Frankly I am glad to see the name, Motorola (or motorola as the case may be), staying in the forefront. All too often, great names in corporate history go the way of mergers and acquisitions. I understand the need to build a brand and that multiple brand names under one umbrella manufacturer can lead to fragmentation and lack of identity, however there are plenty of highly successful examples of manufacturers where multiple branding has been both status quo and very rewarding for them.
Imagine for a moment if all the Acura's out there were simply known as Honda's. There would be very little separating them from the core brand of Honda cars, as well as Honda trucks, and even Honda small engines, as well as Honda power tools. How many Acura owners would feel as special with their car being compared to or associated with a concrete wet-saw or chainsaw?
How about traveling, and deciding to stay at one hotel over another...how many executives would rather say they're staying in the Residence Inn, versus simply the Marriott, or feel real good about telling their clients or customers that they're staying in a EconoLodge or Super 8 Motel versus the Wyndham?
There is a lot to be said for Multiple Brand Coherence, as depicted here;
The inference is that with multiple brands under an umbrella brand, the individual sub-brands benefit from the strength and protection of the parent or umbrella company. This then suggests that by having too much individuality leaves you at risk of more individual scrutiny and potential dire consequences. Bad news about a mere sub-brand isn't likely to bring down a major conglomerate, however if the brand stands on its own, then it's out there and open to attack from all sides.
Also sub-brands can be easily (let's say more-easily), plugged in and removed while the umbrella brand still weathers the storm. Take Coke for instance;
Ever heard of OK Soda? Yep...Coke. Citra? A little sour for the market. Vault? Looks like it missed the Pommel Horse...another one bites the dust. And Tab Clear - well clearly not a winner here.
And yet, Coca Cola is still one of the most widely distributed beverages in the world, holding 41% of the US market for Soft Drinks, just with Coke and Diet Coke, followed by Pepsi at 15%. If you add in the other sub-brands, Sprite and Fanta, Coke reigns as the king garnering more than half the total US market share.
http://www.accuval.net/insights/industryinsights/detail.php?ID=142
From Wikipedia;
Advantages[edit]
- Promotion is very cheap and easy for products falling under umbrella branding. This strategy is generally implemented by firms coming up with a new product.
- For all the different products and services, advertising, promotion and Integrated Marketing Communications tools can be combined.
- Also, launching of a new product under umbrella gains recognition easily as it is introduced in the market which has already accepted the brand image.
Disadvantages[edit]
- If any one product under umbrella branding does not do well in the market then it can affect the overall brand
- Different brands in umbrella branding will have different qualities which will vary and thus it can be an obstacle for smooth functioning of brand as well as firm.
- Also, if there is negative publicity for any product or even new product it can affect the other brands under umbrella branding.
Purposes[edit]
- It is easy to identify the new brand in the company under umbrella branding by the customers.
- It gives uniformity to all the brands falling under it may be through one designated approach of advertising, promotion, packing etc.
- It is a very economical strategy to be implemented.
- It is probably the best way to enter into new segments or introduce a new product to market.
- It will be very profitable for firms which are having different quality of brands and different images of brands if followed properly.
- It is the branding strategy that gives the probability of a brand extension for every possible quality of profile.
