Multiple Brands

We come across situations where companies introduce multiple brands into the market with a variety of justifications ranging from the need to service alternate channels to the need to address competition at varying price points. Having more than one brand or multiple brands is not an issue per-se. However, what is important is that we are clear that these address different customer segments with different brand offerings.

Very often companies succumb to pressure from trade channels and sales teams to create multiple brand offerings in the market. The result is channel conflict, internecine competition for the same customers and erosion of value. Quite simply, if there is no differentiation in product offering across brands there is no rationale for separate brands.

This affliction of multiple brands serving no real purpose is specific to organisations that are sales-led. In such organisations, the marketing function is all but absent with no real custodian for the brand. Brands are created at will to serve the objectives of the sales teams or field offices with an inadequate understanding of the customers that these brands serve. Price segmentation is often quoted as the single biggest reason for multiple brands. Launching similar products at multiple price points only results in customers trading down to the cheaper versions with channels aiding this in an active manner.

This misunderstanding is born of two misconceptions with regard to what are customer segments and what brand management is all about. Price segmentation is but one classification.

Customers differ in respect of the functional, emotional and social benefits they seek from a brand. Some customers buying a holiday could be willing to trade off convenience for cost; customers for a car could choose or lower operating costs for performance, or looks for reliability. Thus there are multiple dimensions to segmenting customers based on their needs. Strong brands are a blend of product performance and imagery. It is this combination of duality that helps differentiate them and serve varied customer segments.

The task of marketing managers everywhere is to craft the brand to serve the customer segments that they wish to target