How to manage your profile as an umbrella brand

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Umbrella brands are now stepping into the limelight. Here we talk about why, and how best to manage an umbrella brand with a portfolio of sub-brands

There was a time, not so long ago, when most people’s awareness of behind-the-scenes parent brands such as Associated A British Foods, Diageo, P&G, Unilever and the like, was pretty limited. So why are umbrella brands increasingly seeking to create a profile for themselves now? And what’s the best way to manage an umbrella brand model in today’s economic climate?


The history

During the goldrush of brand globalisation, companies both acquired brands and created a bevy of new brands for themselves. “By 1987, Nestle had a staggering 8,000 brands in its portfolio worldwide, with more than 4,000 of them joining the portfolio in the preceding 12 years,” says Aaron Shields, strategic planning director at Fitch. “Not surprisingly, this was costly and by the early ’90s, Nestle had organised them into a handful of ‘power-brands’ to consolidate marketing spend.”

It became a familiar approach, with the umbrella brand almost always positioning itself as the “parent” brand. “That is to say, they provided reassurance to consumers that the brand you were buying from came from a trusted stable, with a good pedigree,” says Richard Alford, managing director at M&C Saatchi. “An obvious example is
SC Johnson Ca family company’), which limited itself to endorsement marks on the consumer facing brand’s advertising.”

The company judged, probably correctly, that nobody was particularly interested in any more detail than that, says Alford. “Hence, a couple of seconds at the end of a 30-second TV ad was enough?’

Not all umbrella brands came about through force of circumstance, however, and nor did they all decide to stay sitting in the corner. “Take the obvious example of Virgin with its very clear and powerful umbrella branding,” says Will Goodhand, head of brand and communications at TNS UK. “From the offset, it used the Virgin name to allow it to spread brand equity whenever it moves into a new area – Virgin Money, Virgin Mobile and so on.”

Similarly, the Shell brand owns many brands with different names, but they are all prefixed by the Shell name, points out Greenwich Design MD Simon Wright. Finally, there are the umbrella brands that sit somewhere in between these overt and covert approaches, says Wright. “Kraft and Mars are good examples of this hybrid umbrella brand model. They have many sub-brands, but are also well known consumer facing brands in their own right.”

So what’s changed?

Two things have changed in the past five years, says Alford, both of which have resulted in growing numbers of traditionally “behind-the-scenes” brands having a profile in their own right. “The first is the widespread adoption of digital media as a peer-to-peer, non-moderated medium for complaint, discussion, rumour-mongering and general mischief – as well as for brand lovers to air their affections.”

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People wanted to know more about where their products were coming from, he says. “Not just literally, but emotionally. What kind of companies were they? What were their values? What drove them? What were their policies in contentious areas – child labour, `McJobs’, GM? A simple endorsement stamp at the end of an ad was no longer enough. Corporations realised that if they were not communicating about themselves, others would be.”

But this wasn’t simply a defensive mode, he insists. “Indeed, the second great change was a new generation of senior marketers and CEOs who embodied corporate confidence. They wanted to dispel the notion of shadowy behemoths, guarding only shareholder returns and share of market. They wanted to actively open up about company philosophy and personality to a wider audience. They were proud and wanted to be loud,” says Alford.

“A good example is P&G, for decades relegated to a tiny mark somewhere below the ‘net contents’ designation on the label, it found new confidence at exactly the right time;’ he says.

Lida chief strategy officer Matthew Heath agrees that corporate reputation management has been the driving force behind the growth of umbrella brands.

“In an age where consumers are far more active participants in the marketing process, there is less sense of any brand owner being a trademark owner only. The recent horsemeat debacle is a classic example of how consumers are demanding visibility of what goes on behind the scenes
of manufacturing and how well placed their trust is,” says Heath.

No wonder FMCG brand owners in particular are raising their heads above the parapet to provide more coherent, values based narratives as to why they have the stable of brands that they do, he says. “Even those with a seemingly wide brand stretch across different categories are seeking the power of a bigger story, like Unilever’s `creating a better future every day’.”



