Umbrella brand, its specificity
Have you ever heard of an umbrella brand? the process of simultaneously unwinding a group of products under one brand. Let's talk about the pros and cons of this phenomenon. What is it all for?
In the form of an umbrella brand, well-known names of manufacturers, who decide to launch new products in parallel, often come out.
The main advantage of this approach is the low cost of introducing new products and ease of distribution. Many companies, using an umbrella brand, are engaged in the release of goods that are not central to their sales system. This is done for a reason, and for the additional maintenance of the main brand. For example, they often use such a move: they produce crackers with the same name as beer. On the other hand, by combining several different products under one brand, the manufacturer reduces their visibility by people. And with a negative attitude of the consumer to one of the goods, trust in the entire brand as a whole is lost.
However, it is difficult to draw the line where the expansion of the product line ends, and where the umbrella brand begins. The examples we give are proof of this. The production of dairy products, for example, under one brand, part of marketers do not call an umbrella brand, they say, these are goods of one line. And others, on the contrary, consider this a classic of the genre. On this account there is no consensus.
What are the benefits of an umbrella brand?
The main advantage of using an umbrella approach is that a famous brand spends much less money to promote a new product under the same brand. Marketers claim that you can save up to fifty percent. Moreover, they say that for umbrella goods it is easier to arrange and distribution. Any supermarket chain will more quickly take a brand new product for sale than an unknown brand. Therefore, the expansion of the brand can increase its strength due to the large number of products on the shelves.
A lot of companies produce under the guise of an umbrella brand products, which initially is not the main thing in their sales. Do it consciously to maintain the main brand.Practically all beer companies, under their own brand, also produce rusks (“Klinsky”, “Bochkarev”). In such cases, the task of the umbrella product is to remind consumers once again about the main product.
Umbrella brand allows some firms to circumvent the laws. How? Yes, very simple. Recall the umbrella brands of alcohol and tobacco. The law limited their advertising. However, they found a way out. For example, the liquor company released the flagship Mix drink and calmly advertises it, because it is low alcohol. But in the subconscious of people, this brand has long been associated with vodka “Leader”. The management of the company, by the way, does not hide that it has developed such a move to advertise the main product.
Are there any disadvantages of this method?
An umbrella brand would be considered the best method, and all companies would switch to using it if it had only positive sides. However, oddly enough, he has enough flaws.
Umbrella brand and its specificity are such that if the manufacturer uses it, then, in fact, puts all of its finances in one “basket”.If suddenly at least one product of this brand receives a negative assessment of buyers, then it will definitely affect the entire brand. After all, the trust of customers is lost, the demand for products is reduced, which means that the company will suffer losses.
However, marketers believe that such a risk is less likely than brand erosion. What it is? This is a phenomenon in which the manufacturer suffers a huge financial loss (marketing). This happens for such reasons. People give priority to some products not by chance. It happens at the level of feelings. Important and image and reputation of the company. Naturally, a certain brand is associated with a particular product. When expanding the product line, which are very different from each other, the brand will be “blurred”.
He will not be associated with the main products. In order to avoid such a situation, manufacturers need to properly develop the concept of an umbrella: you should not take conflicting products. For example, it is impossible to combine appliances and cosmetics, products and household chemicals.
Two possible ways of development
Every modern company periodically thinks about the umbrella brand.And there are several reasons for this.
Firstly, due to the tough competition in the conditions of the modern market, all manufacturers, even very successful ones, are reviewing their marketing strategy so that positions do not weaken.
Secondly, following the plan, companies tend to be leaders in several market segments at once. In this case, marketers come up with and develop a new brand or use an old brand for new products. It is believed that the umbrella brand is the most economical and fastest way to introduce a new product to the market.
Marketers talk about two strategies for creating an umbrella brand. The first involves the expansion of the manufacturer’s product range, because consumers love diversity, which is why companies with a wide choice of products are always the most competitive. In this case, what does the umbrella brand mean? These are additional tastes, colors, types of goods. For example, chocolate maker Alpen Gold is constantly replenishing its product line with products with a new taste.
The second strategy involves the production of products from different categories under the same brand.For example, the brand MTS implied cellular communication. However, recently under this nonsense began to produce mobile phones.
Modern realities dictate their conditions
In today's market, according to experts, it is impossible to remain a leader if you produce one product or brand. So marketers are increasingly using the umbrella brand. The examples cited in the article demonstrate an irrepressible fantasy of sales professionals offering a variety of options based on an umbrella. However, all companies that decide to use this when expanding the product line need to be very careful. We must always remember that marketing practice says that an umbrella brand can bring not only success, but also become a financial collapse of a company.
When deciding on the use of such a method of promotion of the goods, you should weigh all the pros and cons, evaluate all the risks.
Market conditions are constantly changing, and therefore manufacturers have to skillfully tack. Recall, for example, how recently advertising of alcoholic beverages was limited. Umbrella brands of tobacco were also there.However, manufacturers from this will not cease to produce their goods. Marketers are developing new strategies to promote products and keep afloat.
Instead of an afterword
The attitude to the umbrella brand among specialists is very ambiguous. Some consider it a very good solution for successful activity, while others are categorically against its use. There are a number of companies that adhere to the mono-brand strategy, for example, Procter & Gamble. They will rather be engaged in the production of a niche product for a narrow audience, rather than take advantage of the "umbrella".
Although foreign brands are very actively in practice using umbrella branding. Even in the world of fashion and beauty, it is very popular. Let us recall such eminent companies as Hugo Boss, Gucci, Dior, which produce all their goods (underwear, clothes, accessories, perfumery) under the same brand. Here the choice is behind the leadership of the company.