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One of the questions that many companies grapple with is which level of branding they should use. The main choices are:
Product branding can lead into product line branding if the product takes on line extensions, as is the case with Future Tide, another example being the Follow Me line of hair shampoos. It can also go further to product range branding, where a number of products or services in a broad category are grouped together under one brand name and promoted with one basic identity. An example here would be Intel's Pentium and Celeron ranges of microprocessors. Whilst generating some economies of scale in advertising and promotion, care must be taken to ensure that the extensions do not step away from the central proposition of the main product brand, and that they do not cannibalise its sales. Corporate branding is where the corporate name is the brand, and here the products tend to be described more in alpha numeric or letter terms, and not have distinctive brand names. Such is the case with BMW. Corporate branding gives each product the strength of the corporate brand values and positioning, and saves a great deal on advertising and promotional spend. It builds up the strength of the corporate brand and its financial value. Corporate branding is very appropriate to those companies engaged in service industries, as their products are more intangible in nature. When consumers cannot see the product, the company brand name helps give them an assurance of quality, heritage, and authenticity. Many Asian companies have taken this route because the commitment and longevity of the company are judged to be of great importance in their countries. One of the great proponents of corporate branding has been Sony Corporation. The late founder and chairman of Sony Akio Morita was quoted as saying, "...I have always believed that the company name is the life of an enterprise. It carries responsibility and guarantees the quality of the product...". House or endorsement branding uses both ideas, and the corporate name is placed alongside the product brand name, as is the case with Nestle's Milo. This allows the product brand to assume its own identity and positioning, but draw strength from the values of the corporate brand, and give consumers the assurance, in many cases related to quality, of the corporate brand. There are a variety of ways in which this can be achieved, with the corporate brand in lesser or greater prominence. House branding also gives some economies of scale in A&P, and helps with the introduction of new products, where it can be very difficult to break into mature markets without the endorsement of a strong and credible corporate parental brand name. One possible disadvantage is where the product is not favourably received and causes damage to the parental brand name. The three methods described above are not discrete. They are actually part of a continuum that can be made use of in the branding process. The unmistakable trend, however, is towards the corporate brand end of the continuum, where with every communication the company gets double messages across, and leverages on the value of both corporate and product brand names.
This review of corporate branding is reproduced from the book 'Strategic Positioning' by Paul Temporal, published by Oxford University Press, September 1999. |
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