Should You Implement a Multi-Brand Strategy for Your Startup?

I used to research a lot on brands, their marketing and other interesting case studies. many huge brands had this “Multiple Brand” thing in common but I couldn’t find anything that explains this idea for a common man so decided to write one.Multi Brand Strategy — Sounds like a term from a very hard subject but it’s very simple. It means a company that sell products under one or more brands.

We come across many brands, but only a few people might know that all these brands are owned by one company.

Let’s name a few,

Pantene, Oral-B, Gillette, Pampers, Ariel, Olay, Head&Shoulders(…) — owned by P&G

Volkswagen, Skoda, Audi, Bently, Lamborghini, Bugatti — owned by Volkswagen

OnePlus, OPPO, Vivo, Realme — owned by BBK Electronics

Why should I use multiple brands when I can sell directly under one brand name?

The answer is, very simple — it depends.

It depends upon your product, brand and the target audience.

In simple words,

Same Brand — Different Products = to increase brand value, use master brand value to boost sub brand’s sales. (Like Amazon — Amazon Basics, Amazon Prime, Amazon Music)

Similar Products — Different Brands = To Increase The Market Share, To Cater Different Target Audience.

Let’s say TATA wants to sell the world’s most expensive car under brand name TATA Motors, the chances of that car being sold is very very less when compared to launching that same expensive car under its other brand Jaguar.

Or let’s say premium smartphone maker Apple wants to sell the most affordable smartphone something like under $149 or wants to sell the most expensive smartphone like at $6999. they would be able to sell it. But if a brand like Micromax wants to sell the worlds best smartphone at $6999 people won’t even be interested to try it out.

Here’s were multi-brand strategy can help you. Create new brands for different target audiences — A brand dedicated to premium audiences, a different brand for the audience who prefer a more durable version of your goods and one more for a cheap and affordable type. By this way, you can satisfy all types of audiences with the same team, technology & infrastructure.

Advantages.

For consumer products, it helps a lot — When someone is not satisfied with “Brand A” they will switch to “Brand B”. (If A&B owned by same company then its a win)

More brands = More market share — Working on one brand to acquire more market share (becoming a market leader)is more complicated & challenging. With multiple brands its easy to dominate the market or at least easy to break competitors market share.

Sharing all your knowledge & technology — In-screen fingerprint sensor was launched by Vivo but shared between its other umbrella brands. (Umbrella brands — a group of brands under a single hood/umbrella).

More brands = More worth to your business — Brands are also an asset when you have more successful brands, it means your business is worth more. You can even sell one of your sub-brands to your competitors. (Like what Uber did with its UberEats — Zomato has acquired the Indian operations of UberEats for $350 million )

Risks

Lack of differentiation across brands — Many models & features are kind of look-alike between Oppo, Vivo, Oneplus.

Lose focus — Working on multiple brands are overwhelming & complicated eventually losing focus.

Marketing — Spending on marketing to build your new brand is kind of expensive while competing with your own brand is more expensive than that.

Should I follow this multi-brand strategy for my brand?

It doesn’t matter how big or small your existing brand is, all you need is a clear idea about your new brand and how it’s different from the existing one. If you are a new brand trying to establish your business then, I wouldn’t suggest this. But if you are someone who had already established some stable business, then you can venture into new brands.

If your brand has basic infrastructure and a strong team, you can give this a try. Make sure you differentiate your brands with distinctive branding, target a new audience, new price point (premium or vice versa) and most importantly innovate.

End of the day, if you have a very clear idea of what your competitors are doing, and how your products are performing when compared to them, a multi-brand strategy can be a good shot for you.

Previously published here.