UMBRELLA VS HOUSE OF BRANDS APPROACH

Appropriate brand architecture serves as a corporate roof and is the need of every company. It assists them to develop performance guideline on the basis of which it emphases its strategy. Such guidelines ought to be clear for the audience to comprehend the image, the company aims to project. In this sense, brand architecture strategy comprises of two approaches,

  1. UMBRELLA OR BRANDED HOUSE
  2. HOUSE OF BRANDS

How can companies determine, which approach would be most effective?

The table below offers questions which a company should question itself at the time of strategy evaluation.

BOLG 2

WHAT IS AN UMBRELLA APPROACH?

It’s basically a use of a single brand, which acts like an umbrella for the diverse company products. A good example of this approach is APPLE. They may have various categories and divisions but all have to fall under the scrutiny of existing branding strategies. Right from April 1976 with introduction of personal computer kit to iPad in 2010, here is Apples revolution.

The degree of revolution Apple has made with the iPhone is truly commendable. Below is a picture comparing the original iPhone with the latest iPhone 6 Plus.

blog 22

The year 2015, marked the introduction of another version of Apple iPhone-6s and 6s Plus. The opening weekend sale for the ninth generation iPhone, 6s and 6s Plus was more than 13 million units, which broke the record of previous 10 million units by iPhone 6 and 6 plus. As per the statement made by apple CEO Tim Cook, customers incredibly loved the 3D touch and live photos feature of the phone. In regards with the product life cycle, where iPhone 6 and 6s Plus were introduced in mid of September 2015, then it became so popular in the market, the customers wanted more of it, after gaining popularity it reached a stage where the demand of the product in comparison to its introduction stage was low. As the lifespan of technology is short, there is a need to keep the product updated to keep a hold on the apple customers.

In order to achieve that, this year Apple is coming up with its big screen iPhone 7 plus.

Lets discuss on HOUSE OF BRANDS APPROACH?

In this, there exists a separate identity for each of the brand products which makes it distinct from the rest. One of the positives associated with this approach is that it gives great flexibility and freedom of action. On the contrary, the negative aspects of it would be, possible absence of synergies between brands , budget increase due to  need for investment to build up many brands and also risk related with brand confusion. GENERAL MOTORS falls under this category.

INTRODUCTION STAGE- General Motors

The beginning of General Motors can be traced back to 1892, brands falling under the world’s largest full-line manufacturer and marketer include Chevrolet, Saturn, Hummer, Pontiac, GMC and Saab, while Opel, Vauxhall and Holden comes under General Motors international nameplates.  Its journey from the first Buick horseless carriages to techno marvels like Chevrolet Volt, have continuously outshined putting the world on wheels.

EFFECT OF DEPRESSION AND WORLD WAR II ON GENERAL MOTORS

The great depression had an effect on the functioning of General Motors, but it successfully emerged with its new aggressive management. The policy adopted involved, the staff conducting market trend analysis, also advised policy committees and coordinated the administration work. A change in the system of the organization was crucial for its success.

BEYOND YEAR 2000

General motors underwent financial crisis, the fact being, the emergence of highly market focused competitors like Honda and Toyota. There was a loss of market focus across many diverse portfolios level. The company is in need of government’s support to survive. While, competitors Honda and Toyota are at present having short term cash flow problems, they do not have a history of collective cash flow losses.

This industry demands for the manufacturers taking notice of the customer wants as the future depends on the level to which upcoming technological opportunities will permit the industry to be as dynamic as it was 100 years ago.

So, WHICH WOULD BE YOUR BEST CHOICE BETWEEN THE TWO APPROACHES?

The fundamental factor is knowing our market, our brands product and our capacity to extend the products life. It all depends on how well we project ourselves and what suits our business, whether a single entity with single identity or a brand diversification.

 

 

Payal Sathe: 214282244

WordPress Username:pvsathe

Deakin Email: pvsathe@deakin.edu.au

References:

  1. Hanover Research. (2013). 4 Brand Positioning Strategies for Multi-Product Categories. [online] Available at: http://www.hanoverresearch.com/insights/4-brand-positioning-strategies-for-multi-product-categories/?i=industrial-manufacturing [Accessed 23 Apr. 2016].
  2. Gm.com. (2016). History & Heritage | Our Company | GM.com. [online] Available at: https://www.gm.com/company/history-and-heritage.html [Accessed 22 Apr. 2016].
  3. How and When did Apple Starts – Apple Inc. Revolution (1976 – Present). (2013). Available at: https://www.youtube.com/watch?v=3VuwB-R3FDM [Accessed 21 Apr. 2016].
  4. veybusinessjournal.com. (2016). HOW GENERAL MOTORS LOST ITS FOCUS – AND ITS WAY | Ivey Business Journal. [online] Available at: http://iveybusinessjournal.com/publication/how-general-motors-lost-its-focus-and-its-way/ [Accessed 22 Apr. 2016].
  5. iPhone 6 Plus Review. (2014). [image] Available at: http://terrywhite.com/iphone-6-plus-review/ [Accessed 21 Apr. 2016].
  6. Macrumors.com. (2016). iPhone 6s and iPhone 6s Plus Sales Top Thirteen Million in Launch Weekend. [online] Available at: http://www.macrumors.com/2015/09/28/iphone-6s-and-iphone-6s-plus-sales/ [Accessed 23 Apr. 2016].
  7. morillas. (2013). House of Brands vs. Branded House – morillas. [online] Available at: http://www.morillas.com/en/blog-en/house-of-brands-vs-branded-house/ [Accessed 24 Apr. 2016].
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