Imagine possessing the power to control an empire of 50 provinces? That’s a lot of power right. That is exactly what it feels like to operate on a multi-brand strategy.
Nestlé is a good example of a multi brand company, with close to 2000 brands, including KitKat, Nespresso and Gerber. This allows Nestlé to appeal to a wide range of customers, from children to adults.
Multi-brand strategies is an effective strategy for businesses that want to grow their market share and reach new customers. However, it is important to manage the different brands carefully to avoid confusion and cannibalization.
In this article, we will take a deep look at multi-brand strategy and explore the benefits of running multiple brands.
Also, this article will explore some multi brand strategy examples and companies with multiple product lines. Of course, we will discuss the disadvantages of multi branding strategy, because no strategy exists without its cons. Let’s get right into it.
What is Multi-Brand strategy?
A Multi-brand strategy refers to the practice in which a single company manages a portfolio of products or services with different brand names.
With this approach, such a business aims to target multiple customer segments, as its services or products meet the needs of a diversifying market.
One good example of a company that leverages multi-branding is Nestlé. Nestlé owns over 2,000 brands, including the famous Nespresso, Nescafé, and Kit Kat. This allows Nestlé to reach a wide range of consumers with different products and services.
Another example of a company with a multi-product branding strategy is Meta (formerly Facebook). Meta owns Instagram, WhatsApp, and Messenger, all of which operate as separate brands. This allows Meta to target different audiences with each brand.
Finally, FedEx is another company that uses multi-product branding. FedEx offers a variety of shipping services, each with its own brand name. This allows FedEx to compete in different markets and appeal to different customers.
Most companies with multiple product lines may choose to include the parent name into the other brands like FedEx, with sub brands such as FedEx Express, FedEx Ground, FedEx Freight, FedEx Services, FedEx Logistics.
Also, there is another option of not including the parent name of the brand into the sub brands, as with Nestle – Poland Spring, Maggi, Milo and Kit Kat.
Benefits of Multi-Brand Strategy
Like every other strategy, multi branding also comes with some cons and disadvantages. So, before you say yes to any system or strategy, ensure you way the benefits against the challenges. If you are comfortable with the risks involved, you can venture into it. Let’s discuss the advantages of the multi-brand strategy system.
1. Build Brand visibility
When you create and market multiple brands, your products take up more shelf space and are seen more often by customers. This increased visibility makes your brand more trustworthy and recognizable which can lead to customer loyalty.
2. Position yourself as a leader of though
By owning and marketing multiple products, you can occupy more shelf space than your competitors. This makes your products less competitive and positions your brand as a thought leader in your niche.
The level of visibility that you gain from operating on a multi-branding strategy gives you more market power and makes you a more credible source of information.
3. Increase Customer Base
Another important advantage of running a multi-brand strategy is the opportunity it creates in reaching diverse customers. Creating multiple products give you wider reach which if properly managed can increase the overalloverall awareness of your company.
4. Risk Diversification
Diversifying your business by having multiple brands can help to reduce risk. If one brand experiences problems, your other brands can continue to generate revenue and maintain overall business stability. This can help to prevent your company from becoming too reliant on the success of a single brand.
Disadvantages of Multi-Brand Strategy
1. Lack Of Focus
One of the challenges faced by having multiple brands is the problem of lack of focus. Because you are faced with different tasks to perform at the same time, it may become overwhelming to concentrate on a particular brand. This can greatly affect the performance of the neglected brand. If not properly managed, it could affect the entire brand.
2. Difficult to Manage
It’s difficult to manage multiple brands effectively, as you need to ensure that they are all aligned with your overall brand strategy. This is one of the major challenges of multiple branding.
3. Tendency of Substandard Products
When a company launches a new product under a multi-brand strategy, consumers may be more critical of its quality because they have come to expect a certain level of excellence from the company. If the new product does not meet these expectations, it may be quickly dismissed and receive negative reviews. This could damage the company’s reputation and lead to decreased sales.
