In the availability of various choices of brands and products, it is essential for marketers to engage and maintain customer’s attention to their own brands or products. Considering as one of the branding strategies, umbrella branding, or also called family branding, is an influential approach that marketers apply to company practices in order to enhance brand loyalty over the appearance of new entrants and competitors.
Umbrella branding is defined as a marketing practice which involves covering several products under a single brand name (Miklós-Thal 2012). Some companies have utilised this strategy to their products and product line and gain many advantages such as Virgin Group, Starbucks Corporation, Apple, etc.
Umbrella branding can enhance existing reputation, improve brand equity to a brand name and deliberate inexpensive market entry at the same time (Miklós-Thal 2012). When introducing a new product to the market, it requires large amount of time and investment. These costs can be minimized if the new product carries a same brand name. This approach helps to attract consumers’ awareness to new product with establishing reputation and convince consumers that the latest and existing products present similar quality. Consumers seem to consider about quality when scanning a new product, the umbrella branding approach helps the firm to increase confidence and avoid uncertainty for consumers to the new product or product line (Erdem & Chang 2012). It contributes to a stronger brand association that is beneficial to the brand itself and others.
It adds value to the brand name and create brand loyalty from consumers. When consumers have positive feedback with a product under the umbrella brand, they intent to look for another products with same brand name by some means or other.
Umbrella branding also brings benefits to the firms when planning and developing new campaign. The firm can earn efficiency and economize on investing for promotion and marketing for an umbrella brand rather than different marketing activities to different products but still enhance effective impacts. Even though extra budgets can be ignored or minimised, it still maintains the same or even further positive effects.
Taking Virgin Group as a successful example of umbrella branding approach. Virgin Group is a well-known brand with international leading investment activities as well as numerous sectors in many fields of business (About us n.d.). The brand “Virgin” includes in many addition areas that the organization involves in. Virgin Group obtains an umbrella brand in many industries such as Virgin Atlantic, Virgin Holidays, Virgin Green Fund, Virgin Mobiles, etc.
On the flip side of contributing certain advantages, the umbrella branding approach also concerns about some disadvantages to the firms and the product itself. Domino effect will occur if umbrella strategy does not handle effectively. Domino effect happens when one event causes a series of connecting events to be arisen. It can also described as a chain reaction. Relating to the umbrella branding strategy, suggested that one product under the same brand name fail to fulfil consumers’ satisfaction and contain undesirable feedback from the market, it will generate unavoidable harms and damages to the firm’s reputation, the brand image and other products under the umbrella brand.
Nestle is an example for negative impact regarding to the umbrella branding approach. The controversy of Maggi, one of the brand under Nestle relating to the withdrawal of nine variant of Maggi instant noodles in India has affected the image and reputation of the brand itself (What is umbrella branding n.d.)
By Thanh Truc Duong – 215241883
About Us n.d., Virgin, retrieved 24 April 2016, <https://www.virgin.com/about-us>
Erdem, T, & Chang, S 2012, ‘A cross-category and cross-country analysis of umbrella branding for national and store brands’, Journal of the Academy of Marketing Science, vol. 40, no. 1, p. 86-101, DOI: 10.1007/s11747-011-0288-8
Miklós-Thal, J 2012, ‘Linking reputations through umbrella branding’, Quantitative Marketing & Economics, vol. 10, no. 3, pp. 335-374, DOI:10.1007/s11129-012-9118-7
Nestle, The Californian Drought, And Why Buying Bottled Water Is The Dumbest Thing You Can Do For The Planet 2015, photograph, retrieved 24 April 2016, <http://csglobe.com/nestle-the-californian-drought-and-why-buying-bottled-water-is-the-dumbest-thing-you-can-do-for-the-planet/>
Stretching the Virgin logo 2009, photograph, retrieved 24 April 2016, <http://www.logodesignlove.com/stretching-the-virgin-logo>
Vides T 2014, Using the Umbrella Approach to Content Marketing, photograph, retrieved 24 April 2016,<http://www.business2community.com/content-marketing/using-umbrella-approach-content-marketing-0857436#bjVT7rSEePhgIQp7.97>
What is Umbrella branding and its advantage in building a brand n.d., Marketing 91, retrieved 24 April 2016, <http://www.marketing91.com/umbrella-branding/>