Branding Strategies

Branding Strategies

Branding Strategies

With the passage of time, successful companies grow and the number of products handled by most companies also grows. These companies face the question as to what kind of branding relationships these products will have. The branding strategies that companies adopt reflect this relationship. There is no best branding strategy and the choice is not easy. Different companies adopt different strategies, and since there is no best strategy for all types of products, a company may adopt different branding strategies across its product mix.
Companies differ in their approaches to branding. A casual look at Western World and Eastern World shows that companies of the Western World generally adopt product branding strategies (one product one brand or many products many brands). At the top of this approach are three giant and familiar companies, P&G, HLL, and Xerox. Eastern companies, such as those from South Korea and Japan adopt a mega branding approach. The company tagline covers all products “Chips to Ships.” Examples are Hyundai, Samsung, LG, Hitachi, Mitsubishi, Toyota, etc. These two general approaches reflect customer or market-oriented logic, or cost-oriented logic.
Companies enlarge their product mix by either stretching existing product lines or adding new product lines, or both. In these situations they either use existing brand names or use new brand names, or some combination of company name and product brand name. The six branding strategies discussed here can be termed as generic branding strategies, each having its own set of pros and cons.

Branding Strategies

Product Branding Strategies

This approach is driven by customer-orientation. The thinking focuses on customer perception and information processing and the company believes the most effective method to differentiate its offer in a customer’s mind is to give the product an exclusive position and identity. What the brand represents is clearly comprehended and internalised by its target market. Placing several products under one brand name may cause confusion among consumers. Al Ries and Laura Ries say:
“A successful branding programme is based on the concept of singularity. It creates in the mind of the prospect the perception that there is no product on the market quite like your product.”
—Al Ries and Laura Ries, The 22 Immutable Laws of Branding, 1998
This strategy focuses on promoting the brand exclusively so that it reflects its own personality, identity, associations, and image. The brand does not take on company associations and any benefits from its name.
Procter & Gamble is an ardent follower of product branding strategy in its purest form as shown in. Hindustan Lever Ltd. also largely follows product brand strategy, but shows some shifts by leveraging established brand names into areas outside its product category. Actually, very few companies follow only product branding strategy. HLL has brands such as Dove, Lux, Rexona, Lifebuoy, Liril, Pears, etc. Dove moisturises skin, Lux is the toilet soap of film stars, Rexona is a gentle soap with natural oils, Lifebuoy fights germs, Liril is ‘the’ freshness soap, and Pears is the ‘original’ translucent glycerine soap. It is worth noting that both P&G and HLL use separate brand names for products that are in the same product category (Ariel and Tide are detergents; Lux and Liril are soaps).
Product branding approach is also followed by ITC for its tobacco-based products. At the product level, most cigarettes generally tend to be the same and what counts really is the perceived differentiation among consumer groups who show strong brand preference. This is more distinct in the upmarket segments. The basic product by itself does not offer much opportunity for differentiation. This differentiation has to be created in consumers’ perceptions of a brand. This is the major reason why ITC adopts the product differentiation approach for cigarettes. ITC’s brand portfolio of cigarettes includes India Kings, Classic, State Express, Benson & Hedges, Gold Flake Kings, Wills, Navy Cut, etc. Each brand is highly differentiated and occupies a distinct position. However, ITC seems to have diluted its product branding approach in case of its powerful Wills brand and has extended the brand into ready-to-wear clothes.

Line Branding Strategies

The term ‘line branding’ is altogether different than what product line refers to in the context of product mix. Companies often have several product lines in the product mix. For example, Gillette India has three product lines: personal care, oral care, and alkaline batteries. In line branding, products share a common concept. Line brands start with a single product conveying a concept and later the brand name extends to other complementary products. The core concept remains unchanged. For example, the core concept of Denim brand is, “The man who doesn’t have to try too hard.” All products sporting the Denim brand name share the same concept. Lakmé concept is “the source of radiant beauty.” The brand concept appeals to a distinct target group of consumers and Lakmé offers a number of additional products that go together, complement each other, and form a whole such as winter care lotion, cleansing lotion, body lotion, lipsticks, eye make up, and nail enamels. All products in line branding draw their identity from the main brand. Park Avenue is also an example of line branding with several products that complement each other addressing the upward mobile man.
Line branding strategy aims to satisfy customer’s complementary needs that surround the core need. The core customer need that Lakmé aims to fulfil is ‘need to be beautiful’ and all products surrounding this need complement each other. The brand takes care of total needs rather than just offering one or two fragmented items. The company focuses on promoting only the main brand concept that builds and reinforces all related items without incurring much additional expenditures. The company can also extend brand without much investment in promotion. The negative side is that success and ease sometimes tempts a company to over extend and weaken the brand.

