Umbrella branding — is a marketing practice that means launching a new product or even a product line under a famous brand name. The goal of this strategy is to increase a company's market share. The term is also known as family branding.
Watch this video created by Brand Master Academy to learn what umbrella branding is, the pros and cons of using this strategy, examples, and how to leverage it as a brand architecture strategy for your business.
Advantages and Disadvantages of Umbrella Branding
This marketing practice is popular today because of the long list of benefits a company can get from this style of branding. Still, there are some important issues you should consider before giving it a try. In this section, we’ll cover both the pros and cons of umbrella branding.
Advantages of Umbrella Branding
Marketers believe that consumers associate brands with a certain level of product quality. Hence, if a particular brand has gained customers' trust and credibility, clients will consider every new offer from the brand a high-quality product due to their previous positive experiences. Let's take a closer look at the benefits this strategy can provide.
- The success of a popular product gives credibility to the new product. That's exactly what we've described above. Every positive experience and interaction with a brand makes it easier for brands to build a ladder of trust towards their business.
- It decreases advertising costs. Promoting a new product under a "no-name brand" is a real challenge. Umbrella branding requires no extra costs on bringing a product to market, building up your target audience and a powerful brand image, developing a positioning strategy, as well as your marketing strategy in general. A famous logo gives more chances for a new product under an umbrella.
- You already have loyal customers. You are more likely to get money from loyal clients who buy other products from your brand than from a cold prospect. Moreover, you'll have to pay for customer acquisition. If you promote your offer under an umbrella, you can rely heavily on word-of-mouth since consumers will definitely look for reviews before buying a new product.
- You can launch a product from a different category. Umbrella branding provides companies with a safety net to support their brand. This way, you can launch a product, not from your main category. For example, if you are a successful clothing manufacturer, consider producing footwear.
- You can significantly increase sales. Since you may be entering a new market if you launch a product from a different category, you raise your market share, which definitely leads to more sales.
Despite such tempting benefits, one mistake may lead your brand to failure. Umbrella branding has several important drawbacks. Check them out below.
Disadvantages of Umbrella Branding
You should remember that a single mistake can rock the boat of your brand. Since the consequences can be disastrous, pay special attention to possible issues below.
- The production of unrelated goods can raise questions. Don’t try to conquer every niche. Remember that all your products should be related. Would you buy medications or perfumes from a household appliance manufacturer? The brands’ clients will also find this at least a little strange. They will think that your goal is revenue by any means, and this could scare them away.
- Clients expect high-quality products. Everyone should do their job. Your product may have no competitors in the market due to its high-quality, but it’s impossible to maintain the same quality for all of your products. You will definitely need to focus more on particular goods, neglecting the quality of other products.
- One mistake can ruin your business. Just the same as a clients’ positive experience influences their next interaction with a brand, your reputation may be spoiled with one failure. As a result, it will be hard to win their trust back.
Now you’re aware of the main pros and cons you face by choosing this strategy. Individual branding is kind of a way out for new products from popular brands. Let’s take a closer look at this marketing practice.
Umbrella Branding vs Individual Branding
While umbrella branding implies promoting a new product under the name of a popular brand, individual branding is just the opposite.
Individual branding means promoting every new product as a separate entity. It works well if a company promotes a product from a different category. It provides a brand with several advantages. First, it doesn’t run the risk of your brand losing everything, including its reputation, if the new product fails. Secondly, marketers can choose a completely different positioning and marketing strategy and target other segments. That means that a new product is not tied to the brand since it carries another name, logo, etc.
These two strategies are worth your consideration. Study each one in detail before choosing it for your business.
Examples of Umbrella Branding
You certainly know the world’s most popular umbrella brands since we use them almost every day. One of the most famous ones is Apple. Firstly they only produced PCs. Their top product was the MacBook, but now the company’s product line includes iPhone, iPad, AirPods, Apple Watch, etc.
Another popular brand under an umbrella is Procter & Gamble. The product line of these world-known companies includes the following brands: Head & Shoulders, Pantene, Lenor, Ariel, Gillette, Tide, Herbal Essences, and Tampax.
Now you know a lot about the advantages and disadvantages of umbrella branding, the differences between this strategy and individual branding, and some examples. It’s time to choose the best strategy for your business.
Last Updated: 28.09.2022