“I am setting up a new business portfolio but it’s a subset of the group company. Can you help me think of a great brand name for this new portfolio?” - A very common request we hear from companies and business leaders as their businesses expand. This blog post explores and explains what it means to have an umbrella brand. Toward the end, we will also share the benefits and potential pitfalls of an umbrella brand (with a real case study).
The weekend is approaching and you are the host of a party. You are a master planner of events and gathering yet you are wondering what is the best way to get this done to maintain your status and reputation of a great host! You have decided to go all out by starting off with a super theme. You decided on "Fantastic Fiesta." and next, you have to think about the food menu, music, dress code and decoration – tacos, pizzas, sushi, salsa, and even a bit of good old funk music to spice it up a little. It's a crazy mix, but you say to yourself “Yes, it’s a nice mix and they are all under the umbrella of the Fantastic Fiesta. This is a simple analogy of an umbrella brand.
In this analogy:
Fantastic Fiesta → the umbrella brand: the overarching theme that ties everything else together.
Tacos, pizza, sushi, etc. → the different products or services under that umbrella: each with its unique flavor but contributing to the overall party experience.
Dress code and decoration -> This is how your products or services are packaged according to brand and visual guidelines to ensure a consistent brand as well as to allow your core values to shine.
Your guests → your target audience or customers: they recognize the Fantastic Fiesta theme, and if they enjoy the “pizza”, they will be more willing to try the “sushi” because they trust your ability to throw a fantastic party.
Umbrella branding (also known as family branding or corporate branding), is a marketing strategy in which a company uses a single brand name to market and sell a variety of related products or services. Instead of creating individual brand names for each product or service, the company leverages the strength and recognition of a single, overarching brand. This umbrella brand serves as a common identity for all the products or services offered by the company.
The idea behind umbrella branding is to create a cohesive and consistent brand image that consumers can easily recognize and associate with a particular company. This approach is particularly effective when a company offers a range of products or services that share common characteristics, values, or target audiences. Some great examples of umbrella brands include P&G, Unilever, Coca-Cola, Samsung and Singapore Airlines Group.
Advantages of umbrella branding include:
- Cost Efficiency: Managing and promoting a single brand can be more cost-effective than building and maintaining multiple brands.
- Brand Recognition: A strong umbrella brand can enhance overall brand recognition, making it easier for consumers to recall and trust products or services associated with that brand. This is especially important when expanding into other markets.
- Cross-Selling Opportunities: Consumers who have a positive experience with one product under the umbrella brand may be more inclined to try other products from the same brand.
- Consistency: Umbrella branding allows for consistent messaging and brand image across all products, reinforcing the overall identity of the company. This is especially important when expanding into other markets.
- Efficient Marketing: Marketing efforts can be concentrated on promoting the umbrella brand, and streamlining promotional activities.
- Scalability: Having an umbrella brand allows organizations to add new portfolios into the group structure, this can achieve additional growth opportunities as well as geographical expansion.
Potential pitfalls of umbrella branding:
However, there are also potential risks associated with umbrella branding. If one product or service within the umbrella brand experiences negative publicity or fails, it could potentially harm the reputation of the entire brand. Additionally, if the products or services are too diverse, consumers may find it difficult to associate them with a common brand identity.
In the late 1990s, PepsiCo attempted to extend its umbrella brand into the breakfast market. Products like "Pepsi A.M." and "Crystal Pepsi" were introduced as part of the Pepsi brand's expansion into different dayparts and categories. These products failed to gain traction. Consumers were not receptive to associating Pepsi, known for its role as a cola and snack brand, with breakfast items. The lack of coherence between the umbrella brand and the new product categories contributed to these failures. Needless to say, Pepsi stopped this approach and never returned to the breakfast market. That said, there can also be ebbs and flows of an umbrella brand strategy.
Build an umbrella brand to convert your target audience to customers
All in all, umbrella branding is a strategic choice that depends on the nature of the company, its product or service offerings, and the preferences and behaviors of its target audience. There is no wrong or right in whether an umbrella brand should be created or not. In fact, there are more factors such as revised team structures, additional senior executives to lead new portfolios, products, or services and increased investments to consider. With thoughtful and thorough planning, an umbrella brand set up can become powerful and gain longevity in businesses.
In summary, umbrella branding is similar to throwing a party with a catchy theme where everything is connected under one big, exciting umbrella. It makes it easy for your guests (target audience or customers) to remember, enjoy, and trust in the fantastic experience you provide, no matter which elements they're indulging in!
Avante Strategies has decades of experience building and launching umbrella brands for companies. Contact us for a complimentary 45-minute chat to explore how an umbrella brand can help with your company's growth. (We might end up with the conclusion that an umbrella brand is not required for your business model after all)