Contents
- What is a nested brand?
- Examples of nested brands
- Advantages of using a nested brand
- Transition to a multi-brand architecture
What is a nested brand?
A nested brand refers to a subsidiary company that produces goods under its own name while actively utilizing elements of corporate identity and references to the parent brand in its advertising and packaging. This allows for recognition and trust from consumers who are already familiar with the parent company. Nested brands can be part of a broader brand architecture known as an umbrella brand, where subsidiary companies use the name and logo of their parent.
Examples of nested brands
A prominent example of a nested brand is Lever 2000, owned by Unilever. This independent trademark has its own logo, but the connection to the parent company is easily traceable in its name. Similarly, sub-brands like Sony PlayStation completely borrow the name and style of the main brand, creating a name that consists of two words—the name of the parent brand and a unique sub-brand name.
A nested brand is generally more distanced from the parent company. The parent's name is not prominently featured but is often indicated in small print on the packaging, used as an advertising tagline. For instance, Hasbro concluded advertisements for its subsidiary brands, such as "Transformers" and "My Little Pony," with the phrase "Of course, from Hasbro."
Advantages of using a nested brand
The format of a nested brand provides marketers with several significant advantages:
- Cost savings on promoting a new product: part of the loyal audience of the main brand may transition to the new product.
- Utilizing the reputation of the parent brand: consumers tend to trust new brands from a well-known company, such as Nestlé, due to their good reputation.
- Flexibility in managing brand architecture: if the parent brand achieves success, this association can be leveraged for the rapid growth of the new product. Conversely, if the parent company faces reputational issues, the nested brand can distance itself from it, reducing risks.
Transition to a multi-brand architecture
It is interesting to note that companies often use a nested brand as an intermediary step when restructuring their architecture from umbrella to multi-brand. For example, Danone gradually removed its logo from Danissimo yogurt packaging and discontinued the well-known slogan "Mmm, Danone" in advertisements. In this way, the subsidiary brand "flew out of the nest," allowing the company to change its strategy to adapt to new market conditions.