Umbrella brand or parent company?

Umbrella brand as a concept sometimes confuses marketers themselves. It is worth knowing what it is in order to consciously shape the structure of your business.

What will you learn from the article?

Have you ever wondered what exactly the umbrella brand? Or are you interested in the benefits of using it and in which industries it works best? For those who want to understand how to effectively manage brands and build their image, we have something special.

In today's blog post we take a closer look at the strategy of the umbrella brand. We will discuss its definition, benefits and examples of its use in various industries, such as food and clothing. We will also analyse in which situations the implementation of umbrella brand is most cost-effective, and when it is worth considering an alternative approach.

Curious to know how the development is going umbrella brand and what steps should be taken to effectively create its image? Or perhaps you are wondering how to deal with an image crisis umbrella brand? The answers to these and other questions can be found in our article. We invite you to read and discover how umbrella brand can become a key element of your business strategy!

Contents:

What is an umbrella brand? 

Umbrella brand takes its name from the shape of the umbrella, which consists of the tip and the radially branching downward parts of the frame. The structure would look similar if drawn out on a piece of paper umbrella companywhere different products are produced under one brand. Such a model is also called family branding, because the products form, as it were, one family under a common 'name'. 

Most often, the confusion around this term is due to a misunderstanding of the difference between an umbrella brand and a corporation. The latter also has several or several dozen brands in its portfolio. Some of them may be umbrella brands. Most, however, do not refer to the name of the corporation, which in this case is usually in the shade. Several types of breakfast cereals and drinks have different names.

It is not always clear from the consumer's point of view that there is one producer behind everything. The opposite is true in the case of an umbrella brand, the main feature of which is to operate in several fields under the same name.

Umbrella brand - definition

Umbrella brand applies to all products promoted and sold by the company under the same brand. As a rule, the products or services covered umbrella brand are characterised by high similarity or similar purpose. It binds together a number of similar products, so it carries benefits such as:

• reduction of promotion costs,
• facilitating the entry of new products on the market,
• increasing the recognition of the brand and all the products that "protect" under its umbrella.

Umbrella brand is characterised by the fact that the company focuses its attention not so much on creating a brand image for a specific product, but on building a strong brand image for the whole company. It then encapsulates the entire business and social image of the company. Umbrella brand aims to cover as many of the products or services offered as possible. The brilliance of one popular product will be reflected in the others. So there is a good chance that they will also enjoy higher sales.

Umbrella brand is a strategy that only makes sense when awareness of its existence in the market has already reached a high level and the brand itself has a very good reputation.

Umbrella brand - quotes

Value umbrella brand Donald Trump, who runs a number of businesses signed with his name, sees it perfectly. "Using my name on buildings carries a guarantee of the highest quality and costs at least $5 million-and that's just for the name. The developers know very well that this will pay off for them. The building will meet the highest, my, standards. When I recall the line from Shakespeare's Romeo and Juliet - "what does the name mean?"- it makes me want to laugh."

Mark Morgan also recognises the value of umbrella brand, stating that "A strong brand is one of the most valuable assets a company can develop. It not only serves to differentiate a particular company from its competitors. It also helps customers and other stakeholders to bond with a company and its product offering. It is a medium that builds loyalty and contributes to the sustainability of any organisation."

Philip Kotler, on the other hand, advises that "Brand line extension can be used when the company can use the trust it has gained and save money that would otherwise have to be spent on making the new brand name and offer recognized by customers."

Nevertheless, as the aforementioned Donald Trump put it: "We all know the power a brand can have, especially if it is backed by quality." It is the superior quality of the products on offer that is the prerequisite for the use of umbrella brand. For the quality of one product translates into opinions on the quality of another. One weak component, can damage a whole family of products.

A similar relationship was also noticed by Warren Buffett, who warned that "It takes 20 years to build a good reputation, and only 5 minutes to destroy it."

What benefits of using an umbrella brand? 

Umbrella brand works well when the brand is initially known and respected by customers. When a company releases another similar product, it can use it instead of going through the tedious process of building up another brand and its awareness among the public. This saves money if only considering packaging or logos. Launching a similar production in one factory is much easier than launching a completely new company.  

