Umbrella brand

Umbrella branding (also known as family branding) is a marketing practice involving the use of a single brand name for the sale of two or more related products.[1][2] Umbrella branding is mainly used by companies with a positive brand equity (value of a brand in a certain marketplace).[3] All products use the same means of identification and lack additional brand names or symbols. This marketing practice differs from brand extension in that umbrella branding involves the marketing of similar products, rather than differentiated products, under one brand name.[4] Hence, umbrella branding may be considered as a type of brand extension. The practice of umbrella branding does not disallow a firm to implement different branding approaches for different product lines (e.g. brand extension).[5]

Axe (by Unilever) has a range of similar products that use the same family brand (Axe deodorants, Axe shampoos, Axe shower gels, Axe hair stylers,

Purpose

Umbrella Branding is used to provide uniformity to certain product lines by grouping them under a single brand name, making them more easily identifiable and hence enhancing their marketability. All products under the same corporate umbrella (masterbrand providing structure and credibility to other products of the corporation) are expected to have uniform quality and user experience (e.g. All products carrying the parent brand must be of the same high quality standards).[6]

Factors that may determine the impact of umbrella branding include:

  1. The degree of commonality among the products falling under the corporate umbrella (e.g. Whether the products may act as substitutes for each other).
  2. The brand equity of a corporation (e.g. Whether the brand is known in its product market).

Theories

Various theories attempt to explain a consumer's decisions and judgements during product purchasing that cause umbrella branding to be a successful marketing strategy.

Categorisation theory

The categorisation theory is based upon the notion that consumers tend to categorise products by associating them to brands and their past experiences with those particular brands (stored in their category memory) in order to evade the initial confusion caused by the extensive choice of products they are presented with. New information on certain products are categorised into various sections such as product class (e.g. beverage) and brand (e.g. Coca-Cola) and then stored. Afterwards, consumers evaluate the product quality through past experiences with the brand's products as well as the brand equity.[7]

This theory also explains for the popularity of umbrella branding. Consumers tend to evaluate new products not only by positive brand equity but also if the brand's concept is consistent with their extended products.[8] For instance, assuming that the consumer had satisfactory past experiences with the company's products, if Apple Inc. would develop and sell a new version of a Macbook, consumers would deem it more reliable and potentially of superior quality rather than if Apple would produce a new beverage due to Apple's past product line.

Schema congruity theory

The schema congruity theory suggests that the storage of new information and retrieval of memory is majorly influenced by past expectations.[9] Schemas are a human's personal cognitive representations of the environment that guide their perceptions, thoughts and actions.[9] Schemas go through constant change as a human experiences and learns new information. Nonetheless, the new information is firstly evaluated on the basis of existing schemas. Relating the theory to consumer evaluation of products, a consumer already possesses pre-existing schemas from past experiences with certain brands and therefore new products are evaluated based on the existing schema the consumer has with the certain brand. This theory is quite similar to the categorisation theory; however, the schema congruity theory places emphasis on the consumer's past experiences with the brand which is influenced by the surrounding environment.

Confirmation bias

Main article: Confirmation bias

Confirmation bias is a form of statistical bias, describing the tendency to seek for or interpret evidence in ways that support one's existing beliefs.[10] After a consumer creates a preference of one brand over others, any additional feature that may be common between various brands will most likely only strengthen the consumer's pre-existing preference, causing them to disregard other brands.[10] Hence, a positive brand equity may not be as influential if a consumer already has a pre-existing brand preference.

Benefits

Umbrella branding has become a popular marketing practice utilised by companies due to its various potential benefits. Such marketing practice may create advertising efficiencies through the reduced costs of brand development.[11] This strategy reduces a firm's marketing costs due to the consumer-brand association through which consumers already recognise certain brands, making new products more easily identifiable.[12] Consequently, the market entry for umbrella branded products is relatively inexpensive since reputable brands can take advantage of past marketing efforts. Furthermore, a company benefits from advertising efficiencies since umbrella branding focuses on the promotion of a single brand rather, than multiple ones. For instance, Apple Inc. adds new products (e.g. Macbook Pro , Apple Watch) to their line and benefits from past marketing since consumers use previous information to make an inference about a product with the same brand name, allowing Apple to focus on promoting the corporate brand, rather than multiple individual brands. Additionally, the use of umbrella branding does not prevent companies from implementing other methods of brand extension, enabling them to remain flexible with marketing strategies.[13] Finally, the success of one umbrella branded product may translate to other products under the same corporate umbrella due to the positive brand equity.[13]

