How much visi bility to give to the corporate name , group name and the company name itself?

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Course of Study:
(AM710) Brands & Consumers
Title:
The New Strategic Brand Management; Advanced Insights and Strategic Thinking.
(Brand Architecture)
Name of Author:
Kapferer, Jean-Noël.
Name of Publisher:
Kogan Page
•
brand has only one need: to grow, while maintaining
its reputation and profits . Capitalizing
on the success of its founding product or service, it
does so by means of successive extensions, n arrow
to begin with (product line, range ) or broader in
scope (entry into new product categories ) .
When this extension of the perimeter of the
brand’s offer occurs, strategic questions arise: they
concern the brand architecture. The answers to these
will have a considerable effect on the value creation
and the construction of brand capital. This is not
a problem of aesthetics, b ut of efficiency.
The key questions of brand
architecture
There are five types of q uestion:
• What to call new products? Should they be
given a descriptive name or a brand name ?
When Lafarge invented a revolutionary,
fluid and therefore extremely smooth
concrete, should it have called it s imply
fluid cement, or Agilia ? In the latter case,
how should the l ink be made between this
so-called daughter brand, Agilia, and the
so-called parent brand, Lafarge ? Should
one say Lafarge Agilia or Agilia by Lafarge?
Does the same rule apply for all daughter
brands ? How s hould it be expressed on the
packaging of cement sacks, on the prod ucts
themselves, on d istributors’ shelves, or on
the stands at trade shows ?
• How many brand levels to adopt ? Should
there be only one brand name within the
company ? This is the choice for most Asian
groups. This means naming the prod ucts in
a descriptive manner in order to ha ve one
singl e brand. Th us, we ta lk about Samsun g
televisions, Samsung mo bile phones and
Samsung digital cameras. In the same way,
there are Bra un coffee machines, Bra u n
razors, Braun e l ectric tooth b rushes and
Braun hairdryers. Conversely, fo r decades
Philips razors have been known by the name
Philishave, and we talk of the Apple iMac
and now the iPod .
• How much visi bility to give to the corporate
name , group name and the company name
itself? Should everything be brought together
under this one name, as Siemens and Axa
have done, or should the name be given
a role as a guarantee of da ughter brands,
as 3 M and D anone have done ? On all 3M
products (such as Scotch and Post-It) we
find a visible 3 M signature. Conversely, you
have to turn the Evian water bott l e round
to find the Danone Corp logo on the label
at the back. As for Procter & Gambl e’s
products and brands ( Ariel, Tide, Dash,
Always and so on), it takes a sharp eye to
spot the name of the local subsidiary in the
small print. Pharmaceutical la boratories
answer these q uestions in different ways,
depending on whether they operate in
the prescri bed products sector, or in
over-the-counter ( OTC) medication,
or even manufacture generic medicines
( Moss, 2 0 0 7 ) .
Within groups, should the brand be
situated at the corporate level (Accor), or at
the divisional or business unit level, as with
the Accor Casino or Accor Hotels brands,
a longside the well-known product b rands
Part 3 Creating and Sustaining Brand Equity
( Formule 1 , Motel 6, Red Roof, Etap,
Mercure, Novotel, Sofitel, S uite Hotels
and so o n ) ?
• More generally, should there be a different
name for the company and the commercial
brand? Thus, France Telecom is still the
name of the institution, and Orange is now
the only commercial brand.
• Should the same architecture apply around
the world ? For example, in the country of
origin, in Europe, in the United States and
in Asia ?
These are necessary, even crucial questions, which
need to be answered in order to make the continu ally
renewed product offer easy to read, while at the
same time b uilding the brand’s reputation through
this offer.
The term ‘branding strategy’ is used for decisions
on:
• the n umber of brand levels to be
implemented ( one, two or even three ? ) ;
• the role of the corporate in the product value
communication: should it be a bsent, strongly
present, or hardly present ?
• the relative weight of these brands, and the
graphic arrangement of their coexistence on
all the documents, packaging, and products,
but also i ndustrial sites, offices, and b usiness
cards of salespersons and managers;
• the degree of globalization of the
architecture.
There are a few typical responses to these questions:
these models are called branding strategies.
They are discussed i n detail below. First of all it
is necessary to return to the key questions of
brand architecture. Brand architecture is therefore
a strategy: it may be ideal, or may lead to losses
of efficiency, even to paralysis. In any case, what is
expected is a coherent and well-founded response,
even if it must change as competitive conditions
evolve, rendering the previous choice of architecture
null and void, or inefficient and too expensive. In
fact, groups never cease to change their brand architecture,
as the examples below illustrate.
In 1 9 90, l ‘Oreal Paris, which had previously
limited itself to endorsing its brand ranges worldwide
( Elnett, Elseve, Studio Line, etc) by discreetly
signing them, overturned this state of a ffairs,
henceforth giving l’Oreal Paris a key role, under
which all these so-called star brands had to fall
into line, thereby displaying a community of values
and communications style.
In the B2B sector, Henri Lachmann undertook
the reverse change when he took over from D idier
Pineau Valenciennes as managing director of the
Schneider Electric Group. The latter was responsible
for taking Schneider from a fragile status as ironmongers
to that of a global high-tech company
specializing in industrial electrical equipment, thanks
to the acquisition of companies famous throughout
the world (such as Merlin Gerin, Telemecanique,
Yorkshire Switchgear, the Italian company Modicon
and the American Square D ) . Pineau Valenciennes’
goal was to achieve a unique corporate brand as
quickly as possible, which would also play the part
of a commercial brand: as its competitors Siemens,
ABB, GE and Legrand and Hager do, Schneider
Electric became the keystone of the whole offer.
This involved the progressive disappearance of the
specialized companies such as Telemecanique and
Merlin Gerin, relegated to the rank of daughter
brands, then to names of ranges. Taking over management
of the company, Lachmann had a different
vision. It was necessary to do the opposite, revitalizing
the daughter brands to worldwide recognition,
since they were the capital of the emerging
company Schneider Electric. Today the process has
ended with one brand only: Schneider Electric.
In 2005, all products manufactured anywhere
i n the world by Unilever, a leading group in massmarket
products, had to carry the U logo in a highly
visible and identifiable way. Until then the company
had been hidden, or at least not i dentified on product
packaging, except for the legally required
mention of the legal name of the local s ubsidiary
( such as ‘Lever Industan Ltd’ in Indi a ) . This emergence
of the corporate brand is a fundamental
tendency, b ut Unilever’s competitor, Procter &
Gamble, still hides its identity on its packaging. It
is true that the company has had to cope with
a particularly persistent and unpleasant rumour
( Kapferer, 1 9 8 7 ) .
In 2006, Veolia, the world leader in environmental
services ( water and waste treatment, energy,
delegated p ublic transport) decided to remove its
three branch brands, through which it had communicated
since their creation: Connex for transport,
D alkia for energy and O nyx for waste treatment,
substituting them with the u nifying name Veolia: so
the brands became Veolia Transport, Veolia Energy
and so on.
Clearly brand architecture i s not a technical or
tactical problem, but a strategic one. The choice o f
one leads to a commitment that lasts several years,
and it may become a source of cost cutting or of
expensive inefficiencies.
Type of brands
Let us look at a roll of a dhesive tape. At the top
and in large letters we find the name of the general
public commercial brand name Scotch. Down and
to the left we find 3M, or the company’s corporate
brand. Finally, under Scotch, comes the name of
the product itself: Removable Magic™ Tape.
As we can see, there are three brand levels here,
and a descriptor ( or designator ) :
• the company’s corporate brand 3M;
• the commercial brand Scotch, which acts as
an umbrella brand for all the mass or general
public products;
• the brand of the product line Magic™ Tape;
• the designator specifying what kind of Magic
Tape it is : ‘remova ble’ .
3 M is familiar with this three-level strategy.
The strategy of Nokia appears much simpler:
here there is only one brand level. Everything i s
Nokia, followed by a serial number or code name
that serves only to identify a reference, a code name
that will be null and void in six months, given the
speed at which the ranges in the field of telephony
are rotated. Moreover, it is common to say, ‘I’m
going to buy “a Nokia”‘, without giving any other
name. Then people specify which model they want
to the salesperson by recalling the particular
characteristics desired ( ‘the one with this and that
function and a very flat design’ and so on) .
As for Apple, the company has opted for two
brand levels, Apple itself and iPod or iMac, named
after the famous Macintosh. Apple’s star products
have all had their own name (sub-brand ) , except of
course for the early ones that made the company’s
reputation. They were called Apples ( 1 , then 2 then
3 ) and then a variant name. At l’Oreal also, the
policy is not to mention the group name but to build
the brands on star products ( also called franchises)
Chapter 13 Brand Architecture
with the ir own names. For e amp le Gamier (the
other global general pu blic brand o f the l’Ore31
gro up) has built its reputation on the Fructi ran ge,
or the Recital line. Rena ul t has built its reputation
on brands that all have a name ( Twingo, Clio,
Laguna, Scen ic, Latitude ) .
What expla ins the choice o f arch itecture wit h
one, two o r even th ree brand level ? It i s princi pally
the market, its level of segmentation and the option
of whether or not to lean on the corpo rate brand
for support.
Products with very ra pid rota tion make it impossible
to use anything other than a sin gle brand
name (Nokia, Sam sung, Sony Ericsson , Sage and
so on). It takes time to install a particular product
brand .
In big industry, work i s done by proj ect: the
name summarizes the company’s competence, stature
and power, the professionalism of its men and
women, the underlying culture. Th i s is why big
industrial companies like to capital ize all the i r
shares on a s ingle name. Nevertheless, ta king public
works for example, as invitations to tender are
done through trade bodies, the groups have a twolevel
brand policy. Vinci suggests the power of a
leading group, Via is the reputed global brand i n
road construction.
In the mass market, where products are largely
s imilar, i t is necessary to help create percepti bJe
differentiations. Brand names con tri bute to th is.
Pepito by L u was aimed at c h ildren from 6 to 1 0
years, then Prince by L u took them on to the age of
15. The first name a lso makes it possi ble to confer
an intangible personality on the product, an added
value in comparison to the distributor’s copy.
Which role for which brands?
In the a bove example of the removab le Scotch
Magic™ Tape from the 3 M company, it is easy to
understand how each level plays a specific role.
The manner i n which the consumer talks about
the product ind icates which of these levels plays the
leading role, that of seller (the motivator) , the one
i n which the perceived value resides. The consumer
rarely says ‘I want a 3M.’ On the other hand, the
manager of a clinic or hospita l, hospital attendants
and doctors will find it easier to emphasize 3M.
In their eyes, all the pro fessionalism o f a com pany
that, through its innovati ons, has been able to create
Part 3· Creating and Sustaining Brand Equity
products so useful to s urgeons at the most critical
moments of surgery resides at this level.
When you b uy a KitKat C hunky from Nestle,
you are buying first and foremost ‘a KitKat’ in its
larger version ( here called Chunky to increase the
perception of volume and size ) , under the o bvious
a uspices of the ‘better living brand’ Nestle. If you
turn over the product, you will see the corporate
brand Nestle itself (with its characteristic nest),
which acts as a supreme guarantee, morally responsible
for all the products made by its factories
around the world, a kind of manufacturer’s brand.
Let us note that this manufacturing brand Nestle is
also present on the back of the regional European
commercial processed meats brand Herta .
Through these examples may be distinguished
the roles of:
• Motivator, the anchor point for value and
driver of choice. From a certain point of
view, this is the true brand: the one that
most symbolizes the differentiation and
creates the desire.
• Source of value for products. The
commercial brand Nestle applied as the aegis
a bove all products indicates that these carry
its values of taste, health and family.
• The producer’s moral endorsement and
responsibility, where the company supplies
a telephone number that c ustomers can call
to report any deviation that they consider
unacceptable, anywhere in the world. This is
a manifestation of the demands of corporate
social responsibility ( CS R ) . Yesterday we
said, ‘Big is beautiful’; today we say, ‘Big i s
responsible.’
• The designator of the specificity of the
reference in question – when we say KitKat
Chunky, to specify which one we wish to
buy.
• An identifier of the origin: this is the role of
the manufacturer’s brand.
The accumulation of levels damages clarity, and
appropriation by the client. It should therefore be
combated, and only the indispensable levels should
be kept. The debate on the presence or a bsence
of the corporate brand on mass-market products
cannot be decided only by questioning consumers.
Of course, if they were asked whether they see any
reason to keep the name 3 M on the packaging, the
maj ority would say no: they don’t know 3 M . Since
the logo evokes nothing for them, they regard it as
useless. However, the strategy cannot be based on
this point of view alone. The legitimate ambition of
enhancing the group’s value on the stock exchange
implies an awareness that cannot b e built up
through colossal advertising budgets, the money for
which must necessarily be taken from the brands’
operating budgets. It is therefore better to profit
from the millions of stealth contacts offered by the
products and the communication they make.
For this same reason, the Accor symbol appeared
in the lobbies of all the group’s hotels, regardless
of brand. This made it clear that all of these
hotels, previously presented as independent or even
competitors, were in fact members of the same
family. There was a loss in differentiation and probably
in emotion, but Accor rapidly gained from
it recognition as the leader in hotels and services
in Europe.
The first alternative: branded
house or house of brands?
The brand architecture i s the coherent response
given to the three questions examined a bove:
• How many brand levels should be used? One
single level, or two ? In other words, should
brands be created to designate the activities
or the professions or the products
themselves ?
• What linkage exists between these brand
level s ? This goes back to the question of
the respective roles of the brands : where
is the value located, who endorses whom,
and so on?
• What visibility should the corporate brand
have ? And what role ?
The answers to these questions are not independent.
In reality they form six types of overall response,
with precise impacts that go far beyond the descriptive
( what name or symbol i s in large font, or in
small, at the top or the bottom) and concern the
offer itself. They affect its content, its values: that
is, the degree of variety that a brand can offer under
its name. These overall responses or branding architecture
types number six in total . From this point
on we shall distinguish the following architectures:
Chapter ‘3 Brand Architecture
F I G U R E 1 3. 1 Positioning alternative branding strategies
BRAND FUNCTION:
INDICATOR OF ORIGIN
SOURCE EFFEC T
REASSURANCE
• Corporate
masterbrand
• Corporate
source brand
Corporate
• endorsing brand
• Maker’s mark
• Generic brand
• the product-brand strategy and its variants,
the line and range brands;
• the flexible umbrella strategy;
• the master brand strategy;
• the maker’s mark strategy;
• the endorsing brand strategy;
• the source brand strategy.
These strategies are responses to the market. They
ma y be structured along two axes (see Figure 1 3 . 1 ) ,
according to whether the value sought by the brand
relates more to power and stature on the one hand,
or personalization, differentiation and identity on
the other.
At one extreme, the strategy known as the
corporate master brand is characterized by a single
and unique brand level, often the corporate name,
• Umbrella brand
• Source brand
• Endorsing brand
• Range brand
• Line brand
• Product brand
BRAND FUNCTION:
PRODUCT DIFFERENTIATION
PERSONALIZATION
and that of the company itself. The who l e of the
company that adopts it must then fa l l into line with
the brand’s val ues, and be the carrier o f these
values. Either something is IBM, or it is not. Brands
i n the ind ustrial and public worlds and the services
sectors ( banks, insurance, consultancies and so on)
typically follow this strategy. Here, reputation is
linked to reassuring size and power.
At the other extreme we find the product-brand
strategy. In this strategy, the compa ny is not i den tified
at a l l . This is the case with brands o f LV MH
and Procter & Gamble, which does not strongly
identify itself on each of its brands (A riel, Ti de,
Pampers, Always, Dash, Swiffer and the rest ) . This
makes it possible to function in the same market,
for examp l e washing powders , with a po rtfo l i o
of apparently competing brands. The car manufacturer
PSA also functions via a product-brand
Part 3 Creating and Sustaining Brand Equity
strategy: you can buy either a Peugeot or a Citroen,
but not a PSA.
Architectures with two or more brand levels
represent a compromise between the power requirements
that push for a single dominant name
( masterbrand) and the personalization requirements
that p ush for segmented daughter brands, each
ha ving a clearly differentiated identity. In fact,
generalized a utomo bile brands attempt to capitalize
on their name (Volkswagen, Toyota ) b ut boost
the attractiveness of the models themselves by
means of a name that acts as a brand ( Golf, Passat,
Yaris, Prius ) .