Also, processes in umbrella company are already optimised - the next brand can benefit from this. The distribution channels or models already in place make it easier to sell the next product. Products can be of better quality because the manufacturer only has to work once on improving the recipe, a new logo or packaging. He does not have to outsource these tasks repeatedly, as would be the case if he produced products under many different brands. A customer who has already been convinced by a brand does not have to go through the whole decision-making process all over again. From overcoming objections to making a purchase decision. 

Umbrella brand - examples in the food and clothing industry 

The easiest way to explain what is umbrella brand, by way of example. Several such companies can be found at the intersection of food and clothing and interior design.  

• Marks & Spencers - the British manufacturer of clothes after many years began to introduce more and more food to stores. Initially, they were premium cookies or teas, but soon Marks & Spencers supermarkets were established. Today, the company limits the clothing branch of activity and focuses on the food industry. 
• Tchibo - Tchibo coffee producer made the opposite move. Instead of limiting himself to coffee, he started selling coffee machines and accessories, and today also selling clothes and anything else that can be useful at home. 
• IKEA - Food is a small part of the sale of the IKEA brand. But it's the Swedish meatballs or drinks that build the brand image. Hearing about them, many people try them personally, and then return to the market during renovation or moving. 

Opportunities offered by umbrella brandThe example of the Marks & Spencers brand shows well. The situation in the clothing industry today is challenging. Simplicity and restraint are in vogue and customers have a huge choice like never before. Capitalising on the sentiment of the British clothing company and the growing trend for high-end food has allowed the company to minimise losses and, in part, to re-brand itself. In the event of trouble, such action is much easier when the company has umbrella brandand underneath it many different goods or services. 

In which industries the umbrella brand strategy works best?

Utilisation strategy umbrella brand means in practice placing products on the market , of all the company's products under the same, already known brand. Most often it is used by companies that have already managed to create a clear image. Then they can afford to reduce marketing costs, which would certainly be associated with launching a completely new brand on the market. It is also an ideal strategy for family businesses whose products are signed with the name of the owner or designer.

Both global giants and small artisanal companies benefit from brand-parasols. This is because widespread brand awareness can lead to almost instant acceptance of a company's offering by the market, retailers and consumers. Umbrella brand it is worth putting in:

• family businesses,
• brands offering luxury goods,
• industries in which, due to strong competition and the lack of clear attributes, the introduction of new brands is much more difficult.

Umbrella brands are most often found in industries offering basic food products, clothing, cosmetics, household chemicals, telecommunications services and all goods that are purchased mainly due to the characteristic logo or name on the label.

The use of umbrella brands can be a problem, for example, in the pharmaceutical industry. According to the Office of Competition and Consumer Protection and the Main Pharmaceutical Inspectorate, activities linking several products under one brand may lead to misuse of these preparations. As a consequence, it may have negative consequences for the patient's health.

Is the implementation of an umbrella brand always beneficial?

The undoubted advantage of umbrella brand is that all marketing resources are focused on supporting the entire 'umbrella', i.e. all branded products at the same time. On the other hand, this can also represent a limitation in marketing communication. Why? Because when receiving the messages sent, customers relate them to the entire group of products or services offered.

With the help of umbrella brands, it is much easier to build the loyalty of customers who are used to a certain quality. Yeah target group They are more likely to be tempted by new products signed with a well-liked brand. Moreover, regular customers will not feel the need to experiment in looking for substitutes from competitors.

If we want each product offered to have a separate and distinct identity, the strategy umbrella brand will absolutely not work. On the other hand, if our brand is a company and its value is the diversity of its offer - creating an umbrella brand will be the most effective and efficient way to win the hearts and wallets of the target group. Umbrella brand is also an ideal idea for family businesses when all products can be branded with one name.

The umbrella brand strategy is also not a way to create leaders of specialized categories, so if your product is innovative in some way and clearly stands out from the competition, better create a separate brand for it, instead of covering it with an "umbrella" under which there are other products.

