s mark strategy
For many years the Bel logo has been systematically marked on the packaging of cheeses produced by this company: Laughing Cow, Kiri, Port Salut, Mini Babybel, Sylphide and other brands. But what does Bel mean? Nothing else was done to explain the brand. It was the maker’s mark, the maker’s seal, a proto-brand in the sense that it did not seek to build itself a territory of meaning, of emotion. The Bel company added its seal to authenticate the product and guarantee its provenance.
The function of this maker’s seal was to create a recognition sign identifying the industrial group that made it. Consumers are not worried about this, but this sign is aimed essentially at distributors and department heads. It is also important internally, for all the international cheese-making companies acquired, who see in the application of this seal to their products, the sign of their full integration into the Bel family.
In formal terms, in relation to the previous architecture where the corporate brand is completely absent, this strategy is characterized by a discreet corporate logo, giving preeminence to the commercial brand. In a certain way, the presence of 3M on all its mass-market products must be a mystery in the eyes of its consumers, if they notice it at all. From this point of view, the architecture is close to that of the ‘maker’s mark’. In the United States, where 3M is better known, the application of the 3M logo plays more of an endorsing role.
Endorsing brand strategy
Everyone recognises famous car brands such as Pontiac, Buick and Chevrolet in the United States or Opel in Europe. Next to their logos and to the signs of the dealers of these brands we always see the two letters: GM. It is obviously General Motors, the endorsing brand. Again, what is the link between the cleaner Pledge, Wizard Air Freshener and Toilet Duck? They are all Johnson products.
The endorsing brand gives its approval to a wide diversity of products grouped under product brands, line brands or range brands. Johnson is the guarantor of their high quality and security. This having been said, each product is then free to manifest its originality: that is what gives rise to the different names seen in the range.
Figure below symbolises endorsing brand strategy. As one can see, the endorsing brand is placed lower down because it acts as a base guarantor. Furthermore what the consumers buy is Pontiac or Opel: they drive choice. General Motors and Johnson are supports and assume a secondary position.
Endorsing brand strategy
The brand endorsement can be indicated in a graphic manner by placing the emblem of the endorser next to the brand name or (when signed above, it acts as maker’s mark) by simply signing the endorser’s name. The advantage of the endorsing brand is the greater freedom of movement that it allows. Unlike the source brand, the endorsing brand profits less from its products. Each particular product name evokes a forceful image and has a power of recall for the consumer. There is little image transfer to the endorser.
The endorsing brand strategy is one of the least expensive ways of giving substance to a company name and allowing it to achieve a minimal brand status. Thus, we can see the initials ICI (Imperial Chemical Industries) on Valentine or Dulux paint pots, the name Bayer on packets of garden products and Monsanto on Round Up.
The high quality of these brands is guaranteed by the names of these major organisations. On the other hand, through their presence in everyday life these companies become more familiar and close to the people, as in the case of ICI in Europe. Since the scientific and technical guarantees are assured by the endorsing brand, product brands can devote more time to expressing other facets of their personality.
Therefore, as one can see, there is a division of roles at each stage of the branding hierarchy. The endorsing brand becomes responsible for the guarantee that is essential for all brands and, today, these guarantees not only cover areas such as quality and scientific expertise, but also civic responsibility, ethics and environmental concerns. The other brand functions are assumed by the specifically named brands: distinction, personalisation and even pleasure (Kapferer and Laurent, 1992).
Umbrella brand strategies
Under the term ‘umbrella brand’, we find in fact two modes of implementation in companies, the first relatively liberal towards products and subsidiaries, the other exercising real control. We shall examine both in turn: the first is in reality a house of brands, the other a branded house.
Umbrella brand strategy
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