“Development of umbrella branding” — Ruslan Mukhametshin for Kommersant
Development of an umbrella branding is a double-edged sword. On the one hand, by promoting different products under a single brand, the company could save on marketing expenses. On the other hand, there is a great risk of not getting into the right target group with product positioning, especially when it comes to fundamentally new business areas.
Ruslan Mukhametshin, head of the consulting and evaluation department of "Prime Advice":
It would seem that using an existing brand to promote a new business line is a good idea both in terms of lower advertising costs and promoting the brand as a whole. The period of product launch is significantly reduced, there is no need to invent anything new, and spend additional budgets on related activities. However, if we are talking about consumer products distributed through retail chains, and if the parent company's business is very different from the new direction, then it is the newly created brand that will give the product a better chance.
The expert reminds that a brand is nothing more than the name on the packaging of a certain product or service on a shelf in the consumer's head.
It can hardly be considered a success whether, let's say, a bottle of milk causes the same associations as a bag of washing powder. The brand would be blurred in the eyes of the consumer — that is, in fact, it would cease to perform its task, namely, to position the product on the same imaginary shelf in the head,
explains Ruslan Mukhametshin. You don't need to go far for examples: "Mars" LLC does not produce food for animals under the brand of chocolate, but has created several separate brands for this direction. Similarly, Colgate-Palmolive does not make pet food under the brand of toothpaste.
Of course, this statement is not always true. If a company produces crushed stone, and begins to engage in the production of concrete, it is pointless to create a new brand for this: the consumer will rather look at the company's reputation, rather than the name of the product,
— says Mr. Mukhametshin. That is, if the product is standardized and is not something new, and competition in the market is high, then it is logical and appropriate to use a common brand.