In FMCG it's the norm for multiple brands to come from one company, with the likes of Unilever, P&G and PepsiCo dominating the supermarket shelves across multiple categories. But what about banking, utilities, aviation, entertainment and technology? ‘Complex’ brands i.e. those that rely just as heavily upon non-marketing levers for their success, as much as traditional marketing and communications.
Product brands by their nature are more self-contained than a service like banking. They have fewer touch points and types of interaction with the consumer. The brand positioning can be managed more consistently and via levers controlled exclusively by the marketing department, namely sponsorship, advertising, social and pack design. Synergies are easier to create and maintain.
New brands can be launched at an industrial scale using the same methods. And it can all be done in a way that ensures the brands compliment one another rather than cannibalise.
"This is our hero brand and this is our adventurer brand" – is often a phrase used to rationalise a portfolio strategy.
It's led many FMCG marketers to use tools such as semiotics and archetypes to ruthlessly, sometimes superficially, pull brands apart. "This is our hero brand and this is our adventurer brand" is often a phrase used to rationalise a portfolio strategy. Can't an adventurer be a hero, and vice versa?
Branding a service that can't just be neatly packaged up and sold with a shiny new logo, advertising campaign, tone of voice and personality archetype requires a comprehensive design of the entire customer experience in a way that is utterly complimentary and distinct from the parent brand.
In 1989 Midland Bank created First Direct, the UK's first telephone-only banking service. Fast forward over 25 years and the brand sits happily in harmony with its parent HSBC. Together the two brands attract and retain far more of the UK banking market than if HSBC were a one brand company. This is because they represent two very different and compelling experiences, not just communication styles.
HSBC is global, corporate, connected and institutional. First Direct is simple, easy, friendly and personal. Every touch point, from the call centre to the CEO is meticulously managed to ensure the two brands attract non-competitive sectors of the market. And the two brands are allowed to function fairly autonomously, allowing for effective management and decision-making.
In the mid 90's British Airways launched GO (now EasyJet) to create and grow the low cost air travel segment. More recently, Lufthansa launched German Wings to do the same rather than de-premiumise its brand. But price point is not the only reason for pursing a dual or multi-brand strategy. If one brand suffers a reputational issue (HSBC being case in point at the moment) the other brand can be protected from the fallout. Likewise, a new brand can be used to target rejecters of the existing brand or a completely different audience type.
…new technologies allow for innovative business and service models, which may not fit with the DNA of the existing brand.
The disruptive nature of technology has also caused organisations to reevaluate their approaches to brand building in line with changing consumer trends and habits. Equally, new technologies allow for innovative business and service models, which may not fit with the DNA of the existing brand.
O2, the mobile phone network, launched Giff Gaff, a youth-focused brand. It is playful and energetic, as you'd expect from a proposition targeted at 16-24 year olds. But what's striking is that the entire customer experience is radically different from a traditional network operator. Service is driven entirely by the customer community. There's no call centre. Members earn benefits and better tariffs by helping others and advocating for the brand. The result is an offer that allows O2 to go after a very different area of the market, with credibility and without risk to its core brand. And because of the difference in service model, there's far less pressure on the cost base.
We know from our own partnership with Sky, the value and importance of effective brand portfolio strategy. Our work for NOW TV is designed to create a two-brand company: Sky being the brand for premium, high quality and epic entertainment, NOW TV the fun, light and easy alternative. This is about more than just name and identity; it's about building two very different experiences and cultures too.
Introducing a second or third brand into the mix can be a scary prospect for some companies. But if the process is carefully managed and the new brand built in a deep, meaningful and differentiated way, the rewards can be huge. Even if failure occurs, as in the case of British Gas' Me Energy brand, learnings can be taken and incorporated into the core brand. And if the new brand becomes so successful that it outgrows the established brand, then so be it. No brand remains relevant forever. Better to outshine yourself, than be outshone by others.