It is also possible to classify these architectures
according to the degree of constraint that they impose
downstream, at the b usiness, product and market
levels. In this respect, the Americans distinguish
between two basic alternatives: ‘house of brands’
or ‘branded house’ (that is, a basket of different
brands or activities brought together under a single
aegis) (see Table 1 3 . 1 ) . These alternatives lead back
in fact to the degree of constraint and coherence
imposed on the products and markets. We will see
that behind these basic alternatives can be found
architectures that in practice are very different.
The first option ( ho use of brands) relates to a
situation of extreme freedom of management for
the brands, s ubsidiaries, activities and divisions.
This is typical of Japanese groups. For example,
there is no coordination between the Mits ub ishi
Motors division and the Mitsu bishi Electric division.
TA B L E 13.1
‘branded house’
,
Prod uct 􀀸bra!:1d
Line brand
Ral”lge brand
Maker’s mark
Endorsing brand
‘House of brands’ or
Flexible umbrella brand Masterbrand
!! • , 1I ‘
It may be the same name, and the same company in
legal terms, but each division, like a silo, acts as it
sees fit. It carries out its own advertising, with its
own arguments, its brand values and so on. The
important things are commercial s uccess, and the
growth in recognition of the Mitsubishi name.
As we can see, ‘house of brands’ does not relate
solely to the product-brand architecture, as D avid
Aaker ( 1 9 95 ) and Kevin Lane Keller (2007) write,
b ut also applies to umbrella-type strategies ( a single
brand for the whole company) where in fact the
decisions made downstream, i n contact with the
market, are very free, and seek only to reach
the obj ectives linked to that specific market, without
coherence as a whole at the image level. Michelin
has acted in this way for decades. Michelin’s Truck
D ivision did not coordinate with Michelin Private
Vehicles or with Michelin Aviation. There was no
desire to create variations on a common, specific
and normative brand platform in each of these
markets.
The ‘branded house’ expresses the desire to give
coherence to the whole under the a uspices of a
brand with central values that find embodiment
at the market and product level. This path brings
together the master brand and a lso dominant
( so urce ) brand strategies, giving a strongly normative
structure to the d aughter brands on the second
level. This strategy is pursued by Nivea for example,
l ‘ Oreal Paris and Kinder. This second level must
express the values of the parent brand. In this way
the necessary coherence can be instilled, as dealt
with in Chapter 1 1 . The ‘ branded house’ is a family
with a high degree of internal unity.
This is why we can structure the strategies
according to a matrix that classifies them. They
are classified b y the n umber of brand levels ( one
or two ) and according to the degree of freedom
allowed downstream, at market level, for decisions
on product and service positioning. These will be
examined here in turn.
Branding strategy and corporate
valuation
Branding strategy should not be seen as a formal
design problem b ut rather a matter of deciding on
the value flows to be created between the different
p arts and products of a company. As such it affects
the value of the company.
Chapter 13 Brand Architecture
F I G U R E 1 3 . 2 The six main brand architectures
High degree of freedom
(house of brands)
High degree of coherence
(branded house)
Product brands Umbrella brand Masterbrand
Brand or corporate Brand or corporate
One
branding
level
Product Product Product Product Product Product
(Hidden corporate)
P&G Mitsubishi, Samsung Nivea/Sony
Maker’s mark Endorsing brand Source brand
corporate Brand A
Two
branding
levels
Brand A
Ferrero
The business angels and investment funds have
got it right. For example, in the cosmetics sector,
there is more to be gained from the resale of a
‘branded house’ than a b asket of mixed brands,
however well known, grouped together within a
‘ho use of brands’. For example, Gamier has
become a ‘ branded house’, a house with a ho use
spirit and house values that in return influence
the positioning of the brands under Gamier. In
fact, Gamier is itself a brand with a specific
identity. SCAD, on the other hand, is a ‘house of
brands’ that groups together brands as diverse as
D op, Vivelle, D essange and J L David. S CAD is
merely a commercial and marketing organizational
structure.
In the cosmetics sector, a ‘house of brands’ is
valued at six times the profits, while a ‘ branded
house’ enj oys an overval uation that brings the PIE
(Price-Earnings ) ratio to 7 or 8 . Similarly, as soon
as a company is quoted on a stock exchange, all
internal separatist tendencies – such as sub-brand
logos protected j ealously from the corporate brand
Corp
Brand B Brand or corporate
Sub-brand Sub-brand Sub-brand
A B c
Corp
3M !’Oreal Paris
– must cease. What had previously been of little
consequence becomes un acceptable.
Research by Rao, Agarwall and D a lhoff (2 0 0 6 )
has examined how manifest branding stra tegies
were related to the stock value of the corporation.
The statistical results show that a one-brand strategy
(branded house) is linked to a higher sto c k
market value, fo llowed by the mixed strategy. These
results are not surprising, but they are mis l eading
and likely to lead to wrong decisions.
Looking at the stars of Wall Street today, one
finds the start-ups of the inte rnet world (Google,
Amazon and eBay) or of hig h tec hnology (Cisco,
Microsoft, Apple and D e l l ), or services (IB M, etc ) .
These are recent companies focused on one singl e
market, if not one activity. In itse l f eBay is a product
brand name that has become a l isted company. The
same holds true for Ama zon, ete. This means that it
is normal that young companies, still focused on
one need if not one service or product, in the fastestgrowing
part of the modern economy de liver high
ROI and stock valuation multiples. Their branding
Part 3 Creating and Sustaining Brand Equity
strategy is only the correlate of the above-mentioned
parameters and in no way a cause of the profits.
Also, how useful is this type of result for say P&G,
Lever or LVMH? These groups thrive by mastering
a know-how (marketing here, luxury management
there) and managing a portfolio of independent
brands, each the leader in its own segment. Should
P&G then a bandon its branding strategy and use a
single brand, j ust as the Korean or Japanese groups
do ? But then it would not b e able to dominate
markets with multiple entries ( Ariel, D ash, etc in the
laundry detergent market, for instance) . Should it
be called the Gillette Group or the Tide Group
instead of P&G now that this corporate name
has become the symbol of excellence in marketing
FMCG goods ?
Brand architecture and corporate
internal organization
The brand architecture also has a strong influence
on the functioning of the company. There is no masterbrand
or source brand without a brand master, a
guardian of the temple, someone who will ensure
the necessary coherence, not only at the level of the
logo or of the formal identity, across all countries
and divisions. That would be to view this person as
more than a guardian of policies – on character, on
typographies, or on respect for graphic charts –
( what is often referred to as a logo cop ) .
In reality, the more a company moves towards
the ‘branded house’ type of architecture, the more
it becomes necessary to install coordination and
power structures. Hence at Schneider Electric, and
also at the core of the Seb group, there exists a
brand committee, made up not of communicators
b ut of the managers of the b usiness units and the
divisions themselves. The profile of the participants
in this brand committee is moreover symptomatic
of how seriously or otherwise the company takes
the notion of branding.
Japanese companies have recently become aware
that their typical silo organization, although it
certainly h a d advantages, was damaging to the
emotional quality of the brand and its coherence.
Each division pushes a functional characteristic of
its product, and nobody takes responsibility for
the brand values themselves. This is why, in 1 999,
Toshiba decided to name a ‘Mr Brand’ in the person
of the previous worldwide director of research and
development for the Toshiba group. It should also
be noted that Korean groups such as Samsung, and
in particular LG, did not take so long: they were
quick to name brand guardians, with transverse and
global authority.
If we examine the architectures in detail, the
apparently banal fact of moving from two brand
levels to one is in reality a message on the company’s
methods of organization and the distribution
of power. In its beginnings, Veolia followed a
house of brands strategy. Veolia was born from the
splitting up of Vivendi Universal’s public utilities
division, b ut the value was located at the level of
its business activities . In this way Connex brought
together all the private trains, buses and subways
throughout the world, Onyx was the global brand
for waste management and D alkia the brand for the
energy branch . This marked a group where power
coordinates, but the markets dominate.
Removing these division brands sends a strong
message of integration, externally to clients and
prospective clients , b ut also internally. The client
may legitimately expect to see the organizational
and IT silos disappear, and genuinely networked
managers appear. When this is not the case, there is
a gulf between the brand and the organization.
The main types of brand
architecture
Let us now examine the individual characters of
the principal brand architectures. We shall begin
with those architectures that a llow great freedom
in terms of products and communication: the link
between the company values and those of the
divisions, activities and product is lax. They are
brought together under the term ‘house of brands’.
Then we examine strategies that are more restrictive
downstream, since the latter should reflect
central values, of which the brand is the concrete
expression (see Figure 1 3 . 2 ) .
The product-brand strategy
It is widely known that a brand is at the same
time a symbol, a word, an o bject and a concept: a
symbol, since it has numerous facets and it incorporates
figurative symbols such as logos, emblems,
F I G U R E 1 3.3
The product- brand strategy
Brqnd A
Product A
Positioning A
Company X
Brand B Brand N
Product B … etc… Product N
Positioning B Positioning N
colours, forms, packaging and design; a word,
because it is the brand name w hich serves as
support for oral o[ written information on the
product; an obj ect, because the brand distinguishes
each of the products from the other products or
services; and finally, a concept in the sense that
the brand, like any other symbol, imparts its own
significance – in other words, its meaning.
The product-brand strategy involves the assignment
of a particular name to one, and only one,
product ( o[ product line) as well as one exclusive
positioning. The result of such a strategy i s that
each new product receives its own brand name
t h at belongs only to it. Companies then h ave a
brand portfolio that corresponds to their product
portfolio as illustrated in Figure 13.3.
This brand strategy can be found in the h otel
industry w here the Acco[ Group has developed
multiple brands for precise and exclusive positions:
eg Sofitel, Novotel, Suit’ Hote l , Ibis, Formule 1
and Motel 6 . The company Procte[ & Gamble
h a s made this strategy the symbol of its brand
management philosophy. The company is represented
in the European detergent market by the brands
A[iel, Vizir, Dash and in the soaps market by Cama y,
Zest, ete. Each of these products h a s a precise,
well-defined positioning and occupies a particular
segment of the market: Camay is a seductive soap,
Zest a soap for energy. Ariel positions itself as the
best detergent in the market and D a s h as the best
value for money in the intermediate price range. Both
h ave developed a product line including powder,
liquid and tablets.
Chapter ‘3 Brand Architecture
I n novative com panies in th food <;ecto r creat
new spec i a l i ty products which a re the n di stingui
shed through individual na mes and therefore
these companies have a la rge brand product po rtfo
l io . The cheese com pany Bong rain ma rket more
than 1 0 brands, such a St Moret, Capri e des Dieux
and C haumes . The m i neral water ma rket is composed
of only p rod uct brand : one asks for Vinel,
Evian or Contrex, knowing very we l l that there wi l l
be no a m bigu ity and one w i l l get the product asked
for. Here, the brand, the name of a prod uct, becomes
a strict indication of i dentity.
I n an extreme case, the p roduct is so pecific that
th ere is no equiva l ent, and the product is not only a
product, but an entire product category o f wh ich
it is the sole representati ve. This p h enomenon has
been described by some th rough the neo logism
‘branduct’ ( Swi ners, 1979), an abbreviation of brand
product. These prod ucts a re so u n i q ue, so spec ific
that they h ave no other name than thei r brand
name. We see t h i s in ‘ Post- it’, B a i l ey’s I rish Cream,
Malibu liqueur, Mars, Bounty, Nuts, ete .
How i s the strict rel a tion s h i p between one name,
one product and one positioning main tained over a
period of time ? First, the only way to ach ieve brand
extension is by renew ing the p roduct. To keep the
product at its height and original positi oni ng, the
Ariel formul a h a s often been improved since it
was la unched in 1969. Arie l receives the best
technological and chemic a l inputs from Procter
& Gamble ( l ike its competitor, Sk ip, from Leve r)
(Kapferer and Thoenig, 1989) . Often, to e m p h asize
an important improvement to the product, the
company adds a number after the brand name
( D a s h 1, Dash 2, D a s h 3). To keep up with changing
consumer h a bits, the brand name is appl ied
to various formats ( for example, in packagi ng:
packets, drums, in powder or l i q u i d form ) .
What, then, are the ad vantages of the prod uct
brand strategy for compan ies ? For firms focu sing on
one market, it is an offensive strategy designed to
occupy the w hole market. By indulging in the practice
of m u l tiple brand entries in the same ma rket
( Procter & Gambl e h a s four dete rgent brand s ) , the
company occupies many segments with d i ffe rent
needs and expectations and th erefore has a greater
consol id ated s h a re of the market: it becom es category
leader. However, this remains inconspicuous,
for the corporate name is kept discreet if not h idden.
Some com p anies do wish to remain at the back
and focus the lights exc l usively on their brands. The
Part 3 Creating and Sustaining Brand Equity
cases of Procter & Gamble, Unilever, Masterfoods
and Bestfoods are we l l known, that of ITW is less
so. ITW stands for Ill inois Toolwork. It is a billionUS-
dollar corporation, very acquisitive: it owns
more than 500 companies throughout the world. Its
brands aim at the construction professional: they
are called Paslode, D uo-Fast for wood products,
Spit and Buidex for steel and concrete. The goal
is to provide very speci alized tools to specialized
workers : a policy of niche brands, addressing segmented
needs, craftspeople and channels is a direct
consequence of this goal. People working with
wood want to be reinforced and differentiated from
people working with other materials. ITW does not
wish to hurt this desire, and AS resisted all temptations
to grow the ITW brand itself, for instance
as an endorser. ITW’s success rests precisely on the
exact contrary.
When the segments are closely related, choosing
one name per product helps customers to perceive
better the differences between the various brands.
This may also be necessary when the products resemble
each other externally. Thus, one sees that
although all detergents are composed of the same
basic ingredients, the proportion of these may vary
according to the factor that is being optimized: stain
removal properties, care for synthetic materials,
colourfast control or suita bility for hand washing.
The association of a specific name for a type of
need underlines the physical difference between the
products .
The product brand strategy is one that is adapted
to the needs of innovative companies who want to
pre-empt a positioning . In fact, the first brand to
appear in a new segment, if it proves to be effective,
has the advantage of the first player in the market.
It becomes the nominal reference for the thus innovative
product and maybe even the absolute
reference. The brand name patents the innovation.
This is particularly important in markets where the
success is likely to induce copying. In the pharmaceutical
world where copies are a certainty, every
new product is registered under two names: one for
the product, the formula, and another for the brand.
Even if they have the same formula, future copies
appear different because the originality of the brand
name ( Zantac, Tagamet) provides an a ura of exclusivity
and of legal protection. On the other hand,
where the law cannot provide protection, forgeries
and copies attempt to exploit the potential of the
brand name by imitating it as closely as possible.
That is why large mass retailers often use product
brands or, to be more precise, counter-product
brands. Thus, Fortini copies Martini, Whip copies
Skip, etc. Scared of having their other brands
cast out of favour manufacturers have, until now,
hesitated to legally challenge the distributors for
forgery or illegal imitation. ( See also page 2 1 5 . )
Product brand policies allow firms to take risks
in new markets. At a time when the future of
the liquid detergent was still uncertain, Procter &
Gamble preferred to launch a product brand: Vizir.
Launching it under the name Ariel liquid would
have threatened Ariel’s brand image asset and
launching it under the name Dash would have incurred
the risk of associating a potentially powerful
concept with a weak brand and thereby overshadowing
it. Coca-Cola did just the same when it
first launched Tab to test the diet market.
Product brand policy implies that the name of the
company behind it remains unknown to the public
and is therefore different from the brand names.
