One of the questions that many companies grapple with is which level of branding they should use. The main choices are:
- Corporate branding (sometimes referred to as Umbrella or monolithic branding)
- Product branding
- House branding (sometimes referred to as Endorsement branding)
Procter and Gamble made product branding, where each individual product has its own brand name and resources,
famous, with products such as Tide washing powder. With this strategy, the company name is either totally
or virtually absent. It gives each brand the opportunity to have unique values, personality, identity and
positioning. As a consequence, this approach implies that every new product the company brings on to the
market is a new brand, and can be positioned precisely for a specific market segment.
P and G have always taken the view that unless a product cannot stand on its own, then it does not deserve to get
launched. Product branding makes it easier for the company to evaluate brand performance and worth, and makes
for better resource allocation decisions. Moreover, if the product is a flop, or is involved in a marketing
disaster, the bad news does not attach itself to the company name. Product branding is costly though, as
advertising and promotion costs cannot be shared, and its success depends on the product itself having a
sustainable competitive advantage and clear positioning in the marketplace.
Product branding can lead into product line branding if the product takes on line extensions, as is the
case with Future Tide, another example being the Follow Me line of hair shampoos. It can also go further
to product range branding, where a number of products or services in a broad category are grouped together
under one brand name and promoted with one basic identity. An example here would be Intel's Pentium and
Celeron ranges of microprocessors. Whilst generating some economies of scale in advertising and promotion,
care must be taken to ensure that the extensions do not step away from the central proposition of the main
product brand, and that they do not cannibalise its sales.
Corporate branding is where the corporate name is the brand, and here the products tend to be described
more in alpha numeric or letter terms, and not have distinctive brand names. Such is the case with BMW.
Corporate branding gives each product the strength of the corporate brand values and positioning, and saves a
great deal on advertising and promotional spend. It builds up the strength of the corporate brand and its
financial value. Corporate branding is very appropriate to those companies engaged in service industries,
as their products are more intangible in nature. When consumers cannot see the product, the company brand
name helps give them an assurance of quality, heritage, and authenticity. Many Asian companies have taken
this route because the commitment and longevity of the company are judged to be of great importance in their
countries.
One of the great proponents of corporate branding has been Sony Corporation. The late founder and
chairman of Sony Akio Morita was quoted as saying, “...I have always believed that the company name is the life
of an enterprise. It carries responsibility and guarantees the quality of the product...”.
House or endorsement branding uses both ideas, and the corporate name is placed alongside the product
brand name, as is the case with Nestle's Milo. This allows the product brand to assume its own identity
and positioning, but draw strength from the values of the corporate brand, and give consumers the assurance,
in many cases related to quality, of the corporate brand. There are a variety of ways in which this can be
achieved, with the corporate brand in lesser or greater prominence. House branding also gives some economies
of scale in A and P, and helps with the introduction of new products, where it can be very difficult to break into
mature markets without the endorsement of a strong and credible corporate parental brand name. One possible
disadvantage is where the product is not favourably received and causes damage to the parental brand name.
The three methods described above are not discrete. They are actually part of a continuum that can be made
use of in the branding process. The unmistakable trend, however, is towards the corporate brand end of the
continuum, where with every communication the company gets double messages across, and leverages on the
value of both corporate and product brand names. |