The trend is financially driven, too, he adds. “Maintaining a brand, particularly a global one, is a massive ongoing investment. If umbrella brand owners can help to provide an effective story around things such as common values, approach to CSR and NPD commitment, then this can help avoid a situation where every brand is also creating its own back story and value set.

“It could even be that as umbrella brands are imbued with more meaning they will help to provide a better context in which individual brands can be marketed, to the extent that each individual brand needs a little less support.”

It can certainly lower the cost of launching and promoting new innovations, believes 1HQ CEO Mark Artus. “A strong umbrella brand can add serious clout to a new product brand simply through association. Consumers who trust the umbrella brand are more likely to trust the new brand, a key hurdle to overcome when reaching a new market.

“Take SCA,” says Dragon Rouge chairman Dorothy MacKenzie, “which has built a strong reputation for performance in sustainability. This can be leveraged to underpin and add credibility to the company’s broad product range.”

The benefits of multiple brands

If all this is true, why not focus entirely on the umbrella brand as, for example, Nivea does – or at the very least take a “less is more” attitude to sub-brands? Because, says Wright, there are benefits to multiple brands, from cost to effective targeting.

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“If you are a coffee brand with a supply chain taking you back to the coffee plantation, it makes sense to optimise that supply chain and create more than one brand and more than one type of coffee product. By creating a variety of sub-brands with different price points and target audiences, it becomes easier to increase overall market share”

“Different people have different needs -and it is this fundamental truth that the multiple brand approach caters for,” adds Goodhand. “Even the same person may have different needs depending on the time and place or indeed their mood.

“Think of the beer category. The contrast between what a real ale and a lager drinker may be looking for is obvious, but depending on the nature of the drinking occasion, the requirement – and the brand choice, even among lagers – will vary dramatically. Goodhand‘s company has just conducted a study asking drinkers to reveal in real-time on their smartphone why they’re choosing the drink the are. The results are dramatic.

“In ‘armchair philosopher’ mode before going to the pub, they quoted ‘price’, ‘special offers’ and ‘trying something new’ as key influencers. Capture the reason for their drink choice in the moment, however, and `well known brand’ is streets ahead of any other influencer. It therefore makes absolute sense to try to meet as many of the consumer’s needs as possible – and in doing so protect your overall brand’s equity

against changes in these consumer needs.” If you’re too niche or focused and the game changes, he says, there’s the potential to be left very vulnerable. “For a great

example of how you can diversify and satisfy differing needs, look no further than confectionery brands such as Cadbury.”

Artus claims people enjoy the decision making process more when they are presented with a greater number of choices. “Choosing lets us exercise and validate a sense of individual freedom and autonomy over our environment, which is intrinsically motivating. So although there is a threshold at which too wide a range of choices can become paralysing, it’s clear that the ability to choose is rewarding. How many of us would feel as happy choosing between Unilever and P&G in the detergent aisle versus our beloved Persil, Ariel, Surf, Bold, Daz, Comfort, Lenor and Fairy?”

The challenges

Inevitably, along with the upside of managing multiple brands, come some serious challenges. One brand may wind up as a poor relation to the core product, for instance, with other potential problems including sales force conflict and cannibalization issues.

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There’s also the possibility of the marketing department struggling because of internal confusion and their efforts being spread too thinly. Harvesting innovation across brand silos is a particularly tough challenge, believes Fitch’s Shields. “In a single brand system, all appropriate clear thinking can be applied to the brand. In a multi-brand scenario, great ideas might be carried with one team, but then abandoned and never see the light of day in another part of the owned portfolio.” The solution to all these problems, believes TNS UK’s Goodhand, lies largely in customer insight. “It can help steer a path through the challenges of ensuring one brand does not unduly cannibalise another and that diversification is created without diluting the positioning of any of the brands.



Indeed, operating a strong portfolio with an insight-driven approach gives you the opportunity to attack the soft underbelly of your competitors, stealing their share rather than cannibalising your own.”

