Today on Branding Strategy Insider, we're taking another question from the BSI Emailbag. Manuel, a student of marketing in Frankfurt, Germany asks…
“I’m studying market research and we recently discussed brand strategies. The topic was why companies like Procter & Gamble and Unilever are moving from managing and marketing their brands separately to leading with their company brand.”
Thanks for your question Manuel. You may have heard the term, "House of brands versus branded house." Nowadays, most organizations have chosen the brand architecture strategy, branded house. That is, they have a corporate, parent or umbrella brand. If this is the only brand that they use on all of their products and services, they are pursuing a master brand strategy. If they also have other brands, those other brands are typically sub-brands of the parent brand or endorsed by the parent brand. But, in almost all cases for branded houses, their products and services feature the corporate, parent or umbrella brand, even if other sub-brand and product names are also used.
As you point out, the classic consumer product companies such as Unilever, P&G or Kraft historically were houses of brands in which each brand was managed and marketed separately. And the corporate brand was not featured on the products themselves. Why would these companies move to a strategy like Virgin's in which they are putting the corporate name on more of their products? For a few reasons: (a) credit can begin to go back to the corporate or parent brand from each product category in which the company operates, (b) the corporate or parent brand can convey quality and other assurances for the individual product brands and, perhaps most importantly, (c) in the long-run, some of the currently individual brands could be more easily converted to the parent or corporate brand, saving the company significant money in brand building campaigns.
We hope this was helpful Manuel. Here's more on branded house and house of brands strategy.
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