Risks

A major risk of utilising umbrella branding is that it may result unsuccessful in promoting new products if the company does not have a strong brand equity. Secondly, the consumer’s experience with one umbrella branded product may affect their perception of other products and services falling under the same corporate umbrella as well as the brand itself. Consequently, if one umbrella branded product does not satisfy the consumer's expectations, the other products sold under the same brand are also likely to suffer.[14] Thus, the company might result in a negative brand equity (also known as brand equity dilution).[15] Thirdly, umbrella branding is only beneficial when promoting relatable products through which consumers could recognise the brand. For instance, the Starbucks brand is associated to coffee-related products and therefore consumers would mainly recognise the brand on products related to the specific market. Lastly, cannibalisation (reduction in sales volume due to the introduction of a new product by the same company) may result when related products are introduced under the same corporate brand as internal product competition will lead to consumers choosing between products from the same brand, stunting future investment into product creation of the same product line under the corporate umbrella.[16]

Popular Usage

Starbucks Corporation, Virgin Group, Procter & Gamble, Unilever, Apple Inc. and The Coca-Cola Company are examples of multinational companies that use umbrella branding in some of their product lines.

Starbucks Corporation

Starbucks Corporation (operating as Starbucks coffee) is an American multinational coffee company, which markets all of their products under their corporate brand name. Some products produced by Starbucks include:

View full list here

Virgin Group

Virgin Group Ltd. is a British multinational branded investment corporation.[20] Virgin is one of the world's most recognised brands, which has used various types of brand extensions, including umbrella branding. Virgin has 33 branches that operate under the Virgin name; however, the practice of umbrella branding is observed in their industry-specific brands (e.g. Virgin Drinks, which was a subsidiary of Virgin Group that marketed Virgin Cola and Virgin Vodka) including:[21]

Virgin Group Ltd. Corporate brand logo.

View full list here

Procter & Gamble

Procter & Gamble (also known as P&G) is an American multinational corporation, providing a range of consumer products.[22] Although P & G create individual product brands (e.g. Pampers or Pantene), umbrella branding is implemented within the individual brands.[23] Some individual brands owned by P & G include:

Procter & Gamble corporate logo.

View full list here

P & G create individual brands for different product lines and then implement umbrella branding within those brands in order to control profitable market sections. This strategy allows P & G to abstain from the risk of damaging the corporate brand's image from the release of an unsuccessful product, as the brands are not interconnected.[28]

Unilever

Unilever is a British-Dutch multinational company providing various consumer goods. Similar to Procter & Gamble, Unilever implements umbrella branding within the individual brands it creates including:

View full list here

Apple Inc.

Apple Inc. is an American multinational technology corporation that develops and sells a range of consumer electronic goods and services. Apple Inc. market all their products under their corporate brand name including:[33]

Apple Inc. Corporate brand logo.

View full list here

The Coca-Cola Company

The Coca-Cola Company is a multinational corporation manufacturing various beverages. The corporation also implements umbrella branding within the individual brands for various flavored beverages including:

The Coca-Cola Company Corporate brand logo.

View full list here

Other companies that have implemented umbrella branding in their marketing strategy include: Nivea (German personal-care brand),[42] Marriott (hospitality company)[43] and FedEx (Global courier delivery corporation).[44]

