Know-How Exchange : Branding

Being from the Procter & Gamble school of "brands are king; corporate is irrelevant," my first reaction was that you're swimming upstream and probably misguided in your effort. But then I remembered a very different situation at one of my major clients -- E.I. DuPont de Nemoirs.

Despite the number of DuPont brands -- including many ingredient brands -- that were marketed under their own names, we always tried to include reference to the DuPont name because it had such positive connotation among just about all of our target audiences.

DuPont means applied/advanced science, miracle products, great quality control, solid technical support, and a whole host of other things that helped us position the individual products. We'd have been foolish to not draw on that corporate heritage.

That said, if you are not starting with a strong corporate image already, it may not be worth the long, steep climb to communicate a corporate positioning. You might be better off focusing on the individual brands.

If you'd like to discuss offline, contact me via the email address in my profile. I've actually done a lot of work in the corporate-brand vs. individual-brand arena.


(Note: Even within DuPont, not all brands found the DuPont "parent" image helpful. Brands selling into fashion/design markets -- like Lycra, for example -- were perceived as less fashionable when we associated them with the "scientific" DuPont name. You will want to be very careful as you tread on individual brands' images.)

Apple

All their products are easy for the average consumer to own and use!

Think of corporate branding as a financial and administrative tool, and individual unit brands as marketing tools. This will help you discern the advantages of each.

Benefits of corporate branding:

1. Shareholder value. One of the chief reasons for corporate branding is to raise awareness of the parent brand, through advertising, web and other media. Increased awareness, when applied to a well-managed company, can result in increased share value, the holy grail of executive performance and job security. Keep in mind that investment managers, who are big share buyers, need to explain to their investors where investments are made; it is easier for them to explain and get support for investments in known corporate brands.

2. Increased sales. Customers who are loyal to one brand are more easily persuaded to transfer their loyalty to associated brands, if you help them make the connection, which a corporate brand can do. (On the flip side, if any of your brands has an unfortunate public image, that can injure associated brands.)

3. Successful product launch. When a corporate brand is known, it make the introduction of a new product brand seem more substantial, and is more likely to increase the results of launch publicity in both trade and consumer press. This translates into quicker consumer take-up in the marketplace.

4. Talent. Obviously, broad brand groups attract the best talent, and they make recruitment of the brightest candidates so much easier. Less obviously, corporate branding helps an organization retain its own best talent. Capable, ambitious careerists can look for advancement within the fold, particularly when benefits are not lost when transferring within the family.

5. Growth. If your corporate growth strategy includes acquisition or new product launch, doing so under the banner of a corporate brand “makes sense” to the consumer marketplace, to the media, and to Wall Street. Often, this has a tendency to remove obstacles as most often, all the associated players want (or expect) the deal to work because of the corporate brand involvement.

6. Corporate social responsibility. There is pressure on multi-brand groups to be good corporate citizens, but individualizing solutions by brand can maximize the expense while minimizing the good results and fracturing the potential good publicity. A parent brand can consolidate some of the charitable/philanthropic participation into a higher-profile activity that shines a positive light on all the brands. (Of course, individual brands still need some control over a portion of this in their specific markets.)

7. Political and financial influence. A parent brand is another entity which can persuade local and national political leaders according to its needs; if your company needs the attention or cooperation of Senators or Members of Congress on a specific committee – which might involve representatives from other states – the value of a corporate brand can be priceless. Also, a parent brand can improve banking leverage, which is helpful when individual units need financing solutions.

8. Consolidation. A parent brand makes it easier to consolidate common administrative functions – payroll, 401(k) administration, computer facilities, etc. – and if there is any consolidation your corporation has not yet achieved, the potential savings in this category alone could offset all or some of the cost of corporate branding.

9. Sale of individual brand units. A strong parent brand makes the sale of a subsidiary more attractive and potentially more lucrative. Whether a unit needs to be divested for poor performance, or a top-performing unit is sold to raise capital for the others, the corporate brand helps to get a premium price.

The best application of corporate branding is to unify, but not overshadow, individual brands. Excellent examples of this include Proctor & Gamble, General Mills, ConAgra, Unilever – all solid, high-profile corporate brands, but each promoting their individual brand units with absolutely independent identities in the consumer marketplace, which is vital to the success of each.

I hope this is helpful in formulating your thoughts and presentation. Thanks so much for coming to the Marketing Profs forum.