This practice a llows the firm considerable freedom
to move whenever and wherever it wishes, especially
into new markets. Procter & Gamble moved
from the creation of the soap, Ivory, in 1 8 8 2 , to the
culinary aid, Crisco, in 1 9 1 1 , Chipso in 1 926 and
the machine detergent, Dreft, in 1 93 3 , Tide in 1 946,
Joy, the dishwashing agent in 1 95 0 and then Dash
in 1 9 5 5 , the toothpaste, Crest, in 1 95 5 , the peanutbutter,
Jif, in 1 9 56, Pampers in 1 96 1 , the coffee,
Folgers, in 1 963, the antiseptic mouthwash, Scope, as
well as household paper rolls, Bounce, in 1 965,
Pringle chips in 1 968, sanitary napkins, Rely, in 1 974,
Always (Whisper) and Sunny D elight later on.
Since each brand is independent of the others,
the failure of one of them has no risk of negative
spill over on the others, or on the company name (in
cases where the company name remains relatively
unknown to the public and different from that of
any of the brands ) .
Finally, the distribution parameter also favours
this strategy heavily: the shelf space accorded by a
retailer to a company depends on the number of
( strong) brands that it has. When a brand covers
many products, the retailer stocks certain products
and not others. In the case of product brands, there
is only one product per brand, or one product line
per brand.
The drawbacks arising from product brands are
essentially economic. Thus multi-brand strategy is
not for the faint-hearted.
•
In fact, a new product la unch is often a new
brand launch. Considering today’s media costs, this
involves considerable investments in advertising
and promotions. Furthermore, retailers, unwilling
to take risks with new products whose future is
uncertain, stock them only when reassured by heavy
listing fees.
Multiplication of product brands in a market
due to the increasingly narrow segmentation weighs
heavily on the chances of a rapid return on investment.
The volumes required to j ustify such investment
(in R&D, equipment, and sales and marketing
expenses ) make the product brand strategy an ideal
one for growing markets where a small market
share could nevertheless mean high volumes. When
the market is saturated, this possibil ity disappears .
On the other hand, in a stable market it is sometimes
more advantageous to nurture an existing
brand with the innovation in question rather than
attempt to give it product brand status by launching
it under its own name.
The role of fire curtains between product brands
is certainly important in times of crises, b ut in other
times it prevents the brand from benefiting from the
positive spillover effect created by other products
under the same name. The success of brand A will
not help other products because their names, B, C ,
D, etc are different and d o not bear any relation
to A . As we can see, in this strategy, the firm gives
the brand a completely distinct and excl usive
function and almost no hints a bo ut its origin . New
products do not benefit from the renown of one of
the already existing brands nor from the economies
that one could derive from it. On the other hand,
this advantage has no role among distributors who
are well aware of the company name behind the
brand and its reputation for success or failure.
The line brand strategy
D eglaude Laboratories launched a product brand,
Foltene: a single product associated with a single
benefit, the regrowth of hair. A strong TV advertising
campaign made the market explode and Foltene
became the leader with a single product and a 55
per cent market share. They should have remained
thus, but consumer logic prevailed. Bald people
were not looking for a single product. They wanted
a n all-encompassing service, a total care routine.
They wrote asking that shampooing b e combined
Chapter 13 Brand Architecture
with the Foltene treatment. I n 1982 Deglaude
la unched a mild sha mpoo (w hich wa later u bdivided
according to hair type) follo\ ed by a
daily-use lotion. All this wa by way o f re pon e to
customer demands.
Christian Dior la unched Capture, an anti -ageing
liposome complex for the skin. Fo l l owing its s ucce ,
a first spin-off was soon lau nched: ‘Capture, eye
shaper’, followed by l i p shapers and then othe r
products for the body. The Ca pture l i ne was born.
Thus, to take up Botton and Cega rra’s defi nit ion
( 1990 ) , the line responds to the concer n o f o ffe ring
one coherent response under a s i ngle name by
proposing many complementa ry products . Th is
goes from variations of the offe r, as in the case o f
Capture or with the fragrances o f an a fter have , to
the inclusion o f various prod ucts within one specific
effect, as in the case of Foltene. This is also the case
with Studio Line hair products from l’O real, which
offers structuring gel, lacquer, a spray, etc . Ca 19on
( a Benckiser brand) markets a di shwasher powder
together with a rinsing agent and limesca le inhibi tor.
That these products are completely diffe rent fo r the
producer makes no difference to the consu mer, who
perceives them as related.
It should be clear that the line involves the
exploitation of a successful concept by extending
it but by staying very close to the i n itia l product
( eg Capture liposomes or the Fo ltene princip l e ) .
In other cases, the line is launched as a com plete
ensemble, with many complementary prod ucts
linked by a single central concept ( for Stud i o i t was
allowing you ngsters to do their own hair and give
themselves a ‘look ‘ ) . The eventual extension of the
line will involve only the marginal costs linked to
retailers’ discounts a nd to the packaging. It does
not need advertising. It should be com pared to
the marginal number of consumers that could be
won. As one can see, the line brand strategy o ffers
multiple advantages:
• it reinforces the selling power of the brand
and creates a strong b rand im age;
• it facilitates distribution fo r each line
• extenslOn;
• it reduces launch costs.
The disadvantages of the line strategy lie in the
tendency to forget that a line has limits. One should
only include product innovations th at are very
closely linked to the existing ones. On the other
Part 3 Creating and Sustaining Brand Equity
hand, the inclusion of a powerful innovation could
slow its development. Thus, even though Capture
was the result of seven years’ research in collaboration
with the Pasteur Institute, received three
patents and brought with it a revolutionary antiageing
principle, D ior decided to attach it to a
currently existing anti-ageing line. This did not
prevent the success of Capture, but unnecessarily
delayed it initially.
The range brand strategy
Campbell’s Soup, Knorr, Birds Eye and Igloo all
propose more than 1 0 0 frozen food products. But
not all range brands are this extensive. The Tylenol
range now covers a number of different products.
Range brands bestow a single brand name and promote
through a single promise a range of products
belonging to the same area of competence. In range
brand architecture, products guard their common
name (fish a la proven<;:ale, mushroom pizza, pancakes
with ham and cheese in the case of Birds Eye) .
In the Clarins cosmetic range, products are named
‘purifying plant mask’, extracts of ‘fresh cells’,
multi-tensor toning solution, day or night soothing
cream, etc.
Range brand structure is found in the food sector
( Green Giant, Camp bell, Heinz, Whiskas and so
on), equipment ( Moulinex, Seb, Rowenta, Samsonite)
or in industry ( Steeicase, Faco m ) . These brands combine
all their products through a unique principle,
a brand concept, as is shown in Figure 1 3 .4. The
advantages and disadvantages of the structure are
as follows:
• It avoids the random spread of external
communications by focusing on a single
name – the brand name – and thereby
F I G U R E 13.4 Range brand formation
Bra n d
Bra n d c o n ce pt
P R O D UCTS A B C D . . . . . . . . . . . N
creating brand capital for itself which
can even be shared by other products.
Furthermore, in such a structure the brand
communicates in a generic manner by
developing its unique brand concept. Thus,
the range brand of pet food, Fido, covers
many products but in its advertisement
it only has a taster dog who marks his
approval on a product with a paw print.
This commercial transfers the brand
focalization and its pre-eminence to the
animal. Another approach consists of
communicating the brand concept by
concentrating only on certain of the most
representative products through which the
brand can best express its meaning and
convey consumer benefit. This can then
be shared by other products of the range
which are not directly mentioned.
• The brand can easily distribute new products
that are consistent with its mission and fall
within the same category. Furthermore, the
cost of such new launches is very low.
Among the problems that are most frequently encountered
is one of brand opacity as it expands.
The brand name Findus covers scores of savoury
frozen products. It is a good brand – high quality,
modern, a specialist in frozen products and a generalist
as well because it makes all kinds of dishes.
For years, product names were the names of the
recipes. But these names are banal. Any brand can
claim that it has the same recipe. To enrich the brand
and to express its personality on one hand, and on
the other hand to help the consumer choose from
the mass of products that are o n offer, an intermediate
level of categorization must b e created between
the brand name and each actual product name.
This is the role of specific lines such as:
• ‘Lean cuisine’ that regrouped 1 8 dishes all
recognizable by their white packaging;
• ‘Traditional’ covering nine dishes with
maroon o uters;
• ‘Seafoods’ comprising nine kinds of dishes
and assorted products ( previously simply
called hake cutlets, whiting fillets, etc) in
blue packaging.
Such names for a line throw light on the products
and also help to structure the range in the same way
as retailers organize their shelves. The criteria for
r
I
segmentation and for the creation of families of
products depend on the brand . Thus, should we
make the d istinctions according to the content
(poultry, beef, pork, etc, as in a butcher’s shop) or
according to consumer benefits (light, traditional,
exotic, family orientated . . . ) ?
The line structures the offer, by putting together
products which are undoubtedly heterogeneous,
b ut all of which have the same function. Thus, in
the Clarins cosmetic range brand, the offer is also
made more clear and structured by way of lines.
To assist the consumer in deciphering the scientific
terms used o n the products, the bra n d proposes
lines as one would a prescription. For example:
• the ‘soothing line’ for sensitive skins
includes a mild day cream and a mild n ight
cream as well as a restructuring fluid i n
capsules;
• the ‘slimming and firmness’ line regroups
a n exfoliating scrub, a slimming bath, a
‘bio-superactivated’ reducing cream and
an ‘anti-water’ oil.
The Clarins offer ceases to be a long list of
creams, serums, lotions, balms and gels and now
Chapter 13 Brand Architecture
fo rms structured and coherent groups as een in
F i gure 1 3 . 5 .
The maker’s mark strategy
For many yea rs the B e l logo h as been syste matically
marked on the packaging of c heeses prod uced by
th i s company: La ugh ing Cow, K i r i , M i n i Babybe l ,
Leerdamm er, Boursin a n d other brands. But wha t
does Bel mea n ? Not h i ng else was done to e x pl a i n
the brand . It was the maker ‘s mark, the make r’s eal,
a proto- brand in the sense that it d i d not see k to
build itself a territory of mea n i ng, of emotion. The Be l
company added i ts seal to authenticate the product
and guarantee its provena nce. The fu nction of th is
maker’s seal was to create a recognition sign identify i
n g the industrial group that made it. Consumers
are not worried about this, but this sign is aimed
essentia lly at distributors and depa rtment heads. I t
is also important i nternally, fo r all the international
cheese-making companies acquired, who see in the
application of this seal to th eir prod ucts, the sign of
their full integration into the Bel family.
I n formal terms, in relation to the p revious a rch i tecture
where the corporate brand i s com plete ly
F I G U R E 13 . 5 Range brand structured in lines
P R O D U CTS
Crea m s S o l u t i o n s F l u i d s G e l s Baths etc . . .
Sooth i ng l i ne
S l i m m i ng a n d
fi rm n ess l i ne
L i n e Y
Part 3 Creating and Sustaining Brand Equity
a bsent, this strategy is characterized by a discreet
corporate logo, giving pre-eminence to the commercial
brand. In a certain way, the presence of 3M
on all its mass-market products must be a mystery
in the eyes of its consumers, if they notice it at all.
From this point of view, the architecture is close to
that of the ‘maker’s mark ‘ . In the United States,
where 3 M is better known, the application of the
3 M logo plays more of an endorsing role.
Endorsing brand strategy
Everyone recognizes famous car brands such as
Pontiac, Buick and Chevrolet in the United States or
Ope I in Europe . Next to their logos and to the signs
of the dealers of these brands we always see the two
letters : GM. It is obviously General Motors, the
endorsing brand. Again, what is the link between
the cleaner Pledge, Wizard Air Freshener and Toilet
Duck ? They are all Johnson products. The endorsing
brand gives its approval to a wide diversity of products
grouped under product brands, line brands or
range brands. Johnson is the guarantor of their high
quality and security. This having been said, each product
is then free to manifest its originality: that is what
gives rise to the different names seen in the range.
Figure 1 3 . 6 symbolizes endorsing brand strategy.
As one can see, the endorsing brand is placed
lower down because it acts as a base guarantor.
Furthermore what the consumers buy is Pontiac or
F I G U R E 13.6
Pro m is e A
P r o d u ct o r
r a n g e A
B ra n d A
E n dors i n g brand strategy
Pro m is e B
Pro d u ct o r
r a n g e B
B r a n d B
Opel: they drive choice. General Motors and Johnson
are supports and assume a secondary position.
The brand endorsement can be indicated in a
graphic manner by placing the emblem of the
endorser next to the brand name or (when signed
above, it acts as maker’s mark ) by simply signing
the endorser’s name.
The advantage of the endorsing brand is the
greater freedom of movement that it allows. Unlike
the source brand, the endorsing brand profits less
from its products. Each p articular product name
evokes a forceful image and has a power of recall
for the consumer. There is little image transfer to
the endorser.
The endorsing brand strategy is one of the least
expensive ways of giving substance to a company
name and allowing it to achieve a minimal brand
status. Thus, we can see the name Bayer on packets
of garden products and Monsanto on Round Up .
The high quality of these brands is guaranteed by
the names of these major organizations. On the
other hand, through their presence in everyday life
these companies become more familiar and close
to the people. Since the scientific and technical guarantees
are assured by the endorsing brand, product
brands can devote more time to expressing other
facets of their personality.
Therefore, as one can see, there is a division
of roles at each stage of the branding hierarchy.
The endorsing brand becomes responsible for the
Pro m is e C
Pro d u ct o r
r a n g e C
B r a n d C
Pro m i s e N
Pro d u ct o r
r a n g e N
B ra n d N
E n d o rs i n g b ra n d
guarantee that is essential for all brands and, today,
these guarantees not only cover areas such as
qual ity and scientific expertise, but also civic responsibi
lity, ethics and environmental concerns. The
other brand functions are ass umed by the specifically
named brands: distinction, personalization and
even pleasure ( Kapferer and Laurent, 1992 ) .
Umbrella brand strategies
Under the term ‘ umbrella bran d’, we find in fact
two modes of implementation in companies, the
first relatively liberal towards products and subsidiaries,
the other exercising real control. We shall
examine both in turn : the first is in rea lity a house
of brands, the other a branded house.
T h e f l e x i b l e u m b re l l a b ra n d
The umbrella brand strategy is characterized by a
single brand level: the products are not given a
daughter brand. They may possibly be given code
names, but only with the aim of identifying them
in catalogues or price l ists. Philips televisions are
known as ‘televisions’ ( whereas Sony’s is known as
a ‘Tr initron ‘ ) , Philips razors are known as ‘ razors’,
and so on.
Unlike the prod uct brand, where a brand relates
to a single product and vice versa, the case of Philips
underlines that here the umbrella brand covers
several product categories, both figuratively and
i n reality. This is the principal a dvantage of this
strategy, moreover: offering a common umbrella,
a common name, to a highly diversified range.
It is important i n these a nalyses to distinguish
between two types of umbrella brand, according to
the degree of freedom accorded to the products,
divisions or branches. This flexible umbrella strategy
is currently typical of Japanese, Korean and Chinese
brands. Mitsubishi sells cars, electrical products,
lifts and nuclear plants under its name, but a lso food
products under the Three D iamonds brand ( the
Mitsubishi symbol is made up of three diamonds).
Toshiba is only known in Europe for its laptop
computers, but you only have to visit the Tokyo
department stores to see Toshiba sewing machines
and frying pans. There, Toshiba is rather like Phi lips
i n Europe.
In fact, the umbrella brand is typical of Asian
organizations, where sales subsidiaries of Japanese,
Korean or Chinese companies have a high degree of
Chapter 13 Brand Architecture
freedo m . What is req u ired of them i to esta b l i h
the mselves in the country, not to make a ve , a n d
to conquer the market . H i storica l ly, the pen etra tion
of the United States and Europe by J a pa n e e
equipment p roducts ( radio, hi-fi, telev ision, p h otography,
reprographics, teleph one , IT, ga m e and s o
on) was carried out via the exportation of products
made in Japan. The distribution su bsidia r i e were
tasked only with selli ng the m ; they were man aged
by local people, since the J a panese d i d not like
working a broad. Moreover, the e m p h a s i s p l aced
locally on sales was convenient for su bsid ia ries
essentially made u p of in-cou ntry ma nagers. Besides
the sales obj ectives, and respect for corporate eth i cs,
there were few constraints on the managers. There
was a point on the brand map, if not the gra p h i c
map, but no value platforms. The J a panese gl obal
success was achieved on the basis of the advan tages
and the low prices of the products themselve ,
carried by qual ity commerc i a l o rganizations, u n der
the um brella of a b rand whose dispers i on a Iso contributed
to build ing its recogn ition. The u m b re l l a
brand was a name, not a vision find ing embod iment
in services and prod ucts . This name was gene ra l l y
the corporate name, that of the industrial gro u p .
