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Does Brand Extension or Sub-Branding work?

October 17, 2006
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They do it all the time – it’s almost a badge of honour, wearing your family name. It also stands for a set of values, and this lends products more credibility. The Tatas do it all the time, so does Britannia and now even IT training and education companies like NIIT and Aptech do it. It’s called sub-branding. ‘In developing markets, it’s more common to use the company name as an umbrella brand because family name and heritage are all important,’ says Anand Halve, partner, chlorophyll.

Similar use of company names is common in Korea and Japan too – Sony and Daewoo, for example. The critical difference between a brand and a sub-brand is that the latter never stands on it’s own as it has the name of an established company to lean on – like Tata Tea or Britannia Marie. Some marketers prefer to keep the company name low profile. ‘We believe that people buy brands because they stand for a certain set of values and not because of the company,’ says Shailesh Jejurikar, marketing director, P&G.

At times, ‘descriptors’ are used below the brand or sub-brand to distinguish variants.

Branding is a complex business. One single company can have brand systems which can be a combination of family brands, corporate brands, independent brands, and extensions. Whichever route or combination of routes a company chooses depends on factors unique to the company and it’s environment. However, marketers can keep asking themselves some basic questions:

 

1. Will the complete brand system deployed by the company create confusion amongst consumers?

2. Do the present branding strategies pose any limitations on future growth opportunities?

3. Will brand extensions or sub-brands lead to cannibalisation?

4. Will the extensions strengthen the mother brand and/or company name?

 

If these questions are kept in mind before embarking on an extension, chances are that you’ll get it right.

 

(This article was published in the Economic Times some years ago and the people interviewed might have moved)

 

 

Related Reading: Product category creation- a case-study of HLL’s market segmentation strategy, The reasons why some brands fail, The success story of the Taj brand, Raymond’s advertising and brand strategy.

 

More: Even multi-nationals provide poor after-sales-service, Consumers do not really need expensive white goods, The pros and cons of web advertising and other advertising related articles.

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