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When is a master brand strategy a desirable approach?

Mar / 2018 by
2 0
When is a master brand strategy a desirable approach?

Brand architecture refers to the way a business links its corporate brand to its product and/or service brands. Having a clearly organized brand architecture helps the public understand what a company offers and how they can engage with the brand. Companies with multiple business units or product lines mainly use one of the following four brand architecture strategies:

  1. Monolithic
  2. Freestanding
  3. Endorsed
  4. Hybrid.

The benefits of master brand strategies

There are several reasons why master brand strategies–such as the monolithic or endorsed approach–are attractive for businesses. For instance:

  1. Using an established brand name to introduce new products to the market requires lower marketing and brand development costs.
  2. When a master brand with high credibility and familiarity introduces new sub-brands, the parent brand acts as a risk eliminator as it increases product acceptance among consumers.
  3. By combining the power of all brands, master brand strategies boost the competitive strength of companies, especially in terms of their smaller brands.

Taking such benefits into account, it is not a surprise that many companies favor family branding and brand extension over the creation of new brands. Nonetheless, a master brand strategy also carries challenges. For instance, the approach does not allow for very specific product, target or market positioning. Additionally, if a product or service goes through a crisis, the whole brand may suffer.

What influences the use of master brand strategies?

Whether or not master brand strategies are a desirable approach depends on several factors, including firm-based characteristics, product-market characteristics and the underlying market dynamics.

1. Firm-based factors

2. Product-market factors 

3. Market dynamic factors

Conclusion

Although the aforementioned factors influence the likelihood of companies to adopt a master brand structure, the ultimate question a company should ask itself is: “What does my audience want?” When deciding which brand architecture model to follow, companies need to first understand who their audience is and what their brands mean to their audience. Brand architecture models should be shaped from the “outside in”, taking the consumers and customers’ point-of-views into account.

Over the past years, companies like P&G, Hersey’s and Coca-Cola have started to move from the freestanding approach towards the hybrid approach, increasingly emphasizing their corporate brand in their marketing and communication strategies. According to branding consultant Denise Lee Yohn, it can be expected that more companies will jump on the master brand strategy bandwagon, since it helps companies deal with today’s business challenges and opportunities. All in all, each company should weigh the benefits and drawbacks of all brand portfolio strategy options and align them with the corporate strategy.

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