This i s why the subsidiaries had a h igh degree
of freedom: their marketing comm unications were
carried out by country. Within the same cou ntry,
over several years, the advertising campaigns of
Toshiba hi-fi, Toshiba lo-fi, Toshiba telev isions,
not to mention microcomputing, were not at all
coordinated. Each had its own brand slogan and
emphasized different values, and even worked with
a different advertising agency.
It is known that brand strategies have o rganizational
implications. The supple, flexi ble umbrel l a
architecture gives the subsidiaries a great deal of
F I G U R E 13 . 7
Pro d u cts o r
. services
S p e c i f i c
co m m u n icati o n s
by p r o d u ct
• o r s e rvice
A
A
U mbrell a brand strategy
B r a n d
B c . . . . . . N
B c N
Part 3 Creating and Sustaining Brand Equity
autonomy, which can motivate them and make it
easier to recruit bosses with entrepreneurial profiles,
which is very useful during the phase of conquering
market shares. The international unity is through
products, imported from Japan.
Another advantage: since the name is more a
corporate name than a brand, there is no hesitation
in placing it on products that are highly disparate
from a Western point of view: sewing machines,
saucepans and microcomputers . This is rather like
the now-dead Thomson brand. In Asia, however,
the more powerful a group, the more it is respected.
From this point of view, manufacturing everything
helps to increase power.
On the communications level, the emphasis is
placed on the specific qualities and advantages of
the products . Therefore there is little intangible
added val ue, which would be very useful once the
conquest phase is over. When the markets mature
and the products become equivalent, it is then
necessary to turn to other levers of attraction and
attachment. O n the other hand, it does b uild the
country brand.
The disadvantages of this approach make themselves
felt later in the brand’s life . It is devoid
of emotional content: it is not a source of aspiration,
of tacit agreement, of affective attachment.
Admittedly, it is perceived as a source of quality
products, b ut it is also seen as cold and distant.
As the global director of the Toshiba brand ( a post
newly created precisely to remedy this state of
affairs ) told us one evening, the brand could be
compared to a highly technically skilled work
colleague, whom you might ask for help, but whom
you would not invite home for dinner.
In the West, the notion of a brand was forged on
the notion of speciality. Procter & Gamble founded
a school of thought that was taught for years in
business schools the world over, where a brand
does only one thing; a single product rigorously
produced and varying according to its formats or
forms (washing powder, washing liquid, tablets or
pearls ) . We now know that this vision is restrictive.
O f course a brand can only have one value system
and make one central promise, but these may be
applied to different products. The global success of
Bic testifies to this, as does that of Nivea, l’OreaJ
Paris, Virgin and Amazon, not to mention distributor
brands such as the Carrefour brand, which by
its construction covers m ultiple product categories.
The problem with the flexible umbrella brand is
that the value system is not perceived; and it is
through these values that the tacit agreement and
the affective relationship are developed, beyond
the satisfaction linked with the product or the excellence
of the service. There is therefore a double
rupture: no value link expressed between the corporate
and the products, or b etween the products/
categories themselves.
By signing its products without explaining why,
the brand is diluted. Like an elastic band, it stretches
and breaks. In the chapter on brand extension we
saw that the brand may indeed bring together
intrinsically different products, on condition that
it gives them a common meaning. This is the case
with l uxury brands, b ut also Virgin, for example,
or Apple. We know that the brand functions as
a concept, and therefore has power to integrate
obj ects that are different at first glance. Signing
products from the ballpoint pen to the razor, to
cigarette lighters, and to kayak canoes, with the
name Bic is to say that there is Bic in each of them.
Therefore, the common name presents a group of
common values embodied i n these different categories.
The flexible umbrella structure offers none of
this, other than generic propositions such as ‘making
q uality products ‘ . To achieve this, it is necessary
to move to the encompassing umbrella, or masterbrand,
strategy.
T h e a l i g n i n g u m b re l l a b ra n d
( m a s t e r b ra n d )
This is the second version of the umbrella brand.
At first glance, in formal terms, nothing distinguishes
it from the previous version: the company
still accepts only a single brand for the whole, and
consequently imposes descriptive n ames for the
products and services or divisions and branches .
Here we find s ub-brands.
In practice, however, a gulf separates these
two o utworkings of the umbrella brand. Here the
parent brand dominates: it provides not j ust a
name, but a frame of reference behind which everything
should align, in order eventually to become
the embodiment of it, the l iving spokesperson.
Here the brand is the surrounding framework. This
is the c learest example of what we call a ‘ branded
house’ .
The master brand prototype is Nivea. A Nivea
product or communication can b e recognized at
a glance. Nivea is active i n a large n umber of
categories: moisturizing creams, sunscreens, deodorants,
shampoos, beauty products and make-up.
Everywhere, in each of its categories, it faces specialist
brands. It counters these with prod ucts e m bodying
its two central values, ‘ l ove and care ‘ . This
embodiment begins with the composition of the
products themselves, their harmlessness, their softness,
and extends to the manner in which they are
communicated. Everything is codified in a centra lized
manner. The master brand is strong because it
brings together a broad offering of prod ucts under
h ighly differentiating common values . At Nivea, the
categories are each sold under a variant of the name
Nivea and a descriptor of the fu nction or target. In
this way, we have Nivea Body, Nivea Sun, Nivea
Hands, Nivea Visage and so on.
Other examples of this strategy are found in B2B,
where there are strong brands such as Legrand and
Hager for low-voltage electrical appliances.
The encompassing umbrella architecture is also
known as master brand. The name ‘masterbrand’
implies a guardian of the temple: a person, j udge or
a uthority capable of policing, not dissident logos
but proj ects, i nnovations and even advertisements
that do not ful ly embody the brand’s central values,
since these are what dil utes its promise. The brand
is only as strong as its weakest link.
The brand power conferred by this architecture,
when properly implemented, is remarka ble. It offers
economies of scale l i nked to the variety of prod ucts
and markets that the brand can cover while creating
a brand i dentity ( that is, a group of values that
are h ighly differentiating and relevant in each of
its markets ) .
Korean companies, which 2 0 years ago were
content to imitate Japanese groups, even to their
practice of the flexible umbrella brand, have acquired
a strong global image by changing their brand
architecture. LG has a clear brand platform that is
imposed on all divisions and countries. The same is
true for Samsung today.
In Europe, since 2004, Philips has been attempting
to b ecome a master brand, a strong surrounding
framework. The new managing d irector has
i nstalled a new ‘One brand’ motto for all the divisions
of this global group. It is d ifficult to imagine
the c ultural revolution created in this company by
such an apparently simple declaration. Let us consider
how it will differ from the situation before
2004, as I learnt i n the Netherlands on a consult-
• ancy trIp:
Chapter 1 3 Brand Architecture
• Philips is active i n many counr rie under
anoth er brand name. Thus Philip razors
are sold under orelco i n the U n ited State s .
This is why Phili ps i s u n k n own in the U n ited
States. It i s th erefore neces a ry to replace the
best- kn own razor brand in the U n i ted State
with an un known name.
• Philips does admittedly act u n der it n a m e
alone in televisions and medical equ i p m e n r
and light bulbs, but e verywhere i n the wor ld
it goes by the name P h i l ishave fo r razo r s .
Therefore, Phil ish ave m ust be a bolished.
• Moreover, the di vision of sma l l house h o l d
app liances functi ons with fi rst-name b rand s
in order to differentiate its p rod ucts from
the competition and m a ke them ta rs.
It would therefore be necessa ry to cease
this practice: and this division i s the most
profitable in the group.
However, one cannot b u ild a mega-brand by ba l k
an ising it. It needs a platform (central val ues,
core identity ) , and support at the highest levels o f
ma n agement. The products, di visions and b r a n c hes
must reposition themselves in order to presenr the
central values of the brand at home and abroad.
Hence a study was carried out to define the platform
of the Ph ilips brand and consider its consequences
both at the leve l of the n ew pro d u cts and
services to be created, and at the commun icati ons
level.
Source brand strategy
This is identical to the u m brel l a brand strategy
except for one key point – the prod ucts have their
own brand name. They are no longer called by one
generic name such as eau de toilette or ea u de
parfum, but each has own name, eg Jazz, Poison ,
O p i um , Nina, Loulou, ete. This two-tier brand
structure, known as dou ble- branding, is s h own i n
Figure 13 . 8 .
Since this strategy is often confu sed with the
endorsing brand strategy, it is important to spec i fy
the differences at the beginning. When Nestl e put
its name on the chocolate Crunch and Gala k , on
the bars Yes , Nuts and KitKat and on escafe,
Nesquik, etc, the corporate brand is endorsing the
quality of the mercha ndise and acts as a ma ker’s
mark. The Nestle name dispels the incertitude that
Part 3 Creating and Sustaining Brand Equity
F I G U R E 13. 8 Source brand strategy
Perso n a l bra n d
n a m e s
S pecific
co m m u n i c a t i o n
Pro d u cts
B r a n d A
Pro m i se A
Prod u cts A
o r l i n e A
certain products can create. Nestle takes a back
seat position. The product itself is the driver of the
consumers’ choice; it is the hero to the extent that
few customers of Crunch attribute it to Nestle. On
the contrary, when we see the Yves Saint Laurent
name on a perfume such as Jazz, this name is more
than a simple endorsement. Here, it is the brand
name which holds sway and which accords Jazz the
seal of approval and the distinction which it would
not otherwise enj oy. Yves Saint Laurent is the driver
of p urchase, not Jazz. Jazz is another key to the
door of the Yves S aint Laurent c ultural universe.
The problem with many brands is that they have
converted from source brands to endorsing brands.
Within the source brand concept, the family spirit
dominates even if the offspring all have their own
individual names. With the endorsing brand, however,
the products are autonomous and have only
the endorsing brand in common. Today, where do
Nestle, Kellogg’s or Kraft stand ? What about D u
Pont or Bayer, Glaxo or Merck ?
The benefit from the source brand strategy lies in
its a bility to provide a two-tiered sense of difference
and depth. It is difficult to personalize a n offer or a
proposition to a client without any personalized
vocabulary. The parent brand offers its significance
and identity, modified and enriched by the daughter
brand in order to attract a specific customer segment.
Ranges having ‘ Christian names’ allow a brand which
needs to maintain its own brand image to win over
newer consumer categories and new territory.
S o u rce b ra n d
B r a n d B
Pro m i s e B
Pro d u cts B
o r l i ne B
B r a n d C
Pro m i s e C
Pro d u cts C
o r l i n e C
The limits of the source brand lie i n the necessity
to respect the core, the spirit and the identity of the
parent brand. This defines the strict boundaries not
to b e infringed as far as brand extension and also
product communication are concerned . Only the
names that are related to the parent brand’s field of
activity should be associated with it. All product
a ids should share the same spirit. If greater freedom
is sought, then the endorsing brand strategy is more
suitable.
Gamier for example wanted to become a source
brand and abandon its previous e ndorsing brand
strategy. This is a delicate process for it means moving
from patchwork to u nity.
Becoming a source brand: from
patchwork to alignment
Companies need to improve their efficiency on a
regular basis. One way of doing this is to p ut an end
to the n atural dispersion of brands and identities,
and reorganize supply u nder proper parent brands
that fulfil more than a n endorsing function. These
parent brands would be a source of strong, differentiated
and unique values shared by all products and
sub-brands, which also have their own particular
personality based on their target group, product
territory and specific function. What the present
work refers to as a ‘source brand’ partly corresponds
to what some people h ave called a ‘ branded house’
. I
(as opposed to a ‘patchwork’ or ‘house of brands’ ) .
It should be remembered that, unli ke the umbrella
brand, the source brand is a strategy with two layers
of branding.
So how does a company convert a ‘patchwork’
into a real ‘house ‘ ? The first thing it has to do is
define the identity of the brand for the future . The
real identity of a brand lies within the brand itself,
while its future l ies in its ability to adapt to the
markets. It is therefore by ana lysing the roots and
origins of the brand, its early products and performance
that it is possible to isolate its core, its key
values, the source of its influence and legitimacy.
But this ana lysis must then be considered carefully
within the context of the development of tomorrow’s
markets and consumers.
Gamier provides a good illustration of this
process. Until 2002, this intern ationally renowned
brand was known as Laboratoires Gamier. Its
task was to become the other international brand
of the mass-market network, alongside I ‘ Oreal
Paris, which was positioned as a more glamorous,
more expensive product within the same shelf
ranges. It was a question of finding values that
were positive, aspirational, internally and externally
motivating, and had popular appeal since the
brand had been allotted a more accessible market
• • pOSItIOn.
Historically speaking, the origins of Laboratoires
Gamier date from 1 9 04, when M . Gamier first
invented a herbal hair tonic. This original product
a lready had some of the key attributes of the brand
– naturalness and beauty care. Some time later, after
the Second World War, a h ugely successful shampoo
called Moelle Gamier not only revital ized the ‘genes’
of the brand but also bo osted business. Relaunched
in 1 9 8 6, the brand was extended by its sub- brands
– Synergie ( cosmetics), Ambre Sola ire ( s un care ),
Graphic ( hair care ) , Ultra D oux ( skin care ) and
Lumia ( hair colour ) .
The brand achieved international renown a nd
established a strong position o n several European
markets. However, its sub-brands declined in popul
arity and remained regional. All except one, that
is, which had already been extremely successful
outside Europe and appealed to the younger generation
in countries throughout the world – Fructis,
the first strengthening shampoo with active fruit
concentrates. Fructis was a direct descendant of the
Gamier l ine but with a more modern image. The
real reinvention came with Fructis Style, a range of
Chapter 13 Brand Architecture
revol utionary styli ng product conta i n i ng fru i t wa.
and characterized by a complete range of trong,
tactile sensations – the colou rs, consi tency a n d
aroma of fruit. With Fructis, a new generation o f
sensual products was born .
But to conquer the world ma rket the brand
needed a new iden tity that, wh i l e respecti n g its
o rigins, would nevertheless make it an aspi rati onal
brand for modern young people worldwide. Fru ctis
and especially Fructis Style would be the new prototype
for the b rand, while th e i r casual and i ro n i c
tone would provide the basis for its reinventi o n .
What were the consequences for Garn i e r ? I n
order to be attractive and acce sible to young
people in cou ntries thro ugho ut the world, the brand
had to change its name from Labo rato i res Ga rn i er
and simply become known as Garn i e r. It was n o
longer a scientific or a French brand, it was accessible
and internati onal. Furthe rmore its b rand contract,
its values, were now written i n English.
How does Gamier define its aims ? ‘Garnier
believes in bea uty thro ugh nature. Scientifica 1 1 y
developed and enri ched with se lected n atura l ingredients,
our products help you look hea lthy and
feel good every day.’ Th is contract is o utl in ed i n
six core values :
• Natural high tech ( which disti ngu ishes i t
from Yves Rocher, which is not high tech,
and I ‘ Oreal Paris which does not foc us o n
the natural element ) .
• Healthy bea uty: Gamier is a healthy brand,
which does not use top models, but
unknown models who look and feel good
( like the girl next doo r ) .
• Total experience: Gamier is not selling j u st
a product but a complete experience that
appeals to all five senses .
• Universa l : it is multi-ethnic, multiracial,
multigeneration.
• Accessible, as evidenced by price and
distribution.
• Positive irreverence: this is a distinctive
personality trait, fo und in all Gamier
advertisements.
How was this n ew ident ity proj ected across all
Gamier’s daughter brands ?
• The first stage was one of identificati on.
Apart from modifying the name, a new logo
Part 3 Creating and Sustaining Brand Equity
was created in green, orange and red, the
colours of fruit but also traffic lights.
• The next stage involved bringing the subbrands
portfolio into line with the source
brand. Since Gamier is a source brand,
the sub-brands must reflect its core values .
