Page 264 - GLOBAL STRATEGIC MARKETING

The brand behind the brands

May 2014
The sheer cost of maintaining brands is forcing a rethink of where to invest

marketing dollars.

With empowered consumers increasingly aware of the corporate brands behind
products, marketers need to rethink the relationships between their flagship identity
and the brands within. McKinsey consultants say this will require coordination
between different parts of the business and a smarter use of marketing budgets.

Brand architecture used to be neatly divided into two schools. Those favoring a
dominant corporate brand (such as Amex or Virgin) chose the Branded House
model, while others opted for the House of Brands, typified by numerous sub-brands
with little or no mention of the company behind them (for example, General Mills and
Reckitt Benckiser).

A brand network enables companies to present a consistent brand story
across all their products and services, and instilling a strong set of brand
values into every customer experience.

Several emerging trends have rendered these concepts oversimplistic and outdated.
Firstly, the ubiquity of information has lifted the veil from the company behind the
product, and therefore its brands are becoming ever more interlinked. As a result,
enlightened customers are becoming more demanding and discerning in their
purchasing decisions. Secondly, the sheer cost of maintaining brands is forcing a
rethink of where to invest the marketing dollars. And finally, as companies more
frequently acquire strong brands with long histories in new geographies, it gets
harder to simply or immediately absorb these into the master brand.

In response, companies are increasingly turning to a “brand network” model
encompassing more differentiated and tailored relationships between corporate and
product brands.

Corporate brands are taking greater prominence in an attempt to project
organizational values, convey trust, and build brand equity with multiple stakeholders.
Recent ads by Apple feature the tagline “Designed in California” and focus on the
company, not its products. And FedEx has introduced a more consistent corporate
umbrella across all its sub-brands, including its acquisition of Kinko's, now known as
FedEx Office.

Read the full piece on the Economist Lean Back blog

How B2B companies talk past their customers