Marketing of more than two competing and almost identical products, that belongs to a single organization and is filled under different and unrelated brands, is called multi-branding.
The core idea of multi-brand strategy is to increase the overall market share.
B2C is the most common industry for multi-brand companies because compared to B2B, it values market segmentation.
Market segmentation is an effective way to expand customer influence, who make purchasing decisions, according to various factors.
Due to the fact, that it’s almost impossible for a single brand to reach and maintain the variation that market segmentation offers, diversifying and applying multi-brand strategy to maximize the relevance to the customers is a practical thing to do.
Moreover, thoroughly analyzing and understanding the goals of your organization is vital for making precise choices, while implementing the multi-brand strategy
Advantages and Disadvantages of Multi Brand Strategy
The Advantages of Multi-Branding
- Leaving less shelf space for competitors and obtaining more for yourself.
- Effectively using brand-switchers, who love to experiment with different brands.
- Competition between managers
- If the initial business succeeds, it can develop a second brand without noticeable expenses, through the franchise.
The Disadvantages/Risks of Multi-Branding
- Cannibalization between brands.
- Confusion caused by overlapping segments, that will result in brand switching.
- The public image of your brand may become profit oriented, rather than the customer.
- Failure due to poor management.
- Failure from wrong business choices.
Examples of Multi-Brand Strategy
Procter & Gamble (P&G) – Is an American consumer goods company, that sells 23 different brands. For example, Tide, Pampers, Gillette, Ace, Head & Shoulders, etc.
Unilever – Is the biggest manufacturer of ice-cream and a multinational consumer goods company, that also produces several worldwide brands. For instance, Persil, Axe, Rexona, Sunsilk, Dove, Lipton and more.
Virgin Group Ltd – Is a British multinational brand and it runs businesses like Virgin Bingo, Virgin Cafe, Virgin Casino, Virgin Charter, Virgin Holidays, Virgin Coffee, Virgin Healthcare, etc.
Three Main Types of Brand Architecture
- When products are general and the only thing that separates it from the competition is the brand identity. For instance, FedEx Corporation.
- When unique names of the brands are present, but the identity of the company keeps supporting it. For example, Virgin Group Ltd.
- When a brand names function on their own and no one has a clue who the actual owners are. For instance, Unilever.
All three types have their advantages.
If the main idea of the corporation is shared among every product the organization produces, then having multi-products under a single brand is a wise and efficient decision to make.
Though, despite the statement above, certain fields/businesses should not apply the method. For instance, if the field is ecology, producing stuff like eco-phone, eco-trousers or eco-lemonade will do no good.
Products that are similar to the system that Virgin Group Ltd uses, are always proud that they were bred from a worldwide brand, but it carries certain risks.
For example, if any of the products the company produces fails, it will reflect on the whole organization. But, of course, with proper management and supervision the risk can be minimized.