So the Neutralia sub- brand (shower gel )
was abandoned because its clinical purity no
longer corresponded to the Gamier ‘house’
image, while the Ultra Doux brand was
extended to replace Neutralia. Similarly, the
Synergie sub-brand (cosmetics) became Skin
Natural which was much more in line with
Garnier’s values.
• The third stage consisted of developing
business by organizing an attack on growth
markets, that is, deciding which sub-brands
would target which countries and which
segments. What would be the consequences
in terms of range and adaptation to multiple
niching (universality value) ?
• The fourth stage involved defining how the
advertising was to be handled. What
distinguishes a Gamier advertisement? They
all begin with a light-hearted statement of
the problem, followed by the presentation
of the solution, and involve a wide range of
different people, all looking and feeling good
and reflecting the cultural and racial diversity
of the country in question. The slogan says
‘Take care of yourself’ .
• In the fifth stage, the promotional principles
were established – an accessi ble brand that
offers a full experience – and Gamier
developed massive sampling and street
marketing initiatives involving direct contact
with cons umers in all countries.
It is significant that the website is called
GamierBeautyBar.com . Vi sually, it is presented like
a real ‘house’ where you can visit each room and
discover and/or personally experiment with one of
the Gamier sub-brands. The ‘branded house’ has
constructed a ‘virtual house’ in which all the brands
in the family are brought together with a view to
offering an intense product experience. Gamier’s
(male and fe male) customers enter via the Gamier
Hall from where they can go to the Beauty Lounge,
Style Room, To nic Area or Game Zone and try out
their future looks, carry out personalized diagnostic
tests or simply experiment and develop their customer
loyalty.
From this it can be seen that the source brand is
a structure that restructures all its parts. Many
groups use this type of brand architecture to give
greater impact to their diverse product ranges by
making them converge on a common image. For
example, all Danone products and brands now
focus on health, the core value of the source brand,
in the knowledge that there are seven types of
health, and therefore seven different ways of presenting
it. Danone has also changed its status from
an ‘endorsing brand’ to a ‘source brand’.
Mixed approaches within groups
The six branding strategies presented here are
models, typical cases of branding. In reality, companies
adopt mixed configurations where the same
brand can be, according to the pro duct, range,
umbrella, parent or endorsing brand. For example,
l’Oreal is a range brand of lipsticks. It is a source
brand for Studio, Elseve or Plenitude. The hybrid
character of the usage of the brand l’Oreal and the
strategies adopted reflect its willingness to adapt
to the decision-making processes of consumers in
different sub-markets (hair care products, perfumes
or cosmetics) or according to the distribution channels
(ie self-service or specialist stores ). In certain
cases, l’Oreal guarantees reliability and technical
capacity. In others, it wants to achieve recognition
(ie in cosmetics) and therefore needs to place itself
to the forefront. And finally, in still other cases,
l’Oreal has to be invis ible – either to avoid being
associated with a low-price segment or to avoid
hurting one of its prestige products. Nevertheless,
many hybrid situations result out of the series of
small decisions that are taken as and when a new
product is launched. Due to the lack of an overall
plan for a brand’s relationship with its products, a
number of non-coherent branding decisions often
exist side by side.
3M provides an interesting example of the accumulation
of separate branding policies, with as many
as five denominational stages (quintuple branding).
This is shown in Figure 13.9. 3M is a company
fo cused on high-tech research into industrial and
domestic applications of adhesives. This covers a
vast area which includes glues, obviously, but also
films, cassettes, medical plasters, transparencies and
Chapter 1 3 Brand Architecture
F I G U R E 1 3.9 A case of brand proliferation and di l ution of identity
Med ical Vi deo
a d h es ives
Ove r h e a d
p rojecto rs,
c a m e ra s Post-it cassettes
E xtra ,
M a g i c y z w
3 M m e d i c a l d iv i s i o n
( n a m e of b r a n c h ,
n o t a b ra n d )
3 M
overhead proj ector products, etc. The 3 M name is
synonymous with seriousness, power and heavy
R&D. But this also leaves an image of coldness.
Thus, to h umanize the contact with the general
buyer, the umbrella brand Scotch was created. Video
cassettes, glue sticks and sellotape are all branded
Scotch directly. But for the scouring pads, on the
other hand, a line brand called Scotch-Brite was
created. To counter the challenge of a rival product
from Spontex ( who simply call them scouring pads)
Scotch replaced the generic name by a particular
name, the ‘Raccoon’ ( j ust like the Vol kswagen
Beetle ) . This differentiated its product and explained
its advantages i n a unique manner and gave it a
closer and more friendly image.
The ‘ Raccoon’ itself has been expanded i nto
many versions – green, blue, red – depending on its
shape and use. For its general consumer products,
such as sponges and glues, 3 M was used as an
endorsing brand with a signature i n small print.
Curiously enough, 3 M is scarcely i n evidence on
Scotch cassettes. Is this to d istinguish better from
the video cassettes marked clearly and exclusively
3 M and targeted at professional use? In fact, while
3 M provides a guarantee of good performance and
Scotch ( m a sterbra n d )
‘ R a c c o o n ‘
( n i c k n a m e )
Scotc h – B r ite
a n endorsing brand for genera l consumer p rod ucts,
it serves as an umbrella brand for professio n a l
products: all the power and significance of the
3M name is reflected in prod ucts such as came ras,
overhead proj ectors and dental cement (com ing
from the 3M health division ) . Post-it, the famous
‘adhesive notes that serve as a memory tool o r
a message carrier ‘ , is also signed 3 M . In order to
patent this invention in a better way and to defi n e it
in a better manner than the long descr i ption used
a bove, that it be given a proper name was to be
expected .
Th us, depending on the level of profession a l enduse
that a product has, or the need for an up-to-date
image of exce l lence and perfo rmance, it is ei ther
signed 3 M in a prominent manner or even perhaps
exclusively. If not, 3 M is present through the brand
Scotch. Perhaps this is why the sellotape, Scotch
Magic, used the name 3 M only as a recall too l . On
the other hand, aerosol glue for comm un ication
professionals bears the Scotch name in small print
and 3 M in large letters. There are also differentiated
product advertisements for the ‘Raccoon’, genera l use
sellotape, Scotch cassettes and Post-it. Beyond
the endorsing brand, there are no common codes
Part 3 Creating and Sustaining Brand Equity
of expression which appear independent in form
and intent.
C hoosing the appropriate
branding strategy
Which is the best branding strategy? Procter &
Gamble are firm s upporters of product brands;
are they right and l’ Oreal, their more flexible competitor,
wrong ?
Each type of brand strategy has its own advantages
and disadvantages, as has been described.
However, a simple list of the pros and cons does not
provide a procedure for making a choice in a given
company in a given market. The choice of brand
policy is not a stylistic exercise, but more a strategic
decision aimed at promoting individual products
and ranges as well as capitalizing the brand in the
long term. It should be considered in the light of
three factors: the product or service, consumer behaviour,
and the fi rm’s competitive position. Brand
policy is a reflection of the strategy chosen by a
particular company in a specific context.
What parameters should be taken into account
when choosing a branding strategy ?
1 Tying in with corporate strategy. Branding
strategy is the symbol of corporate strategy.
For example, in 2 0 0 3 , Schneider Electric,
one of the leaders in the field of electrical
distrib ution and industrial control,
decided to revitalize its Merlin Gerin and
Telemecanique brands, which were well
known to research departments and electrical
integrators and installers throughout the
world. In so doing, Schneider ended a n
initiative launched some 1 0 years previously
with a different aim in mind, namely to
replace individual brands with a single,
group brand. The company’s new director,
who had come from Steelcase, outlined the
strategic positioning of Schneider Electric
against GE, ABB and Siemens. Compared
with these general electrical and electronic
giants, Schneider Electric is not a small
general electrical company but rather likes
to see itself as a m ulti-specialist company.
In fact, because it sells intermediate products,
its customers are looking for a specialist
company. On the other hand, when
compared with its many single-specialist
competitors, Schneider Electric is more of a
general electrical company. So if it wants to
position itself as a m ulti-specialist company,
the specialities must be offered by specialist
brands, united by a group brand, a single
entity, which facilitates customer relations.
This is why it was decided not to follow
the single-brand path, but to bring the range
of 5 0 product brands together under three
integrated international brands – Merlin
Gerin, Telemecanique and the US company
Square D, in 1 3 0 countries. There is
therefore a Schneider Electric front office
and a Schneider Electric sales force
organized by type of c ustomer, and these
customers are able to purchase products
under different product brands.
Another consequence is that distributors
will once again become the official
distributors of Merlin Gerin or
Telemecanique without there being any
obligation, as in the past, to a utomatically
reference both brands.
Similarly, Groupe SEB, world leader in
small household appliances, decided to form
itself into a multi-brand group, with fou r
international brands – Moulinex, Tefal,
Krups and Rowenta. Why not fol low the
tempting single-brand path, like Philips ?
Precisely because of Philips. The strategy
lies in the art of being different. The single
brand is a n advantage if you are already
a single brand like Philips, one of the few
international brands whose reputation is
based on the fact that it is distributed
throughout the world – even, via its light
bulbs, in the depths of the Amazon basin.
It is basically too late to try to emulate
Philips. In today’s fragmented markets,
with their aggressive distribution networks
and consumer segments, it is far better to
exploit the targeted reputation (in terms
of product and values ) of the brands that
people have bought precisely because they
were brands.
2 Tying in with the business model. In this
• • • • • respect It IS mterestmg to compare compames
within the same sector, since their brand
policy is often a reflection of their busi ness
model, the driving force of their competitive
edge and their profita bility. This can be
ill ustrated by comparing three gia nts of the
European cheese ind ustry – Bel, Bongrain
and Lacta lis. Bel develops range brands
around a central innovative product, thereby
giving rise to an entire range of products
with The Laughing Cow, Kiri or Mini
Babybel signature. Bongrain develops
product brands – Chaumes, Vie ux Pane,
Caprices des Dieux, Haut Segur – while
Lactalis uses a single brand ( President) as
a n umbrella for all its c heeses and butter,
and even milk in R ussia and Spain. So why
the different brand policies ?
In fact, the b usiness models of these
companies are not the same, hence the
different brand strategies. Bel likes to see
itself as the inventor of modernity, antitraditionalism,
accessibil ity and everyday
values. It does not deal in those speciality
cheeses bought as a weekend treat. As the
inventor of modern ity, it must therefore
create brands, with their own particular
shapes and characteristics, that can
subsequently be offered i n a variety of forms
to capitalize on the investment i n promotion.
Bongrain decided to develop processed AOC
(appellations d’origine contr6lees) cheeses to
make them more accessible in terms of taste,
price, preservability and usage. Vieux Pane
is a processed version of the AOC cheese
category called ‘Pont l ‘ Eveq ue’ b ut, as such,
does not have the right to use the name of
the appellation. Bongrain therefore has to
give each of the specialities it creates a new
name – hence the product-brand policy.
The disadvantage of this is that it has to
promote e ach new brand, meanwhile
supporting through advertising many
small volume brands .
The business model of Lactalis is to
segment generic categories in order to bring
them up to date and into line with everyday
life and the modern lifestyle. This model
gives rise to an umbrella-brand policy under
a single brand ( President ) , there are
descriptive names for each of the varieties,
each of the various forms, with low-fat
butter remaining a qual ity b utter,
Chapter 1 3 Brand Architecture
Emmenta l a real Emmenral, and Brie
a real Brie .
3 C ultural parameters . The United State ha
developed the culture of the p roduct brand
– a brand that produ ces a si ngle product.
Ivory, the fo under brand of P rocter &
Gamble, is and c onti nues to remai n a oap,
which explains the company’s reluctance to
extend the brand and even the ideologica I
o pposition of such authors as Tro u t and
Ries who have berated it in the i r work for
the past 20 years. But the US domestic
market favoured th is p rod uct- brand pol i cy.
On the other hand, it also explains why
Eu rope and Japan have been the m a i n
exponents of the u m b rella-brand policy.
Nivea and Nestle a re j ust two of the many
European exam ples. In Japan, apart fro m
the size of the domestic market, the concept
of the company has also co unted for a lot in
the sense that, the more products and secto rs
a company covers, the greater its reputation.
It would simply not occur to the di rector of
a Japanese company not to use the corporate
name to promote all kinds of brand
extensions . Ya maha is a typi cal example,
putting its name to such widely di ve rse
products as motorcycl es and p i anos.
4 Integrating the rhythm of innovations. How
do you develop product brands in a secto r
that updates its offer on an annual basis ? In
this instance, a single-brand policy cove ring
the entire range is preferable, as in the case
of Nokia, Sony-Ericsson, Alcatel, Samsung
and even Whirlpool and GE.
5 Added value. This is the lever on which
a product is based. This point is il lustrated
in Figure 1 3 . 1 , giving the relative pos itioning
of these different strategies. When the added
value in a particular m arket is lin ked to
reassurance, reputation and scale, a singlebrand
umbrella strategy is recommended
(in the world of ind ustry, this is often the
corpo rate brand ) , although a sourcebranding
strategy with two levels – a real
‘ branded house’ like Gamier or l’ Oreal Paris
– can work equally well. However, the more
segmented the market, with top-q uali ty,
personalized products, the more one has to
favour either a portfolio of l’Ore a l product
Part 3 Creating and Sustaining Brand Equity
brands or an endorsing brand strategy that
sanctions the sub- brands (the logic of
Danone or Nestle in dairy products ) .
6 The question of resources. In the a bsence of
sufficient funding, a company should
concentrate its efforts on a single brand,
especially if it is international . The need to
achieve a visibility threshold comes before all
other considerations. However, in case of
co-branding, it is impossible to do so: this is
why Phi lips and Douwe Egberts ( a leading
coffee company ) created a separate name
( Senseo ) to designate their j oint innovation
i n coffee machines.
7 The brand vision. This affects the choice of
architecture. In the cosmetic market there
are thousands of products and many
scientific terms, and innovations are
essential. This is what leads to a n opacity in
the market. Brands serve as milestones and
a question that is frequently asked is which
naming strategy should be used ? There is
no single answer to s uch a general question:
it depends a lot on the brand’s conception
of itself.
Lancome prefers a mono-product policy with only
a small range derived from the leading product
( Progress for the face, eye-liner, a nti-wrinkle cream,
etc ) . Thus, recently the brand chose to launch
mono-products for body care, each with its own
brand instead of a line under one name. There was
Cadence for the body (moisturizer) , Exfoliance
(scrub) and Sculptural (slimmer ) . Lancome is not
an endorsing brand. It wants to be a source brand
and therefore the creator of a precise vision, that
of French elegance. The brand wants to serve as
a vehicle to express:
• the product’s technological level and its
performance;
• luxury as perceived i n a French manner, that
is to say natural sophistication; Lancome
makes laboratories appear charming.
Lancome expresses itself through its products and
the services that surround them (the dialogue and
the advice of salespeople ) . They want a brand policy
that is coherent and easily understandable o n two
levels : the consumer and the seller. But, consumers
actually respond b adly to brand policy in this sector:
they do not usually memorize brand names and
may simply ask for the ‘moisturizing cream from
Lancome’ when they enter the shop. The sales
assistant then explains that there are two : Hydrix
and Transhydrix. The two names help the assistant
explain the existence of m ultiple products. Through
these different product names, the customer u nderstands
the different products and the assistant can
subsequently promote each one by stressing their
individual functions, use and specific characteristics.
Thus, at Lancome, they try to give each product
a different name to reflect a function ( Nutrix nurtures
the skin, Hydrix moisturizes it and Forte-Vital
makes it firmer) or the main ingredient if it is something
new or revolutionary ( eg Niosome contains
niosomes, Oligo-Majors has oligo elements ) . This
naming policy makes the sales pitch clearer because
it explains the differences between the products and
other closely positioned products and therefore
avoids the confusion that could have occurred
had they been i n the same line and under a single
common name.
This would appear to close the argument clearly
between product brands and line brands in favour
of the former as far as cosmetics are concerned.