Deciding to build umbrella brand one thing must be borne in mind. While by design and name it protects all the products clustered underneath, equally, negative reviews damaging the reputation of one product can infect the image of the others.

Step by step umbrella brand strategy

A company successfully sells one product. The quality it has developed enables it to introduce another product under the same brand, then it creates another, and so on. This is how the idea of umbrella brands. Umbrella brand has far more advantages than disadvantages, so it is worth considering this solution. Before proceeding, however, it is worth considering how to neutralise the disadvantages of umbrella brand. Above all, we must take into account the risk of brand dilution. This applies when the product categories offered are different. For example, when a juice brand wants to market cosmetics under the same name. Putting in one umbrella brands offering radically different products can leave consumers feeling confused. They will stop 'sticking' brands in their heads and will not understand why the goods in question are sold under one trademark. In such a case, a better solution is to create a completely separate brand.

An effective way to avoid the problem of brand blur is to find original, different characteristics of the products / services that will set the boundaries. These can be psychological values or consumer needs. Descriptive names will also be a method of distinguishing between products.

Introduction umbrella brand to the market requires an appropriate strategy. Brand strategy it is the foundation of effective marketing that protects it against crises. The goal of the strategy is to increase brand awareness, develop good associations with the company (image), promote a product or service, build a solid advantage over the competition, and as a result increase sales and generate high profits.

Strategy development is demanding, time-consuming work - creative and analytical. A strategy should be a well-thought-out, structured map that leads to coherent, effective action. It must include a mission (i.e. a basic assumption about the functioning of the company - what it aims to achieve, what needs it wants to satisfy), objectives (specific, individual for the brand, in line with the SMART principle), market tasks and a marketing plan. What is important in a strategy is to find a unique, individual set of characteristics that will differentiate the company in the market. In the case of umbrella brandsj one idea can be used - some kind of common thought for all brands that will bind them together.

How is the development of the umbrella brand going?

Whether the created umbrella brand succeed in the marketplace depends on how we manage it. Brand development is a complex process that requires adequate preparation, a well thought-out plan and constant monitoring of the changing situation.

The brand development process begins by establishing the main elements of the strategy (such as the brand's mission, its objectives and market tasks). This is followed by a comprehensive market analysis. Why is a study of the environment so important? Because failure umbrella brand can negatively affect the parent company, which will lose the trust of loyal customers and its stable position in the industry. Above all, market analysis should involve detailed, reliable consumer research. Creating a profile of a potential customer will enable the selection of appropriate marketing tools, communication channels and other elements important for brand development. The customer profile should include the customer's demographics, interests, likes, preferred communication channels, goals and values.

The advantage of the umbrella brand is that it is easier to enter the market. Operating under the brand of the parent company, which has a stable position on the market, is known and appreciated, reduces the risk of failure caused by low consumer interest in the brand. However, we should remember that no brand will be successful in its industry if it is not unique in its own way. It is important to find something that sets the company apart from the competition. A meticulous analysis of the competition - its characteristics, language and communication channels, created messages, marketing and PR activities is helpful in this.

Another important stage in the development of the brand is the creation of a trademark. A trademark is any sign that distinguishes a product or service from the competition. It can be a logo, name or special graphics. In the case of the idea of an "umbrella", it seems most logical to use the name of the parent company - different products are sold under the same name. To differentiate the brands a bit, we can use the form of sub-brands - duplicating the main name and adding qualifying names to it. The third option is to combine both solutions - the company offers products that come out under the mother's brand name, but also produces sub-brand goods - they have different names, but each product has the mother company logo or a different element is added to the main name.

How do you create an umbrella brand image?

The development process is also image creation brand. One of its elements is the visual identification system - i.e. colors, fonts, text and infographics style. Identification may be identical to that of the parent company. A good solution for companies that want to produce goods from various industries is to distinguish the umbrella brand from the mother brand by using only the best of the main product - e.g. we leave the font style, change the colors.

Development strategy is a long-term activity that requires constant monitoring. A sound assessment of the individual steps and a detailed analysis of the changing market situation will facilitate the introduction of possible changes that will drive development and thus lead to a umbrella brand to success.

The image crisis of the umbrella brand - how to deal with it?