See also

References

  1. ↑ Fry, J. N. (1967). "Family branding and consumer brand choice". Journal of Marketing Research. 1 (Pre-1986): 4(000003), 237.
  2. ↑ Röwekamp, Josephine (May 2010). "Under one umbrella? Step 3 in brand development: Brand architecture" (PDF). kleiner und bold GmbH. KU Gesundheitsmanagement. Retrieved 21 October 2015.
  3. ↑ Pullig, Chris (June 2008). "What is Brand Equity and What Does the Branding Concept Mean to You?" (PDF). baylor.edu. Baylor University. Retrieved 26 October 2015.
  4. ↑ Erdem, Tülin (1998-08-01). "An Empirical Analysis of Umbrella Branding". Journal of Marketing Research. 35 (3): 339–351. doi:10.2307/3152032. JSTOR 3152032.
  5. ↑ Kapferer, Jean-Noël (2008). The new strategic brand management: creating and sustaining brand equity long term. Kogan Page Publishers. p. 364. ISBN 9780749450854.
  6. ↑ Fry, J.N (1967). "Family branding and consumer brand choice". Journal of Marketing Research. 1 (Pre - 1986): 4 , 237.
  7. ↑ "The Prototypicality of Brands: Relationships With Brand Awareness, Preference and Usage by Prakash Nedungadi and J. Wesley Hutchinson". Retrieved 2015-10-26.
  8. ↑ Park, C. Whan; Milberg, Sandra; Lawson, Robert (1991-09-01). "Evaluation of Brand Extensions: The Role of Product Feature Similarity and Brand Concept Consistency". Journal of Consumer Research. 18 (2): 185–193. doi:10.1086/209251. JSTOR 2489554.
  9. 1 2 "Sponsorship and Congruity Theory: a Theoretical Framework For Explaining Consumer Attitude and Recall of Event Sponsorship by Emma Jagre, John J. Watson, and John G. Watson". Retrieved 2015-10-26.
  10. 1 2 Nickerson, Raymond S. (18 December 1997). "Confirmation Bias: A Ubiquitous Phenomenon in Many Guises" (PDF). Review of General Psychology Vol. 2, No. 2, 175-220. Retrieved 26 October 2015.
  11. ↑ Lane, Vicki; Jacobson, Robert (1995-01-01). "Stock Market Reactions to Brand Extension Announcements: The Effects of Brand Attitude and Familiarity". Journal of Marketing. 59 (1): 63–77. doi:10.2307/1252015. JSTOR 1252015.
  12. ↑ Besanko, David; Dranove, David; Schaefer, Scott; Shanley, Mark (2012). "Part 1". Economics of Strategy. p. 73.
  13. 1 2 Kapferer, Jean-Noel (2012-01-03). The New Strategic Brand Management: Advanced Insights and Strategic Thinking. Kogan Page Publishers. ISBN 9780749465162.
  14. ↑ Miklos-Thal, Jeanine (28 May 2008). "Linking Reputations: The Signaling and Feedback Effects of Umbrella Branding" (PDF). http://peitz.vwl.uni-mannheim.de/. Retrieved 21 October 2015. External link in |website= (help)
  15. ↑ Loken, Barbara; John, Deborah Roedder (1993-07-01). "Diluting Brand Beliefs: When Do Brand Extensions Have a Negative Impact?". Journal of Marketing. 57 (3): 71–84. doi:10.2307/1251855. JSTOR 1251855.
  16. ↑ Iacobucci, Dawn (2001-06-18). Kellogg on Marketing. John Wiley & Sons. ISBN 9780471054047.
  17. ↑ "Starbucks Coffee Beans, Pods, Ground & Whole Bean Coffee". store.starbucks.co.uk. Retrieved 2015-10-25.
  18. ↑ "Buy Starbucks Green, Black Tea | Loose Leaf and Tea Bags". store.starbucks.co.uk. Retrieved 2015-10-25.
  19. ↑ "Tumblers, Cold Cups, Starbucks Cups and other Drinkware". store.starbucks.co.uk. Retrieved 2015-10-25.
  20. ↑ "About us - Virgin.com". Virgin.com. Retrieved 2015-10-22.
  21. ↑ Belleflamme, Paul; Peitz, Martin (2015-08-13). Industrial Organization: Markets and Strategies. Cambridge University Press. ISBN 9781107069978.
  22. ↑ "P&G Purpose and People". www.pg.com. Retrieved 2015-10-24.
  23. ↑ "Our Brands | P&G". us.pg.com. Retrieved 2015-10-24.
  24. ↑ "Pantene". pantene.com. Retrieved 2015-10-24.
  25. ↑ "View all Oral-B products". www.oralb.com. Retrieved 2015-10-24.
  26. ↑ "Mens Shaving Products | Gillette UK". gillette.co.uk. Retrieved 2015-10-24.
  27. ↑ "Vicks". vicks.com. Retrieved 2015-10-24.
  28. ↑ Davis, John Andrew (2010-03-08). Competitive Success, How Branding Adds Value. John Wiley & Sons. ISBN 9780470998229.
  29. ↑ "Axe Deodorant & Antiperspirant Product Range". axe-us. Retrieved 2015-10-25.
  30. ↑ "Health & Beauty Products UK | Beauty Product Online - Dove". www.dove.co.uk. Retrieved 2015-10-25.
  31. ↑ "House of LUX Products - Feel Fabulous. Do Fabulous.". www.houseoflux.com. Retrieved 2015-10-25.
  32. ↑ "Flavors | Ben & Jerry's". http://www.benjerry.com. Retrieved 2015-10-25. External link in |website= (help)
  33. ↑ Leibtag, Ahava (2013-09-17). The Digital Crown: Winning at Content on the Web. Newnes. ISBN 9780124076570.
  34. ↑ "Mac - Apple". Apple. Retrieved 2015-10-25.
  35. ↑ "iPhone - Apple". Apple. Retrieved 2015-10-25.
  36. ↑ "iPad - Apple". Apple. Retrieved 2015-10-25.
  37. ↑ "iPod - Apple". Apple. Retrieved 2015-10-25.
  38. ↑ "Apple Watch - Apple". Apple. Retrieved 2015-10-25.
  39. ↑ "One Brand". www.coca-cola.co.uk. Retrieved 2015-10-25.
  40. ↑ "Fanta Flavours | There's a fruity flavour for every taste". www.fanta.co.uk. Retrieved 2015-10-25.
  41. ↑ "Our Products | Minute Maid®". Minute Maid. Retrieved 2015-10-25.
  42. ↑ "Skin care products and advice for Men & Women | NIVEA UK - NIVEA". www.nivea.co.uk. Retrieved 2015-10-25.
  43. ↑ "Marriott International | Marriott brands". www.marriott.com. Retrieved 2015-10-25.
  44. ↑ "FedEx: Shipping, Logistics Management and Supply Chain Management". www.fedex.com. Retrieved 2015-10-25.
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