But, at C larins, as a general rule, there are no monoproducts
and their 70 products are all grouped
into lines. Since Clarins is not Lancome, it does not
have the same image, the same identity or the same
conception of itself. It proj ects itself as a Beauty
Institute and the profession of beautician is very
important to them. This concept implies the use
of many products belonging to the same line, j ust
as in a prescription. A mono-product cannot do
everything and from this arises the preference for
product lines that act in synergy. Clarins wants to
create stable lines that can last for years and are in
conformity with its identity, personality and brand
culture. Finally, it prefers obj ective product promises
rather than a plethora of slogans for mono-products
that all play o n one factor, presently ‘victory over
ageing’ . From this arises the names for their products,
which are always i n the b eauty sector. The
names are always descriptive of the product’s actions
and do not play upon dreams and fantasies as
did Christian Dior when h e launched ‘ Capture ‘ .
At Clarins, names are constituted o f two o r three
words, for example, ‘ Multi-Repair Restructuring
Lotion’ .
In the past, the creation of any new product was
usually also accompanied by the creation of a new
F I G U R E 13 . 10 3 M branding options review
3 M b ra n d i n g o pti o n s rev i e w
Q U E ST I O N 1 Q U E ST I O N 2 Q U E ST I O N 3
Does t h e p r o d u ct I s t h e re C o u l d t h e p r o d u ct
m eet o n e of a u s a b l e j u stify a new
fou r c r i te r i a ? p r i m a ry b r a n d ? p r i m a ry b ra n d ?
N O
N O
Y E S
N O
N O
YES YES
Y E S
name. In christening the new product, the product
manager gave it life . Without a name, the product
had no real existence. Once branded, it had a l ife.
In 1 9 8 1 , at 3M, 244 new brands were created and
registered . In 1 9 9 1 , only four new brands were
created. The same thing happened at Nestle : in
1 9 9 1 , the company created 1 0 1 new products but
only five new brands . The age of brand multiplication
is over. What has led to this change in practice?
The realization that brands are the true capital of
the company has led to this revolution. By capitalizing
on fewer brands, companies had to sustain
their equity by n urturing them through constant innovations
and line or range extensions. Therefore,
the question ‘what name do we choose ? ‘ becomes
‘which new product should we put u nder which already
existing brand ? ‘
Companies with decentralized management are
particularly susceptible to brand proliferation. Thus,
3M, i n spite of its h igh rank in the Fortune 500
companies and its 60,000 products, remained relatively
unknown. One part of the explanation for
this was the excessive number of trademarks with
which it was b urdened : over 1 ,5 0 0 . In order to solve
this problem, 3 M decided to take the cat by the tail
and created a branding committee at the highest
Chapter 1 3 B rand Architecture
Q U E ST I O N 4
Co u l d it j u stify
a new
seco n d a ry bra n d ?
N O
Y E S
D E C I S I O N
3 M bra n d
+ g e n e ri c prod u ct n a m e
E x i st i n g pri m a ry bra n d
G e n e r i c prod u ct n a m e 3 M l o g o
3 M b ra n d
+ g e n e ric prod u ct n a m e
N e w p r i m a ry b r a n d
G e n e r i c p r o d u ct n a m e 3 M l o g o
E x i st i n g pri m a ry bra n d
G e n e r i c p r o d u ct n a m e 3M l o g o
E x i s t i n g p r i m a ry b ra n d
N e w seco n d a ry bra n d
G e n e r i c prod u ct n a m e 3 M l o g o
level (Corporate Branding Policy Comm ittee ) whose
mission was to establish a precise doctrine rega rding
brand policy. Its approval was necessary before
the creation of any new brand. To make 3M become
a real corporate brand, it was dec ided that from
then on 3M would be used to sign or guara ntee all
products ( except the cosmetic line ) . The second
decision was the banning of the use of more than
two names on one product ( as was the case with
Scotch Magic ) in order to abolish brand pileups, as
is s h own in Figure 1 3 . 9 . In order to facilitate the
integration of the new brand policy that capitalized
on a few mega- brands (also called prim ary or power
brands ) , 3 M distri bute to all its subsid iaries a guide
explaining the policy to be followed in case of
branding when faced with a new product. The
creation of this guide led to a drastic fa l l in the
requests for new brand creati on: be it parent brands
( li ke Scotch) or da ughter brand ( l ike Magic ) .
The decision tree shown in Figure 1 3 . 1 0 puts
each i nnovation through four questions which serve
as filters to limit the creation of a new brand to
certain very specific ci rcumstances (l ike Post- it ) . The
first filter question asks if the innovation satisfie
one of the following four criteria: Is it a top priority
innovatio n ? Does it create a new kind of price/
Part 3 Creating and Sustaining Brand Equity
quality relationship ? Does it create a new product
category that did not exist until then ? Is it the
outcome of an acquisition ? The second filter question
asks whether the brand could not be used to
nurture an already existing parent brand in 3M’s
primary brands portfolio. The third fi lter question
seeks to discover whether the new product can
provide the occasion for the creation of a new
parent brand. The last filter question evaluates the
capacity of the new product to j ustify the creation
of a new secondary brand ( da ughter brand) . From
the decision tree emerge six exhaustive branding
possibilities that are based on measurable market
parameters. They go from the extremely simple
( slides for overhead proj ectors from 3 M ) to multiple
level branding ( Scotch Magic, the sellotape from
3 M ) . As expected, the creation of a new brand
( primary or secondary) became the exception rather
than the rule. A n umber of restrictive conditions
had to be fulfilled first: mainly, that the innovation
creates new primary demand and that none of the
existing primary brands are suited.
New trends in branding
• strategies
Companies do evolve in their branding strategies.
An analysis of their international behaviour reveals
significant trends.
Why the rise of branded houses?
An interesting classification of branding architectures
is that of ‘ branded house’ versus ‘house of
brands ‘ . As its name indicates, the ‘house of brands’
refers to a company which operates through wellknown
brands b ut itself remains discreet if not
hidden: this is the case of the ITW ( Illinois Tool
Works) operating with s uch brands as Paslode or
Spit, and well known in professional circles. Procter
& Gamble and Georgia Pacific also operate that
way.
The branded house is the inverse case: the company
itself is the one and single brand, acting as
a banner and a federating force. For Aaker and
Joachimstahler ( 2 0 0 0 ) , the models of such architecture
are GE ( GE Capital, GE Medical and so on)
and Virgin. In fact, it is over-restrictive to assimilate
the branded house to this type of case. The branded
house is a strategy by which the corporation is the
source of reputation and the federating force . This
can be achieved by two branding architectures:
the corporate umbrella brand ( Sony, Philips, GE
and Virgin are examples ) , and the corporate source
brand, where there exist sub-brands or branded
s ubsidiaries, but the leader is the parent company.
This is typically the policy followed by HSBC, which
puts its name or logotype before that of all s u bsidiaries,
as long as these subsidiaries keep their name.
Two brand architectures correspond to the socalled
‘house of brands’: naturally what is called the
product brand approach, and also the endorsing
brand approach. When 3 M p uts its name at the
bottom of all its products, is it really driving customers’
perception of value ? No. Although present,
visibly it remains discreet: this is the sign of a ‘ ho use
of brands ‘ . The brands of the portfolio act very
independently.
Paradoxically some corporate umbrellas are also
very close to being quasi houses of brands . This
may look as a contradiction with what has j ust
been said. In fact, the whole issue is that of power
and organization. Take Toshiba for instance. This
conglomerate is organized in b usiness u nits: computers,
hi-fi, television, cookware ( in Japan) and so
on. Not only are the business u nit directors totally
i ndependent, the country managers are also very
independent. Their role is to sell the products
coming from Japan. As a consequence, there is n o
desire at a l l to coordinate the communications
between b usiness u nits, and for a given b usiness
unit between countries. The result is that although
they wear the same name, Toshiba hi-fi p roducts do
not have the same image as Toshiba computers,
Toshiba television sets and so on. The Toshiba
corporation up until now never thought of itself
as a brand that needed to be managed globally as
such. It is only recently that a VP was named with
that obj ective, with worldwide responsibilities and
a uthority. His or her first task will be to establish
the Toshiba brand platform and to enforce it
throughout a l l communications of any product in
the world. Philips is itself now acting under the
‘one Philips’ internal motto .
Why d o so many organizations move towards
this brande d house architecture to recreate identity
where there is diversity, fragmentation, if not a
p atchwork ? In modern developed markets, unlike
the emerging ones, it is no longer sufficient to b e
known. One must also cons istently evoke a set of
values and stimulate emotional resonance. This
supposes some discipline and less a utonomy. Salesoriented
organizations, such as those of Korean and
Japanese compan ies, assign high sales objectives
to their country managers. In exchange they have a
lot of freedom. This is why their communication
is generally managed at the local level. Creating
a branded house will meet resistance because one
source of a utonomy, and not least, advertising
freedom, will be affected. However, a branded house
does not automatically mean a global campa ign: the
spirit of the brand may emerge through different
and even local ized communications.
Loyalty needs more transverse
brands
There is another reason for changing brand strategy
– when the emphasis shifts from product logic
to customer logic, from a desire to conquer new
markets to developing customer loyalty. Accor
Hotels, the European leader i n the hotel industry, is
a good example of a company that was able to react
and modify certa in fundamental principles of its
brand policy. Accor owes its success to the creative
brilliance of its two founders who invented the
product brand i n the hotel sector. Novotel, their
first hotel chain, was based on the concept of total
standardization – whichever hotel they stayed in,
busi nessmen and women felt at home, down to
the very layout and decoration of the rooms. Then
they covered the d ifferent market segments with
other product brands: Formule 1, Etap Hotels, I bis,
Mercure, Novotel, Sofitel and S uit’Hotel i n Europe,
and Motel 6 in the United States.
According to the original logic, Accor – the
n ame of the holding company – was limited to that
single function and was therefore invisi ble. Then, in
view of the requirements of stock exchange valuation,
it was decided to make the corporate brand
more visible. It began to appear in small print on
the hotel brochures, before being incorporated as
the trade name – Accor Hotels – in the actual logo
of each product brand.
The growth of the group’s market share recently
led to another reassessment: the decision to move
from individual loyalty programmes for each brand
to a corporate loyalty programme (Accor Hotels
Favourite Guest ) .
Chapter 1 3 Brand Architecture
It was th is same need to d ve lop l oya l ty that
led l’Oreal Paris to break with it h i toric brand
strategy. The decision was made in r e pon to
Nivea, whose simple strategy maximi zed b rand
loyalty within an increasingly broad po rtfo l i o o f
su b- brands that were in di rect com petition \ ith
the brands in the l’Oreal gro u p . L’ O real rea l i zed
the li mitations of a fl ags h i p-brand strategy in whi h
l’O rea l Paris merely endorsed a la rge nu mbe r of
independent sub- brands – El seve, Elnet, P l enitude
and so on. Apa rt from the fact that the p u b l icity
b udget was fragme nted , there was no e ffective
capitalization. The group the refo re switc h ed from
a ‘ h o use of b rands’ l ogic (w ith l’Orea] Paris a
the endorsing b rand ) to a ‘ b randed h o use’ l ogic, a
source b rand with a basic un ity and a very distinctive
form. Th i s is when the so-called ‘ d ream tea m ‘
appeared on the international scene – a collection
of internationally renowned top models and sta rs,
each p romoting a sub- b rand fro m the l ‘ O reaJ
Paris house, using the same creative p l atfo r m and
pub licity signatu re ( ‘ because I am worth it’ ) . At the
same time, the l’Oreal Paris brand name beca me
larger, more visible, and more prominent for such
sub-brands as Elseve, on the packaging and in -store
merchandizing. Finally, the denom in ative logic was
applied to brand extension categories that were not
yet sufficiently attri buted to the b rand (due to its
historic associ ations with hair products ) . P l e nitude,
the brand then in competition with Ni vea, was
a bandoned in favour of Dermo Expertise, P u re
Zone and Solar Expertise, whose more descriptive
names immed iately suggest competence in the a rea
concerned.
By doing this, l ‘ O real Paris was also aimi ng to
develop real c ustomer l oyalty across the diffe rent
sections of the b rand and thereby make u p the time
lost to Nivea i n th is respect.
Industry discovers the importance
a/ branding
When branding policy is considered, the industrial
sector does not immediately spring to mind. Paradoxically,
since promotion in this sector is not done
through costly publicity but through catalogues, the
sales force and trade exhibitions, companies do
not hesitate to registe r trademarks. Air Liqu ide, for
example, has registered a total of 8 8 0 trademark
(effectively, brand names ) .
Part 3 Creating and Su staining Brand Equity
As well as representing a considerable cost, these
trademarks also create confusion and opacity further
down the line, at sales team and at catalogue
level. The problem is that they are specialist names
which it is hoped will be passed on by word of
mouth and recommendation: ‘I want some X.’ But
this is quite clearly impossible as there are far too
many, which is why the industrial sector is beginning
to incorporate the concept of the endorsing or
source brand, and even the mega -brand, which creates
an umbrella for a series of specialist products.
Inter n ationalizing the
architecture of the brand
Should companies globalize their branding architectures
? Should they just duplicate them when entering
new countries and continents ? It is a fact that
most branding architectures have been created
slowly, th rough time in the domestic market. They
benefited from low media costs, and a lower competition.
This is why we so often find ‘product brand’
architectures. They resulted from the acquisition
of a company by its main competitor: to avoid
losing market share, the acquirer decided to keep
the brands apart. Can the same portfolio architecture
be applied when entering Russia or the United
States ?
In Russia, as in many former communist countries,
there is a unique opportunity to rapidly take
a dominant position by investing fast and heavily
as long as We stern competitors are not there, and
media costs remain low. This is what Frito Lay
did. This means capitalizing on one brand, used as
source brand or endorsement, and rapidly pushing
new products into new segments.
In the United States, the challenge is the media
and distribution costs. The consequence is the obligation
to nest products under an umbrella brand
which remains to be created. As a result we see what
can be called a ‘vertical crunch’ of brand architectures.
There are in fact two types of ‘vertical crunch’.
The first is a bottom-up crunch, when a mere
descriptor becomes a driver (the way consumers
name what they buy). For instance in Europe, the
whole shampoo line of l’Oreal Paris is sold under
the brand Elseve: its many products have names
such as Color Vive and Energance. In the United
States, Elseve has not been launched. Instead of
three levels, there are only two levels (l’Oreal Paris
and a wide range made of names like Vita Vive,
Nutri Vi ve, Hydra Vive, Curl Vive, Color Vive and
Body Vive ).
The other is a top-down crunch, when a mere
endorsing brand becomes the driver. For instance in
Europe the fa mous biscuit speciality Pim’s is called
Pim’s by Lu. In the United States, it is Lu Pim’s.
Companies also exploit local equities to carry
international brands. For instance, all Unilever’s
global ice cream concepts (Magnum, Solero and so
on) are endorsed by a local house brand, acting as
reassurance by its long-established proximity and
familiarity in the country.
Some classic dys functions
Brand architecture, like any plan, is one thing.
Implementation is another. In practice, we find fo ur
classic branding dysfunctions.
The case of the parent brand
swal lowed up by a daughter brand
Sometimes, in fact, one of the daughter brands
can prove remarkably successful, attracting to itself
all the advertising investment. The result is that the
parent brand has been taken over by the image
created by this exclusive communication. It can no
longer play its role as parent brand and create new
daughter brands. This is the price of success: not
only does the star product hide the others, but it
drags the parent brand with it. For years the Nina
Ricci brand was associated with a single perfume,
its global success L’ air du temps. This created a
fundamental problem for licences : a luxury brand
makes its profits through these. However, Nina
Ricci no longer had its own identity, and potential
licensees did not want to be licensees of L’ air du
temps, but of the parent brand. It was necessary to
reconstitute the identity of the latter.
Vo lkswagen was swallowed up in image (and
sales ) by the Golf, a car which has known glory but
which sym bolizes the 1980s!
Com pany- prod uct disconnect ion
Essilor is the worldwide number one company in
corrective optical lenses. When a consumer goes to an
optician in the United Kingdom with a prescription,
this optician sends the prescription to Essilor UK,
which manufactures the lenses d uring the night in
its very a utomatized and modern factory in Portugal
and has them sent back by Fedex to the optician the
next day. What a gigantic service provided to the
opticians: this is a B2B winning-business model.
One exception is Varilux, the worldwide name
for Essilor’s brand of progressive multi-focal le nses .