4. Brand Confusion
A disadvantage of a multi-brand strategy is that it can lead to brand confusion. This occurs when consumers are unsure of which brand to choose from a company’s lineup of similar products. Too many options can lead to consumers becoming overwhelmed and frustrated, and they may eventually choose to leave the company’s umbrella altogether in search of a more straightforward choice.
Tips to Manage Multi-Brand Strategy
A multi branding strategy, if well managed, can lead to the rapid increase of the overall success and growth of the brand involved. However, if not popularly managed, even research the smallest mistake and rub on the reputation of the other brands.
Here are 5 tips to help you manage your multiple branding projects.
- Know your limitations
- Research the audience for each brand and draw a customer avatar
- Set realistic and smart goals for your marketing journey
- Draw a distinct and clear brand value for each of your operation
- Always research the market to stay ahead of your competitor
Multi-Brand Examples: Companies with Multiple Product Lines
Microsoft is a great example of a multi brand company with diverse organizations linked together offering several services. Currently, Microsoft operates in five business units: Online Services Division, Server and Tools Business, Microsoft Business Solutions, Microsoft Office.
According to Investopedia, the 7 brands owned by Microsoft are:
- Skype Technologies S.A.R.L
- ZeniMax Media
- Nuance Communications
L’Oreal is a well-known beauty brand, built on the multi brand strategy system. Its major divisions include consumer products, luxury items, professional options and active cosmetics,
Some of L’Oréal’s Brand Portfolio, according to Wikipedia, include:
- Carol’s Daughter.
- Créateurs de Beauté
- L’Oréal Paris.
Kraft is another great example of as a company operating within the multi brand strategy. It is a reputable company providing quality food-based products like coca-cola does. Although, Kraft is specialized in a particular niche.
Some brands owned byKraft are:
- Double Fruit
- Maxwell House
4. Procter & Gamble (P&G)
P&G is another company that has made noble name using the multi brand strategy. They produce multiple products ranging from Dishwashing to Beauty care, Healthcare Products to Household, etc
Some Brands owned by P&G according to Wikipedia are;
- Fresco bar soap
- Ivory bar
- Cheer laundry detergent
- Old Spice
- Daz detergent
- Align probiotics
- Crest toothpaste
- Always pads and menstrual hygiene products
- Tampax tampons
Other Companies with Multiple product lines
- Nike Inc
- The J.M. Smucker Company
These are just a few examples compared to several others in existence.
1. What are the four 4 types of branding strategies?
The four types of branding strategies are:
- Corporate branding: where the company name is used as the brand name (e.g. Coca-Cola)
- Product branding: where each individual product has its own separate brand name (e.g. Nike’s different product lines like Air Max, Flyknit, etc.)
- Generic branding: where products are sold under a generic or common name (e.g. supermarket own-brand products)
- Personal branding: where an individual (e.g. a celebrity) is used to promote and market a product or service under their own name.
2. Why use multi-brand strategy?
A multi-brand strategy may be used to target different market segments or appeal to different customer preferences. It also helps to spread the risk of any product failures or negative publicity across different brands, rather than being solely associated with one brand.
3. What is the difference between single brand and multi-brand strategy?
The main difference between single brand and multi-brand strategy is that with a single brand strategy, all products are marketed under the same brand name, whereas with a multi-brand strategy, a company may have different brands for different products or product lines.
4. What is a disadvantage of multi product branding strategy?
A disadvantage of a multiproduct branding strategy is that if one product is unsuccessful or suffers negative publicity, it can negatively impact the reputation of the entire brand, including other successful products under that brand.
Also, managing multiple brands can require more resources and may lead to cannibalization of sales between products under different brands.
Conclusion on What is Multi-Brand Strategy?
Multi brand strategy is a marketing approach that involves a company offering a range of different brands under its umbrella, each targeting different customers with unique identities and positioning.
As discussed in this article, this strategy allows companies to cater to diverse consumer needs, build brand equity, and increase market share.
It also enables efficient resource allocation, economies of scale, and risk diversification.
However, if you must adapt this strategy, you must carefully manage your multi-brand portfolio to ensure brand differentiation, avoid cannibalization, and maintain consistent quality standards.