Alford adds that companies that focus on positioning the various brands distinctly, even when the underpinning technology is similar or even the same, are less likely to face potential problems.

“I remember being told – who knows if this was true – that Daz was always the previous version of Ariel. So Ariel got the whizzy new technology and Daz was basically old-Ariel. It’s a kind of organised cannibalism,” he says.

The whole point of sub-brands, he says, is to target specific segments and, as consumers become more choosy, to ensure there is enough room for well positioned brands to work alongside each other.

If, on the other hand, a sub-brand has no real point of differentiation to the other brands in the family, or is appealing to the same target audience, they are likely to get lost along the way.

Ditching a sub-brand

Branding is a Darwinian process and the weak simply don’t survive, says Artus. “Some become irrelevant and others naturally come to the end of their lifecycle. At this point, it’s important to cut the sub-brand loose. The ability to ditch irrelevant brands and focus attention elsewhere is essential to the parent company’s product evolution,” he says. “However, there are many brands that fail due to neglect. Identifying core brand assets by using relevant tools is one way to ensure that your brands stay relevant to the ever changing market conditions.”

Others argue that a more proactive stance is required to work out which brands, if any, should be ditched. Yet surprisingly few companies analyse how many brands they really need within the portfolio, and the manner in which those brands are combined or kept separate in the consumer’s mind – in other words, the “brand architecture”.

Both P&G and Unilever achieved a “less is more” strategy as a result of doing just this. Years ago, they had more than 2,000 brands between them, whereas today they make most of their profits from a combination of 30 brands.

But, warns Artus, such ruthlessness would not be wise for all umbrella brands. “Manufacturers would love nothing more than to have an aisle in a supermarket devoted solely to their products, but this is unlikely to ever happen. Instead, by creating strong sub-brands, they can dominate vast retail spaces with a range of their products – in a way, creating their own mini aisle.”

For many businesses, then, having a strong umbrella brand in addition to a portfolio of clearly differentiated sub-brands means marketers can both have their cake and eat it.

Tips from the top

1.Umbrella way of showing la brands can be a you are transparent and open

But be prepared to communicate fully about the story of your brand, make it engaging and ensure you are consistent in content and tonality.

2. Be clear about the consumer benefit of the umbrella brand.

Is it there to drive emotional attachment to the portfolio brands? To guarantee provenance and authenticity? Or simply as a stamp of quality?

3. Understand how your / umbrella brand fits with your portfolio brands.

Do they have the same personality? Be sensitive to the interplay. For example, it may not be necessary to overtly project the umbrella brand if the cohesion and linkage is strong with a particular sub-brand. With other sub-brands in the portfolio, it may need greater prominence to achieve cohesion.

4. When rationalising about portfolio management, make sure you look at the potential of each sub-brand: does it stretch the reach of your portfolio in terms of target, occasion and emotive positioning?

Don’t rationalize based just oncurrent sales performance – how does it enable your portfolio to stretch in future? Consider retaining a brand with a unique personality – sales may be down to factors not all related to the brand’s inherent qualities.

Dos and don’ts

Do remember that some brands may not be highly profitable but still do a job – keeping out local competitors, acting as a price fighter or providing a vehicle for new ideas.



Do bear in mind that joining up the dots between the individual brand and the umbrella brand can help with crisis management.

Do accept there are times when the parent company should not take the limelight. How many of us would have the same enjoyment of Innocent smoothies if “a produce of Coca-Cola” was splashed across its packaging?

Do, remember that promoting the umbrella brand can ease the transition of acquiring new brands in markets where the parent company is already operating.

Don’t assume that just because another parent brand achieves success with their particular approach to umbrella branding, it will bring you riches. There is • no one-size-fits-all model.

Don’t ever think that the umbrella or corporate brand alone is enough to successfully communicate the product’s value to consumers. Sub-brands must always have their own unique (entity, which channels some of the umbrella’s characteristics.

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