Parents and children have special relationships, be they people or brands. From a brand marketing perspective parent brands are usually known as the mother-brand or even technically speaking the “holding company.” It is the owner of what usually becomes the “family of brands,” with each family member dedicated to reaching and fulfilling a specific opportunity or need in the marketplace.
As we know, brands grow over time & through different markets. Sometimes they need to differentiate themselves to be more relevant to their consumers.
There are mainly two ways in which to extend one’s mother-brand: namely, sub-branding and brand extension. But what’s the difference? And why is it important?
Sub-branding is when the main brand creates a subsidiary or secondary brand. Sub-brands are typically created as an opportunity to reach a new target consumer, but not a new category. Sub-brands can then build and sustain relationships with the new audience. This new sub-brand borrows equity from the main brand, as well as lends some equity to it.
Some sub-brands have the same logo, color treatment and branding as the mother brand. The main reason for this is that consumers who trust the main brand are more likely to try a new product under the main brand. Take, for example, Apple, Inc. Anytime Apple debuts a product, say an iPhone, iPad, iPod, etc. it increases the halo effect. People trust Apple as a brand and in turn trust the products they produce.
In other cases, sub-brands often have their own brand standards, logo, color treatment, etc. while some sub-brands reflect the same identity as the parent brand.
In some cases, this can go very wrong. This failure can negatively impact the parent brand and affect loyalty, trust, and business. Bad customer experiences can also lead to the tarnishing of the sub-brand and parent brand’s image. For example, The Virgin Group has extended their brand multiple times. Starting as a record store, Virgin now has a presence in the healthcare industry (Virgin Health Bank, Virgin Care, Virgin Active), business industry (Virgin HealthMiles), communications (Virgin Mobile), financial services (Virgin Money) etc. However, there is confusion between the main brand and sub-brands’ identities. The color treatment, logo use, and typography are not consistent. Multiple colors, type treatment and variations of the logo are used. The multiplicity of products across various business sectors adds to the confusion and negative reflection of the main brand.
Brand extension is when a brand in one category extends itself into another category. Often times this occurs when a brand achieves success. Successful brands then venture into other areas their brand could potentially fit. Upon the success of the initial brand, it opens up other areas that the brand could explore.
Another advantage would be that brands do not need to spend money on rebranding. Most brand extensions use the same brand standards of the parent brand.
A successful example of this is Patanjali. Taking the core of the road to be Ayurveda inspired products, Patanjali products constitute everything from health products to personal care to home care as well! In their case, only the mother brand Patanjali’s logo is used consistently across the entire range. But the packaging and the background colors change based on the category in which each extension operates.
But there are bad examples too. Sometimes brands extend into areas that are not natural fits. Other times, brands keep extending without rhyme or reason. This causes confusion around the parent brand. Take Colgate’s ‘kitchen entrees’ extension that they launched way back in 1982! This extension is bad purely because a product that is used to clean teeth and offer fresh breath, should not be also offering ‘tasty chicken’ to eat. It is like being the originator and the solution to the problem! In this case, using the same mother-brand logo has a negative impact and confuses the consumers, instead of helping extend the target market.
When it comes to successfully creating an umbrella brand, here are five questions as given by Brogan.com, to consider before creating a sub-brand or brand extension:
If you market a brand and are considering sub-branding or brand extension, consider the following questions:
- Is this a natural fit for my business?
- Is there a demand for this new venture?
- Will it generate a profit for my business?
- Are there enough resources to determine brand standards, if needed?
- Are there enough resources to promote and maintain the new brand or product?
It is only when you are able to answer all these questions with a strong yes, should you consider sub-branding or extending your brand.
If the answer is no, it is wiser to consider creating a new brand with new logo-design in order to protect the mother brand and offer the new brand a good chance at becoming successful. That is how you ensure that your brand’s family doesn’t end up having a black sheep!