A crisis can affect any business. Sometimes all it takes is a minor stumble to cause a wave of outrage that damages a company's reputation. In the case of umbrella brand Unfavourable feedback can negatively affect the image of the parent company. Why? Because the 'umbrella' is identified with the mother company. It is closely linked to it. The consequence of such a situation can be a decline in market position, the loss of many customers and a reduction in the company's attractiveness in the business context - less chance of fruitful cooperation with important contractors.

When a crisis occurs, you need to react quickly and implement crisis management that will help you contain the situation and avoid the impending disaster. In this case, there is no time for spontaneous, chaotic movements. A well-thought-out strategy is important to minimize losses and enable a quick return to the pre-crisis state. It is important to make decisions efficiently and to be flexible and accountable in adjusting them to changing circumstances. You cannot leave a crisis on its own. Such action will trigger a wave of criticism. The crisis will grow to enormous proportions and will negatively affect the reputation of the entire company - in the worst case it could even lead to its collapse. So how do you deal with the crisis?

Let's start with the fact that every trader should prepare for different situations. It is worth thinking about it at the stage of planning your development strategy. The key is to list all potential crises and create exemplary patterns of behavior. A detailed scenario is the foundation of an action plan in the event of a crisis - it will facilitate coping with a crisis situation at every stage of its development.

Crisis management process should start with appointing a professional staff of experienced employees with appropriate knowledge and skills to manage a crisis situation. The team should develop a management strategy and define tasks for individual group members that will allow them to properly react in specific situations. Its task is also to communicate with customers and the media on behalf of the company.

The quality of communication is of great importance. Employees should speak with one voice, while remaining open and honest - the environment will quickly sense the falsehood. They should create coherent, logical messages, maintain one position on a given issue - a manifestation of professionalism. It is important to issue press releases on an ongoing basis, create clear messages and maintain a high personal culture. Under no circumstances should the blame be shifted to third parties. The way to quickly resolve a crisis situation is to admit your mistake and declare that the situation will improve in the future. If the company finds it guilty and apologizes, people will forgive it faster and forget about the whole thing.

What instead of an umbrella brand? 

Umbrella brand is often created when a company expands into another field. Sometimes corporations that started out as a company producing just one thing bud over time. However, the opposite also happens. It can happen that a lifestyle brand launching products in a narrow new category does not find understanding among customers.  

It is worth mentioning here, for example, the activities of publishers who had projects to expand the Playboy, Cosmopolitan or Glamor brands to industries such as clothing or food. These are examples of a situation where the umbrella brand has failed. The product is too far from the starting point and is not associated with the appropriate quality. Thus, it has a negative impact on the image of all goods sold under a given brand.

Before deciding to start a sub umbrella brand, it is worth taking a good look at the legal aspects of the new field of activity. And this is before you even start marketing campaign if rebranding. The industries affected by the restrictions are not numerous. However, it is worth remembering that under umbrella brand It will not necessarily be possible to freely advertise medicines, supplements or stimulants with a common graphic design or part of the name taken from another product.  

For example: formerly umbrella brands Marlboro or Camel were also responsible for clothing, gadgets or shoes. Today, a cigarette manufacturer's shoe shop would not be well received by the public and might even have legal problems. The changes are also due to the fact that it is different today marketing environment.

When is it worth considering an umbrella strategy?

Introduction umbrella strategy is beneficial when mother company has a strong position in the market and plans to expand its product range. This allows new products to benefit from an already well-established reputation, making them easier to market. Before deciding to use umbrella strategy, it is worth conducting a market analysis and assessing whether the new products fit with the existing brand profile. Properly planned marketing strategy enables the effective introduction of products under a common umbrella brand, increasing their visibility.

Impact of the umbrella brand on customer loyalty

Application umbrella brand can significantly influence customer loyalty. When consumers have a positive experience with one product under the umbrella brandThey are more likely to try other products from the brand. However, if a new product does not meet their expectations, this can negatively affect the perception of the brand as a whole. It is therefore crucial that all products within the umbrella strategy maintain high quality and deliver what they promise mother companies.