It has been quite well advertised at the end-user
level, so that people ask for Varilux lenses. What is
changing is the distribution: h uge multiple chains of
dispensing opticians are developing, such as Grand
Optical and Afflelou . Their innovation is to be ab le
to produce directly in the store a large n umber of
lens prescriptions, in o ne hour only. As a result
Essilor is threatened. As a company it is not known
by the end users. It is only known and respected by
opticians: but some of them are grouping together
and starting to limit Essilor’s role to the difficult
prescriptions that cannot immediately be made in
the shop.
In the B2B sector Sage is a n illustration of this
problem. It is a giant i n terms of market sector
( number three in the world in management software
) and a dwarf i n terms of image, whereas
everyone recognizes SAP, Microsoft, Oracle and
Cegid. It is true that the company has a decentralized
structure: communications are paid for by
market, therefore by the products sold in each.
This has two consequences: tomorrow’s promising
products are not communicated enough, and the
communication places emphasis on the products,
and not enough on the Sage brand. This may place
a brake on organic growth. The Sage brand is well
known to accountants ( wh o buy its best-selling
accounts software ) but not people from other
corporate functions, where tomorrow’s growth segments
are located.
B a l k a n i z at i o n o f t h e b ra n d
If segmented, differentiated brands are created
u nder its aegis, the parent brand is impoverished
and becomes simply an endorsing brand. Diluted,
it no longer imposes a framework, an individual
vision, its identity or its values. It is a known name,
with a story, but one that is now overtaken by the
stories written in the media by its a utonomous
daughter brands.
For example, the segmentation of Dim products
with daughter brands ended at one point by tu rning
Chapter 1 3 Brand Architecture
them in to sta r . Dim became a name on the packaging
of tights and stocking minor in com pari on
to that of the da ughter brands (Macadam, Dim’up,
Diam’s and so on ). Moreover, the coh rence of J
great brand was nowhere to be found . H o ver
it is the parent brand, Dim, \ hose job it i to
survive. In order to do so, it m u t remain intrin ically
attractive, a source of desire. It doe 0 , admitted
ly, through its daughter brands, who en u re
its relevance today in growing market segments.
Neverth eless, the daughter brands must be dissolved
when th ey lose their releva nce, and new ones m u t
be created. It is therefore necessary to en ure the
pre-eminence of the parent brand. To do this, it i
necessary to :
• redefine the identity of the parent brand;
• redefine a true sou rce brand strategy, ensuring
the pre-eminence of the parent brand ;
• align the da ughter brands within the
framework defined by the parent brand .
The parent brand, after all, is the surro un di ng
framework. It is worth looking at th is process in
detai l, since it should be im plemented reg u l arly in
order to correct the effect of centrifugal forces.
What name for new
products?
A company grows through its new products :
they make it possible to gain a differen tial in
products and services over the competiti on. They
also make it possible to focus advertising on
news that will interest the m arket. Finally, they
provide the sprin gboard for a revitalization o f
strategic image features of the brand. For every
launch of a particular innovati on, the same q u estion
arises from the parents of the project: what
shall we call it ?
The question of naming new products is im portant:
it is not at all a euphonic problem (d oes the
name sound nice ? ) , but a fundamental one. In reali ty,
the first questi on should be: do we need to call it
anything ?
Why, in fact, did 3M give the name ‘Post-It’ to
something it could have ca lled ‘remova ble Scotch
notes ‘ ? Scotch is 3M’s well-known brand and the
name indicates ‘adhesive products ‘ . Isn’t Post-It an
Part 3 Creating and Sustaining Brand Equity
innovative variant of Scotch tape ? Now a brand –
in this case, Scotch – is only s upported when it is
nourished through innovation. Let us take another,
B2B, example: an innovation by Lafarge. It is a
revolutionary, ultra-fast, fine cement that makes it
possible to o btain an extremely smooth surface.
Should a new name be found for it, with the
potential for turning it into a Lafarge product or
range brand later, or should it simply be called
‘the new Lafarge ultra-smooth cement’, opting for a
descriptive name, as it would be i n a master-brand
or umbrella strategy? The name therefore poses
the underlying question of the brand strategy (the
number of levels and the l inks between them,
between the corporate and the products ) .
When should you create
a sub-brand?
When a new product arrives, there is too great a
tendency to opt for the creation of a specific brand.
This is understandable; the inventor reacts like any
parents who, proud of their child, seek to give it
a first name. However, a first name is a n identity,
and a lasting commitment of a marketing budget i n
order to forge this i dentity and achieve recogn ition
for the daughter brand. Moreover, i n practice, by
focusing on the so-called daughter brand, there is
a tendency to let the parent brand take a step back,
into the background, something that is q u ickly
translated into the periodic monitoring studies of
brand equity. The parent brand declines i n spontaneous
recognition and in image.
The reaction then is to change the status of the
daughter brand, to turn it into a simple product. For
example, the prepaid card from Bouygues Telecom
was initially treated as a relatively a utonomous
daughter brand: Nomad! It later became the
Bouygues Telecom Nomad card.
When, then, should one create a sub-brand ?
• Chapter l i on brand coherence presented
the four figures of the relationship between
product and brand: variant, similarity,
transformation and contradiction. The closer
one is to the variant, the more natural it
becomes to give the product a purely
descriptive name, or even to invent the
descriptive name i n question. Was a
walkman a brand, or did it quickly become
the generic word to describe this new piece
of equipment created by Sony ? People talk
of the ‘new Philips television’. Conversely,
the further we move from the strict
reproduction of the central values of the
brand through the new product, the more
a daughter brand is j ustified.
• A first name is necessary i n order to create
a category: iPhone ! It could have been called
the Apple smartphone. B ut there was a need
i n the mass communication to strongly signal
the technological, sociological and cultural
breakaway. Therefore, capitalizing on the
pioneer’s advantage, the category is
structured around the pioneer, here iPhone.
The new entrants position themselves i n
relation to the iPhone.
F I G U R E 13.11 W h ich brand arch itectu re is s u itable for brand innovat i on?
Focus o n
t h e bra n d
…
O n e b r a n d
Quick
cement
M a sterbra n d
u m b re l l a
Agilia
Quick Quick
cement cement
Lafarge
‘.. ,
S o u rce E nd o rs i ng
b ra n d b ra n d
lafarge
Agilia
Quick
cement
,
“.
M a ke r ‘s
m a rk
Focus o n
i n n ovati o n
)0
Quick
cement
H o u s e
of b ra n ds
• A first name is necessa ry, albeit supported by
a long-term investment in comm unication,
when the protection of the innovation must
be improved. When Candia, the milk brand,
i nvented milk with a guaranteed vitamin
content, it could have been called ‘milk with
guaranteed vitamin content’ or ‘vitam i n
milk’. After all, people say semi-skimmed
milk or flavoured milk. However, it is
necessary to account for the competitors’
reaction . Carrefour, noting the success of
the major brand’s innovation, would not
be slow in launching its copy under its own
d istributor’s brand: Carrefour milk with
guaranteed vitamin content. By launching
its milk with guaranteed vitamin content
u nder the name Viva, underpinned by
long-term advertising campaigns, the
Candia brand was able to create a halo
of exclusivity, of differentiation. Viva not
only created the segment: it is its referent.
The consumers buy Viva with all its
evocations of active good health. It is
more than a product; it is a true
( da ughter) brand.
• A first name is necessary i n order to correct
the negative induced effects of an innovation.
The sausage company Aoste ( now acquired
by Sara Lee) i nnovated by inventing the first
industrial sausage: e ach of them had exactly
the same weight and the same length. This
was a complete break from the age-old
practice of sa usage-making, all slightly
d ifferent i n appearance, weight and length,
but one that responded to the major
expectation of large-scale distribution:
economy of cost. In fact, there was no longer
a need to weigh each product, hence there
were savings i n time, personnel and money.
However, it was necessary to give it a name
that would correct, even remove, the
immediate evocations o n seeing the product
( it’s an industrialized product, standardized
to the maximum ) . It was launched under
the name ‘ Shepherd’s Stick’ by Justin Bridou,
i n order to create a rural, rustic imaginary
background for this industrial product.
The ‘Shepherd’s Stick’ became the leader
of the segment i t had created.
• With services, a first name is often necessary
i n order to give flesh to an innovation. In
Chapter 1 3 Brand Architecture
2004, Gaz de F rance, a di tri bution
co mpa ny, wanted to provide a mod u l a r
gl obal offer to it 1 0 m i llion su bscri ber .
It was a persona lized diagno i , a proposal
according to the desi red comfo rt level. To ld
in these terms, reader m ight a k them elve
how th is proposal was in any way
revolutiona ry. A fter all, i n’t all that p a rt o f
the minimum cl ient foc us ? The fact is that
ordinary words make inn ovat ive propo als
sound banal. This is why Ga z de Fran ce
named the i r proposal ‘ D olce Vita’ and based
all its advertising com mu ni cation on t h i s
name, which became a da ughter brand, with
an emotional dimension. I n Great B rita in,
British Gas created a daughter b rand in
services : Goldfish .
• When the parent brand does not (yet) h a ve
the image suita ble for the targeted m a rk et,
a relay or an intermed iary is req u i red. Th i s
is the goal of the fi rst-name brand. Venus by
Gil lette made it possi ble for this very macho
brand to target women. Peugeot motorcycles
and scooters have used many first names:
young people seeking emanci pation need a
badge. Buying ‘ a Peugeot’ 1 5 years ago did
not fulfil this function sufficie ntly, even if
the product itself was remarkable; hence
first names such as Booster.
The maternal identity of Nestle did not
legitimate its presence in coffees . Nestle is
historical ly, and fi rst of all in everyone’s
lives, baby milk. It was not possible to
launch a ‘ Nestle coffee’. Nescafe made it
possible to say both ‘instant, powdered’,
giving reassurance through the confidence
l inked with the name, wh i le d istancing the
maternal i mage, and to say ‘ coffee’. The
word cafe brought Nestle an element that
it had previously lacked . Conversely, the
identity of Phili ps was already technologi ca I :
it was enough to endorse the razor.
Choosing to call the razors ‘Philishave’
rather than Philips razors brought nothing
new: the activity descriptor ‘s ha ve’ d i d not
bring any added value and contri buted to
d istancing the salience of Phili ps. In fact,
Braun simply calls its razors – Braun
razors.
Taking into account the tendency to think up a
first name too quick ly, several warnings should
Part 3 Creating and Sustaining Brand Equity
be heeded before launching into the choice of a
daughter brand:
• No first names without a maj or, long-term
advertising investment. Otherwise, the
product will appear on shelves or in
catalogues, with a mysterious name, and
the customer will be unable to grasp what
the new product has to offer. All too often
there is a time lag between the decisions on
the name, taken very early, and the fixing
of the b udget, which may change at the
last moment.
• The second question concerns the future:
will this daughter brand be able to provide
an umbrella for other products ? Will it be
possible to put other future products under
Agilia by Lafarge, for example, that will be
coherent with this name ? This criterion is
essential and too rarely used: if it is not
respected, the company plunges ahead into
an economic impasse . In fact, it is difficult
to support a single product in advertising
and communication. Only the arrival of
a genuine range, and other new products,
will make it possible to acquire the critical
mass that generates a sufficient size of
marketing communications b udget.
• Is the parent brand sufficiently well known
to move on to the stage of having daughter
brands ? It is the parent brand that gives
meaning to the daughter brand. How were
the first Apple products known, for over 1 0
years ? Apple 1 , 2 and 3 . Only later, in the
place of the Apple 4, to clearly show the
discontinuity, was the name Macintosh used .
What did the low-cost telephone operator
Free call its convergence offer ? Free Box !
Orange called its unique landline/mobile
offer Orange Unix ! The first D anone
products were all called D anone or a variant
thereof ( Danette, D anessa, D anino, Dan’up
and so o n ) .
In the industria l domain, Veolia
Environment removed all its daughter
brands, since the problem for Veolia is that
it is an unknown group: it therefore has
an urgent need to make itself known
worldwide. Therefore, its global daughter
branch brands, Connex, D alkia and Onyx,
were de-christened and renamed Veolia
Transport, Veolia Energy and Veolia
Waste.
• Before creating a daughter brand, would it
not be better to launch the innovation under
an existing daughter brand ? For every
daughter brand has to ward off its own
o bsolescence through innovation.
Systematically placing innovations under
new first-name brands handicaps the older
ones. We will see below how 3 M created a
m ulti-criteria grid to manage this real risk.
A case in point: naming in the
automobile industry
The car fascinates us. Innumerable reviews and
magazines are dedicated to it. This sector only lives
through innovation, giving us the desire to change
cars. Different constructors have different policies
regarding their new models. Renault gives them all
proper names ( Latitude, Laguna, Twingo, Clio and
so on) . Peugeot follows its three-digit logic with a
zero in the middle (which forced the first Porsche
known as 9 0 1 to become the 9 1 1 in order to avoid
legal proceedings ) . Citroen opted at one point for
proper brands ( Citroen Xsara, Saxo, Xantia ) before
returning to the initials C l , C2, C 3 , C4 and so on.
With BMW you buy a series number: series 1 , 3 , 5
or the top-of-the-range 7. What is the logic to these
choices ?
The first structuring factor of the decision concerns
the maker’s strategy: a generalist or a specialist?
Generalists target all segments o f the market, all
consumers. Since they promote the car for everyone,
their image is consequently not as strong as the
specialists. As a result, their image is less in a position
to dynamize new models, to bring them a strong
emotional a dded value. These are reassuring brands,
brands with guarantee and proximity through their
network, not desire. The reverse is true for the
specialists, who have segmented their market to a
high degree and made their choice. The name alone
of the specialist is the stuff of dreams: BMW, Saab,
Volvo, Morgan, Mini and so on. According to their
means, buyers take away a little or a lot of the
dream: the 1 or 3 series, or later on the 5 or 7 series.
As with Mercedes, one always buys ‘class’, A, B, C,
M, E, S and so on.
There is no dreaming with generalists: it is
therefore necessary to boost the model itself with
imaginary added value, with emotion. Hence the
need for a highly evocative individual name. Remember
the Golf Gti ! From whom ? Volkswagen.
In order to compete with Mercedes, Volkswagen
concentrates on the Phaeton, since Volkswagen
, I ‘ , means peop e s car .
Other parameters, however, come into play. Why,
in fact, does Peugeot opt for num bers rather than
model names, when it is a genera list ? Before we
answer this, let us recall that a n umber can play the
part of a brand, like Chanel No 5 , or 007, or number
2 3 , the number of the football star D avid Beckham
at Manchester United . Each of these numbers has
an emotional potential . Likewise 205 or 9 1 1 in cars,
through their association with a c ult model, the
first of which marked an era, the second of which
marked severa l generations of men.
Peugeot’s approach is explained by the specific
positioning of the brand: it wants to be ‘the most
specialist of the generalists ‘ . This is why the brand,
although generalist, accentuates its differentiating
traits and the radical design that makes it palpable.
As for Citroen’s policy shift, it can be explained
as a result of the costs incurred by a daughter brand
Chapter 13 Brand Architecture
pol icy. If a model la ts six year , it i the refo r
necessary to invest over thi time period to gi v e it
recognition and an image before turni ng the e i nt o
profits and losses . Moreover, itroen’ objective i
to strengthen its im age. The empha is placed on
first-name brands, in addition to being slow and
costly, does not re bound strongly onto the pare n t
brand . Hence the decis ion to group the portfo l i o o f
models around Citroen, a s i ngle brand. We then buy
a variation on the theme according to segment: 1 ,
C2, C3 and so on.
• • •
B 2 B mixes organ i zation ,
subsid iary and brand
B2B creates specific problems for brand arc h i tecture
decisions. B2B is about compan ies. Brand arc h i tecture
models are easy to figure out and to im plement
when they concern obj ects or services (sh am poos,
yogh urts , computers, cars or hotels ) . Comp l e xity
and even confusion arise in B2B because three
issues are interacting and mixed together:
F I G U R E 13.1 2 How adding a des i gnator to a name affects perceived value
(psycho l og i cal price) of a prest i ge or non- prestige brand
D o l l a rs
C a n a d i a n
SOURC E Myung Su Jo, 2007
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HYU N DAI
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HYU N DAI X L500
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Part 3 Creating and Sustaining Brand Equity
• the legal structure of the group;
• the organizational structure of the group;
• the brand architecture.
