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Do you need a strong corporate brand?

Creating and presenting a strong brand is all about establishing value. 

This is especially true if you are selling direct to consumers. If you been dealing primarily with distributors or retailers, your brand is important, but to a lesser degree. If you shift your focus to selling directly to consumers, branding principles begin to apply.  Here are some of those principles:

  • People buy from people and companies they know and trust
  • People buy products they know and trust
  • The values people hold determine the choices they make
  • If people don’t understand the higher value of your products and services, they will default to the lowest price
  • A robust and effectively communicated brand increases your value
  • If you do not define your brand, competitors and market forces will define it for you

 While companies that operate multiple business units or multiple product lines have always had the option of employing a master brand strategy (such as BMW with 3, 5 and 7 Series models), branded house strategy (such as Proctor & Gamble with Ivory, Pampers, and Tide brands), or some alternative in between (such as Sony Walkman and Sony PlayStation), today’s business environment seems to call for the more cohesive, consolidated approach.


Efficient impact. Promoting a single brand with a single campaign naturally makes for a more efficient marketing spend, but in today’s fragmented media landscape, the advantage is even more pronounced. In advertising, a company with a strong master brand can maximize the exposure it generates as it splits its ad dollars among the plethora of broadcast media outlets, as well as the proliferating niche social media channels.

Customer retention. With a master brand strategy, a company is able to build longer-lasting customer relationships. By developing customer bonds with the overarching brand, companies can offset the natural customer attrition that brands and products experience when their appeal is based on a discrete period of time, like a certain life stage. Instead of customers abandoning the brand altogether when they “graduate” out of a product, they are more likely to shift to another offering in the master brand portfolio. This is particularly important as new brands these days tend to be more targeted to narrow market niches with more limited appeal — e.g., instead of a single low-calorie option, Coke now offers Diet Coke or (aimed at women), Coke Zero (aimed at men), and Coke Zero Sugar (aimed at consumers specifically avoiding sugar).

Increased flexibility. Because many companies are operating with lower margins today than in the past, they need increased flexibility to better manage costs and inventory. Emphasizing its master brand gives a company flexibility in brand portfolio management and in advertising and promotion. When costs, demand, or other factors change the strategic importance of the products and brands in its portfolio, a company can delete, modify, or combine them with less risk of confusing customers or losing market salience. It can also more easily and quickly prioritize and de-prioritize different products and brands in advertising and promotional efforts to respond to competitive moves and market changes.

Brand equity. Companies continue to look to new products and brands to produce growth, but the continued decline in consumer trust in brands means new brands must clear an increasingly high hurdle. When new brands are able to draw upon a master brand’s existing equity, they have a greater likelihood of success than those that start from scratch. By conveying credibility, quality perceptions, and sometimes simply familiarity, master brands make the introduction of new sub-brands easier and usually more successful.

Competitive strength. Between new media channels, new financing options, and consumers’ changing tastes, it is more feasible now than ever for start-ups and small businesses to build attractive brands and launch competitive challenges to more established players. But their effectiveness can be dampened when an existing market leader has pooled its resources and leverages the combined power of all of its brands. A master brand strategy creates strength in numbers and establishes a competitive moat of sorts around the smaller brands in the corporate portfolio.

A key growth strategy is to develop a clear and compelling corporate brand and promote it aggressively in products, diversified outreach, and programs.


Source:  Harvard Business Review. For a more complete discussion of his topic, see https://hbr.org/2016/03/why-companies-are-advertising-their-master-brand

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