Range Branding Strategies

This strategy seems to resemble line branding but is significantly different. It is also called brand extension. Product categories are different but brand name is the same, such as carrying the brand name Maggi is a range of different products: noodles, sauce, soup, Dosa mixes, etc. The range represents the area of expertise, which is fast food. In line branding, every product originates from the “product concept.” Lakmé concept is “the source of radiant beauty,” and all products surround this core product concept. Line branding is restrictive to brand expansion into products that do not surround this core product concept and complement each other in this regard. In case of range branding, it is not the product concept but “the area of expertise.” This strategy permits expanding into products that do not complement each other. For example, a company’s area of competence might be microprocessors and it can develop expertise in some other area over time such as software and expand its brand. Himalaya Drug Company has range of Ayurvedic home remedies like Health Care, Body Care, Skincare, Hair Care, etc., under Ayurvedic Concepts. Certainly, deep cleansing lotion does not complement digestive capsules, and antiseptic cream does not complement face wash. The focus is on expertise. Himalaya Drug Company’s area of expertise is ‘Ayurvedic medicines’ and it can use its expertise to expand the brand to products that do not complement each other. This means range branding covers many different products under one brand banner. Promotional expenditures are low because promoting one brand helps all products in the range. However, the same brand name for too many products may lead to overstretching, may confuse consumers and weaken the brand.

Umbrella Branding Strategies

In general, umbrella branding is favoured among Eastern World companies but is not exclusively confined only to this part of the world. Giants like GE and Philips are examples of non-Eastern companies that use umbrella branding. The approach is driven by economic considerations. The company name itself is the brand name for all products across diverse categories. Investment in building one brand proves far more economical than investing in building several brands. The brand transfers the advantages of brand awareness, its associations, and goodwill. Ever increasing number of brands, and information overload makes it a very difficult to get noticed. Consumers are more likely to take notice of something familiar.
Apparently, umbrella branding appears to be flawless, but it has several disadvantages. A major shortcoming with this approach is that it is not customer or market focussed. Cost advantage does not get translated into better margins. It is a low-cost strategy but earnings are also low. Research indicates that average profit of top Eastern companies adopting umbrella branding is much lower as compared to top Western firms.
Umbrella branding may be suitable when markets are viewed as homogeneous, operating at a higher level of aggregation. But when markets are composed of distinct segments in terms of buyer needs and preferences, companies start offering specialised need solutions to different segments. This precipitates a difficult situation for companies using umbrella branding. From the consumer’s point of view, a specialist brand is appealing and makes more sense. This is the reason that auto companies offer small and mid-sized cars such as Alto, Esteem, Santro, Getz, Palio, etc.
Sharing a common brand name can be risky in case there is a problem with one category. This may negatively influence consumer perceptions in other products sharing the same identity. Also, it is difficult to stretch brands upwards (as happened in case of Maruti Baleno). Downwards stretch in case of Parker failed because of Parker’s high-end image. Horizontal stretching is relatively less likely to pose too much of a threat.

Double Branding Strategies

This approach combines umbrella branding and product branding. Along with the product brand name, the company name is associated to create double branding, such as Tata Indica and, Bajaj Pulsar. Tata is the company behind Indica car brand. Maruti also follows this strategy. Both names are equally important and are given equal status in the brand’s communication. Double branding serves two objectives. The product gains from the company name awareness, expertise, and reputation. And Pulsar adds some unique value of its own: “Definitely male.” This is customer focus and the brand can communicate something in addition to what Bajaj name stands for in customers’ perceptions and appeal to a new segment. The product’s brand name helps differentiate the offer.
It is only the company’s area of expertise and image that may restrict how far it can go in using this branding approach. Double branding works as long as brands are consistent with expertise domain of the company. Beyond this domain, the brand may become a burden. Two or three-wheeler autos are categories that have greater consistency in the area of company’s expertise domain. But if the field of expertise is not consistent, such as trucks, or computers, double branding may not always be a suitable branding strategy.

Endorsement Branding Strategies

This is a minor variation of double branding strategy. The product brand name gains a dominant position, while the company name merits a lower profile. The company name appears in smaller letters and takes a back seat. The brand largely seeks to exist on its own. The company name is mentioned to identify who owns it just by way of endorsement to the product brand, such as Godrej Cinthol, or Nestlé Kit-Kat identify the owners of these brands.
In case of double branding, the company name is an integral part with equal status. Endorsement signifies assurance of quality by transferring certain associations that increase consumers’ trust. The aim is not to pass on the company’s expertise domain. Customers ask for Fair Glow, or Chocos and not Godrej’s Fair Glow, or Kellogg’s Chocos. Company name acts as a familiar signage to reassure consumers by communicating the company’s associations and image.
Endorsement branding is nearest to product branding, allowing more freedom to the brand to get its own distinction. When endorsement branding is tried in inconsistent areas, it is quite likely to fail. For example, some time back Nestlé launched Mithai Magic and it did not work.

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