Decisions a bout the legal structure follow one’s
specific goals: tax optimization, preservation of
ownership rights, power balance between shareholders,
reduction of trade union power, control
of social unrest risks, a bility to have m ultiple
compensation systems, motivation of staff at the
decentralized level, and so on.
Decisions about the organization ( whether to
create a group or j ust a holding company, the number
of divisions, branches and b usiness units, the reporting
structure, etc ) aim to make the company as
efficient as possible for the sake of the client.
The problem is that, within companies, most
managers, even at the top, do not see how brand
decisions are different. The legal and organizational
perspectives tend to divide the whole into entities
within a network of power and responsibility relationships,
or ownership relationships . The brand
perspective aims at influencing the markets by
capitalizing on as few symbols of q uality and fame
as possible. The brand is by definition a symbol; it
stands for something, for both inside and outside
a udiences.
An organizational perspective, for instance,
would ask abo ut the creation of a group, especially
in companies that have grown by mergers and
acquisitions. The relationship between people at
group level and those within subsidiaries will have
to be made clear. The brand perspective would ask
if this group aims at becoming the primary purchase
criterion of the market. If the answer is no, it can
remain discreet and be called Group X or Y. If the
answer is yes, one should a bandon the word ‘group ‘ .
Group is a n organizational concept: this needs not
concern the market. The market trusts L’Oreal, not
Group L’Oreal.
The same holds true for divisions or branches.
Samsung Electronics is not a brand. The brand is
Samsung. Samsung Electronics is j ust the name of
the organization in c harge of developing the b usiness
of Samsung worldwide profitably, and driving
the Samsung global brand equity up. A visit to
the GE website is quite enlightening. GE is a conglomerate:
it acts in a number of sectors ( eg finance,
energy and electronics ) . However, there is only one
brand, GE, and one symbol. GE Capital is the name
of a branch. It may itself have a legal name referring
to the company enacting part of this activity in a
given country. Sometimes branches may be brands.
For instance, for many years S uez Group, a public
utility group, did not want to act visibly and
become both a corporate brand and a commercial
brand. S uez Group acts through master brands
worldwide, such as Sita for its waste management
activity. This brand and logo are visible on the
lorries picking up rubbish every day in major cities
of the world . Sita entered Germany through an
acquisition: Eric Bohm. On the letterhead one finds
the logo and symbol for Sita, and far below, in very
different type and quite separately, so that no confusion
is possible, the legal name of the operating
company: Eric Bohm GmbH.
People like to have their own brand, which is
quite natural . When a new activity is created, with a
manager at the top, the question of the brand soon
arises because of the urgent need to make business
cards. For instance, Veolia Transport decided to
create a new cargo activity in Europe. The people
involved would often think that the brand was
Veolia Transport Cargo or, worse, Veolia Cargo.
One should not confuse organizational identity and
the brand. An activity is j ust one of the many arms
of a single b ody whose flag is the brand. There can
be only one flag.
Only when a company decides that a division
should go p ublic (trade on the stock exchange) can
there b e an exception. For instance, EDF is the
number one electricity group in Europe and the
world leader in nuclear energy. It sells civil nuclear
plants and electrical diffusion networks to many
countries in the world. EDF is a p u blic company. It
decided to create a subsidiary called EDF Energies
Nouvelles, explicitly designed to develop this knowhow
and sell services linked to wind and solar
energy to other countries. To separate both activities
and allow a clear recognition on the stock exchange,
the logo of EDF Energies Nouvelles is within a green
capsule, unlike the logo of EDF itself.
As a rule it is useful to think of B2B brands as
a flag. A single country cannot h ave two flags.
Federal countries, however, have states, eg Germany
has Uinder. If they have their own flag, there is a
clear s ubsidiarity. The two cannot be at the same
level.
A final difficulty comes from the fact that, in
mergers and acquisitions, groups buy personal companies
whose name is that of a person, the creator
of the comp any, still managing it some decades l ater.
Changing the name o f that company is a sensitive
issue: it is not j ust any name!
Our advice is simple: the merger and acq uisition
period is the best time to negotiate a change o f name
and to enact it fast. If that i s not poss i ble, one should
at least impose the adoption o f the group sym bol.
When the creator resigns or retires, then move to
the group name immediately.
Corporate branding
Since 1 9 90, there has been a basic tendency for
corporate brands to be as visible as possible on the
products themselves. For example, Pharmaceutical
Laboratories now regard themselves as a brand
in their own right and take much greater care to
ensure that their brand name is clearly visible on
the packaging of brands of medication. The back
o f all Nestle products bears the Nestle corporate
brand name and the customer service phone num ber.
It is the same for D anone, which has taken great
care to create a logo for its D anone corporate brand,
as distinct from the Danone commercial brand
used for chilled products, and water and biscuits in
Asia.
This tendency is part o f a basic trend – the
demand for responsibility and transparency. The
company presents itself as the ultimate endorsement
and no longer hides behind its brands. This also has
the e ffect o f increasing its visibility, and therefore
its attractiveness to students, executives and the
employment market in general . In Asi a , television
ads for Procter & Gamble and Unilever brands bear
in the last seconds the signature o f the companies
themselves. This is not the case in the United States
or in Eu rope, although – influenced by this Asian
experience – Unilever is looking for some kind of
higher pu blic visibility to boost its corporate brand
profile. In Asia, however, these two companies do
not enjoy any reputation and this m ust therefore be
established.
Finally, once a company is quoted on a stock exchange,
it must try to influence the share price s ince,
over and a bove the financial results pu blished on a
regular basis, market predictions are i nfluenced by
the company’s name and reputation. So anything that
makes people dream a little adds to its goodwill.
Companies regularly change their name and take
the name o f their flagship commercial brand. For
Chapter 1 3 Brand Architecture
example, the company fo rmerly known a B
changed its name to Danone Corp ( i t nearly beca me
Evian Corp), wh ile the Vo l k svvagen group and
l’Oreal group have both ta k e n th e i r name from the i r
flagsh ip brands. Mars, on the other hand, cha nged
i ts name and became k n own a Masterfood s, as
other co mpan ies are called Bestfood ( U nil ever) or
General Food s . So what are the reaso ns for these
two di ametrically opposed atti tud e s ?
Capitalizing on a flagsh i p brand by app ly i n g
its n ame to the group makes it poss i b l e ro ta ke
advantage of the halo effect, even i f th is involve
two clearly distinct so urces, s i nce the i m age of the
one influences the perception of the other. For
example, the press regu larly refers ro Vo lk swagen
as Europe’s number one brand when it was not
the brand but the m u lt i – brand group that earned
the title thro ugh the c u m u l ative sales of each of
its brands.
The [
,
Oreal group does not advertise a great dea l .
However, its brands use heavy advertising, along
with research and development, as one of the i r m a i n
weapons. By shari n g the name o f its g l a m o ur
( ‘ I ‘ O real Paris ‘ ) brand, the l ‘ O real group benefit
from the impact o f an international i m age that
i n spires confidence in shareholders and defi nes
what they do.
It was for entirely opposite reasons that Mars
took the less transparent name of Masterfoods.
Apparently, it was difficult ro sell brands of pet food
such as Pedigree and Wh i skas under the Mars
corporate or group name, parti cularly s i nce Ma rs
conj ures up the i mage o f a single product, a legen dary
chocolate bar, which has g rowth lim its i n an
extremely segmented ma rket. There was also a risk
o f a negative halo e ffect on financial prediction .
LVMH, the initials o f Louis Vuitton Moet H ennessy,
uses both strategies. On the one hand, the expe rts
are fam iliar w ith the significance o f the acronym ,
which refers to internati onally renowned luxury
brands. On the other, by retaining the acronym, the
group demonstrates its intention to remain disc reet
by placing the emphasis at brand level rather than
corporate level, and leaving the brands to develop
through the ir own creativi ty, pub lic ity and the
qua lity o f their distri buti on. From th is, it can be
seen th at the position o f the corporate brand i n
relation to its subsidia ries is in fact a reflection o f
the group’s internal organizati on.
This essential part of group strategy is developed
below.
Part 3 Creating and Sustaining Brand Equity
Group and subsidiary relationships
In the industrial sector where external growth is the
norm, the question of the status of corporate brands
that have been acquired crops up again. Should they
be left independent? Should they disappear ? Should
they be endorsed with a simple visual symbol of
the parent company ? Or j oined to the name of the
parent company? If they behave as mere holding
companies such firms should not be surprised by
their low public recognition. For instance, although
it was founded in 1 9 69 and was one of the largest
chemical companies in the world, Akzo remained
largely unknown. No wonder: all the companies
acquired had kept their own company names and
brand names (Warner Lambert, Stauffer, Montedison,
Diamond S alt, etc ) . Akzo thus acquired a
poor image in terms of technology because of its
lack of visibility. It had become the biggest unknown
company in the world.
General Electric has defined four brand policies
and specifies the conditions for their application.
These policies range from:
• The so-called monolithic approach where GE
behaves like an umbrella brand and replaces
the corporate brand which has been bought
( either immediately or after a transitional
period of double branding) . The brands GE
Silicons, GE Motors and GE Aircraft Engines
have all emerged from this process.
• The endorsement approach where GE signs
its name beside the name of the product or
the company that has been acquired.
• The financial approach where GE behaves
like a holding company and is only discreetly
mentioned (X, member of the GE group ) .
• The autonomous approach where the
acquired company or product makes no
reference to GE.
To decide upon a policy, GE uses six selection
. . cntena :
1 D oes GE control the company?
2 Does GE have long-term commitments in
this company ?
3 Does the product category have an image
value ? D ynamic or not ?
4 Is there a strong demand for GE quality in
this industry ?
5 Is the corporate brand which has been
bought strong ?
6 What could be the resultant impact on GE?
Group governance and branding
strategy
At regular intervals, the major industrial groups
ask themselves whether their branding strategy is
as effective as it could be. There are three formal
types of strategy that can be implemented within
industrial groups. Although the terms ‘subsidiaries’ ,
‘holding companies’ and ‘ companies’ tend to be
used in this context, structurally speaking they represent
the typical figures of branding strategy – source
brand ( A ) , endorsing brand ( B ) and umbrella brand
( C ) . But beyond these terms, the impact on level-one
subsidiaries ( sub-brands ) is self-evidently not the
same. A bove all, each branding architecture has
organizational repercussions, with each playing a
different role for the group in relation to its subsidiaries
and subsubsidiaries:
• The strategy in which the group is a source
brand can be likened to the role of an
orchestra conductor or band leader.
• The strategy in which the group is an
umbrella brand makes it a unifier.
• The strategy in which the group is an
endorsing brand makes it a coordinator.
It is o bviously not up to the branding decisions
to determine the management style of a p articular
group – that would be a reversal of roles – but it
should explain management choices and the criteria
on which these choices are based.
Corporate brands and
product brands
For years, companies have hidden behind their
brands. Through prudence and fear of being affected
in case of brand failure, company names have been
separate from those of the brands . Thus Procter &
Gamble remain unknown to the p ublic while their
brands are the stars ( Ariel, Pampers ) . In fact, it is
this that allowed the company to keep its turnover
stable when the rumour of it being linked to a sect
raged through the United States. The brands,
autonomous from the company itse lf, suffered no
setback. Neverthe l ess, such instances are rare and
the tendency i s more towards transparency due to
communication o bligations. Also, the public wants
to know, in l a rger numbers than before, who are the
actors behind the brands. ] ournalists want to disclose
who i s the ‘ brand behind the brand ‘ . Th is also
expla ins why so many companies have taken on the
names of their most famous brands (eg Alcate l Alsthom,
Danone ) . They get more visi b ility and
acknowledgement. This helps the stock exchange
i nvestor a lso, i n cases where he i s not an expert or
very well-informed, to understand better what he is
buying. It may a lso create a benefici a l confusion for
the brand itself. After i t bought Audi, Seat and
Skoda, Volkswagen Group is now co-leader i n Europe
on a cumulative basis. However, many people m istakenly
speak of Volkswagen as a brand be ing the
number one i n Europe.
The trend towards greater visi b i l i ty of corporate
names also has other causes. D istri bution i s
one of them. D istributors, multiple retai lers and
hypermarket chains are not very i nterested i n
brands. Thei r fundamental relationship i s with
corporations, not with brands. It i s a business to
business relationship. The name of the powerful
corporation i s therefore a potent reminder of that
relationship.
Only corporate names can endow brands with
stature, an extra d imension c a lling for respect. Would
Audi have succeeded i n its remarka b l e recovery
had i t not been known that Audi belonged to the
Volkswagen Group? The same holds true for Seat
and Skoda. Nissan’s status will change because i t is
now part of the Renault group. As long as car makes
are only brands and not part of a larger and more
dynamic corporation, they arouse perceived r isk
among consumers and do not guarantee a l ong-term
presence.
Many companies sell i n i ndustrial and commerc
i a l markets at the same time. Here, there is
the problem of having to choose between the use
of product brands or the use of the corporate
reputation to support the products. This depends
on the quality of the company’s endorsement and
the degree of visibility that i t wants to acquire .
In practice, the respective weight to be attri b uted
to the product brand and the corporate brand
depends on a case-by-case analysis of the returns
brought by each of them on the many targets
Chapter 1 3 Brand Architecture
concerned. Ta ble 1 3 . 2 pre ents the outli ne o f uch
an analysis.
At leI three kind o f b rand pol icy >,; e re u sed het:
Fi gure 1 3 . 13 } :
• The first po l icy is the cla sic u m b re l l a brand
wh ere the produ cts keep their ge neric names
and are signed w i th the corporate namc.
Most often this concern ra w material
and undi ffe rentiated p rod u cts w h e re the
co mpany guarantees a certain q u a l i ty a n d
the differentiation i s essenti a l l y commerc i a l
( ie speci a l conditio ns offered to the c l icnt on
a case-by-case bas i s ) . An example w o u l d be
leI pol yurethanes.
• The second policy is tha t of the endorsi ng
brand. The company puts its name beside
the product brand and this confe rs a status
of high technol ogy and re l i a b i lity to the
product. Thus, Dulux pain ts are
accom panied by the IeI logo.
• The th ird pol icy makes exc lu sive use of
the product brand . Tactel is one of the
most widely sold fibres but it never
mentioned leI. The product was sold to
the textil e industry and to the fa s h ion world,
and i t was feared that the me ntion of the
lel name m ight alter the positive i mages
linked to Tacte l . S i m i l a rly the insecticide,
Karate, which is sold throughout the world,
a lso did not make any menti on of l eI .
Does th i s have anything to d o with not
wanting to step on ecological toes and
avo i d the poss i b i li ty of blame rega rding
the harmful effects of pesticides on ground
water? Thi s s ituation is not only changing
through time, but it a l so c hanges according
to the company. Decis, the world leader
in pesticides, made a reference to its
corporation, Roussel Uclaf (Agrevo
division), on its packaging. Simi larly, to
benefit from its innovations, Du Pont de
Nemours, former owner of the brand, used
to mention clea rly ‘ Lycra by D u Pont’ on
a l l its communicati ons for Lycra, the
fa bric that has revol utionized women’s
linger i e .
Product i nnovations generally provide an ideal
occasion to ask fundamenta l questions a bout the
branding policy.
Part 3 Creating and Sustaining Brand Equity
TA B L E 13.2 S hared roles of the corporate and product brand
C ustomers
Trade associations
Employees “.
S u ppli ers
Press
I ss ues groups
\’>. ‘,,’ . 􀀚􀀛.</;1.:· i;:􀀜” “,􀀝,
Academia
Government com mission
Stockholders
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+ + +
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F I G U R E 13.13 Corporate and product branding at I C I
‘ I C I F i b res’ bra n d
Textu rize r Weaver a nd
fa b r i c m a ke r
G a rm e nt
m a ke r
R eta i l
+
+ + +
+ + + +
+ + + +
+ + + +
+ + + + +
‘Tactel ‘ b ra n d
C o n s u m e r