Umbrella brand or parent company?

The umbrella brand as a concept sometimes confuses the marketers themselves. It is worth knowing what it is to consciously shape the structure of your company.

Umbrella brand or branding family are concepts that are especially useful when planning the strategies of large corporations. However, even small companies may be on the threshold of changes and consider introducing a new product under the same or a different name. The advantages and disadvantages of these solutions are described in the following text. 

What is an umbrella brand? 

The umbrella brand takes its name from the shape of the umbrella, which consists of the tip and the parts of the frame that branch radially downwards. The structure of an umbrella company, in which various products are produced under one brand, would look similar. This model is also called family branding, because the products form 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

The umbrella brand applies to all products promoted and sold by the company under the same brand. As a rule, the products or services covered by the umbrella brand are very similar or have a similar purpose. It binds a number of similar products, thanks to which it brings with it such benefits 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.

The umbrella brand is characterized by the fact that the company focuses not so much on creating brand image specific product, but on building a strong brand image for the entire company. It then covers the entire activity and social image of the company. The umbrella brand aims to cover as many products or services 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 more sales.

The umbrella brand is a strategy that makes sense only when the awareness of its existence on the market has already reached a high level, and the brand itself enjoys a very good reputation.

Umbrella brand - quotes

Brand value Donald Trump, who runs a number of businesses bearing his name, is perfectly aware of the umbrella umbrella. “Using my name on buildings is guaranteed to be of the highest quality and costs at least $5 million – just for the name. Developers know very well that it will pay off. The building will meet my highest standards. When I remember the line in Shakespeare's Romeo and Juliet - "what does the name mean?" - it makes me want to laugh.

Mark Morgan also sees the value of an umbrella brand, stating that “A strong brand is one of the most valuable assets a company can develop. It serves not only to distinguish a given company from the competition. It also helps clients and other stakeholders to establish a bond with the company and its product offering. It is a medium that builds loyalty and contributes to the sustainability of any organization. "

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 of a brand, especially if it is supported by quality." It is the highest quality of the offered products that is a prerequisite for using the umbrella brand. Because the quality of one product translates into opinions about the quality of another. One weak element can harm an entire 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."

Benefits of using an umbrella brand 

The 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 another brand and its awareness among recipients. This allows you to save even when taking into account the packaging or logo. Starting a similar production in one factory is much easier than starting a completely new enterprise.  

The processes in the umbrella company are also already optimized - another brand can benefit from this. Already owned distribution channels or models facilitate the sale of another product. The products can be of better quality, because the manufacturer has to work only once on improving the recipe, new logo or packaging. It does not have to outsource these tasks multiple times, as it would be if it produced products under many different brands. A customer who has already become convinced of a given brand does not have to go through the entire decision-making process anew. From overcoming objections to making a purchase decision. 

What instead of an umbrella brand? 

An umbrella brand is often created when a company extends the scope of its activity to another field. It happens that over time corporations that started out with a company producing only one thing will bud over time in this way. However, sometimes it is also different. It may happen that a lifestyle brand that launches products from a narrow, new category will 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 operating under an umbrella brand, it is worth taking a good look at the legal aspects related to the new field of activity. And that's before it even starts marketing campaign if rebranding. There aren't many industries that are affected by the limitations. However, it is worth remembering that under an umbrella brand it will not necessarily be possible to freely advertise drugs, supplements or stimulants with a common graphic design or a name element taken from another product.  

For example: in the past, the umbrella brands Marlboro and Camel were also responsible for clothes, gadgets and shoes. Today, a cigarette manufacturer's shoe store 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.

Umbrella brand - examples in the food and clothing industry 

The easiest way to explain what an umbrella brand is with an example. Several such companies can be found at the interface between the food, clothing and interior industries.  

• 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. 

The possibilities offered by the umbrella brand are well illustrated by the example of Marks & Spencers. The situation in the clothing industry is difficult today. Simplicity and moderation are in vogue, and customers have an enormous choice like never before. The use of the sentiment towards the British clothing company and the growing trend for high-end food allowed the company to minimize losses and partially - change industries. In case of trouble, such action is much simpler when the company has an umbrella brand with many different goods or services under it. 

In which industries the umbrella brand strategy works best?

The strategy of using the 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.

The umbrella brands are used by both global giants and small craft enterprises. The common knowledge of the brand may lead to almost immediate acceptance of the company's offer by the market, retailers and consumers. The umbrella brand should be introduced 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 the umbrella brand is that all marketing resources are focused on supporting the entire "umbrella", that is, at the same time, all products signed with a given brand. On the other hand, it can also be a restriction in marketing communication. Why? Because when receiving the sent messages, customers refer 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 offered product to have a separate and expressive identity, the umbrella brand strategy will absolutely not work. However, if our brand is a company and its value is the diversity of the offer - creating an umbrella brand will be the most effective and effective way to win the hearts and portfolios of the target group. The umbrella brand is also an ideal idea for functioning on the family business market, when all products can be signed 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 on brand building one thing to keep in mind when using an umbrella. Although, by definition and name, it protects all products grouped under it, negative opinions that damage the reputation of one of the products can also infect the image of the others.

Step by step umbrella brand strategy

The company successfully sells one product. The quality developed allows it to introduce another product under the same brand, then create another, etc. This is how the idea of umbrella brands arises. The umbrella brand has definitely more advantages than disadvantages, so it is worth considering using such a solution. However, before we proceed to the implementation of activities, it is worth considering how to neutralize the shortcomings of the umbrella brand. First of all, we have to consider the risk of brand blurring. This applies to a situation where the categories of products offered are different. For example, when a brand producing juices wants to market cosmetics under the same name. Bringing together brands that offer extremely different products can leave consumers confused. They will stop "sticking" brands in their heads, they will not understand why certain goods are sold under one trademark. In that case, it is better 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.

Bringing an umbrella brand to 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.

Creating a strategy is demanding, time-consuming work - creative and analytical. The strategy should be a thoughtful, structured map that leads to consistent, effective actions. It must assume a mission (i.e. the basic assumption about the functioning of the company - what it strives for, what needs it wants to meet), goals (specific, individual for a given brand, in accordance with the SMART principle), market tasks and a marketing plan. It is important in the strategy to find a unique, individual set of features that will distinguish the company on the market. In the case of an umbrella brand, you can use one idea - a common idea for all brands that will bind them together.

The development of the umbrella brand

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

The brand development process begins with establishing the main elements of the strategy (such as the brand's mission, its goals and market objectives). Then you need to conduct a comprehensive market analysis. Why is environmental research so important? Because the failure of the umbrella brand can negatively affect the parent company, which will lose the trust of loyal customers and its stable position in the industry. Market analysis is primarily to assume 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 the development of the brand. The client's profile should include his demographic data, interests, preferences, preferred communication channels, goals and values that guide him.

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.

Image creation

The development process is also image creation brand. One of its elements is visual identification system – i.e. colors, fonts, style of texts and infographics. The 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 parent brand by using only the best of the main product - e.g. we leave the font style, change the colors.

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

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

Any enterprise may be affected by the crisis. Sometimes a minor slip is all it takes to create a wave of outrage that will tarnish the company's reputation. In the case of an umbrella brand, unfavorable opinions may have a negative impact on the image of the parent company. Why? Because the "umbrella" is equated with the maternal enterprise. It is closely related to it. The consequence of such a situation may be a decline in the market position, loss of many customers and reduction of the company's attractiveness in the business context - less chance for 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.