Content
- What is an umbrella brand?
- Who needs an umbrella brand and why?
- Types of umbrella brands
- Disadvantages of umbrella brands
What is an umbrella brand?
An umbrella brand represents a marketing strategy in which a company offers a variety of categories of goods or services under a single, easily recognizable name. This helps to create a strong image and increase consumer trust. A vivid example of the use of an umbrella brand is the digital ecosystem of "Sber". This company has accumulated all its services under one brand, including the banking app "Sberbank.Online", the marketplace "SberMegaMarket", and the subscription service "SberPrime". This approach aids not only in promotion but also in creating a unified image.
Who needs an umbrella brand and why?
Umbrella brands are created by companies that have already established themselves in the market. They have a good reputation, streamlined business processes, and established logistics. This strategy is most commonly applied in the segments of cosmetics, household chemicals, clothing, and food products, as well as in financial technologies and internet companies. For example, companies like "Sber", "Tinkoff", "Yandex", and Mail.ru Group effectively utilize umbrella brands.
Tasks that an umbrella brand solves
- Quick promotion of products. Umbrella products are easier to sell, as consumers already trust the brand and are confident in the quality of its products.
- Facilitation of new launches. Products under a well-known brand require less advertising and promotional costs than creating a new brand from scratch.
- Simplification of distribution. Umbrella brand products are easier to distribute through distributors because they are associated with well-known manufacturers.
Types of umbrella brands
There are several types of umbrella brands, each with its own characteristics:
1. Monobrands
All products belong to a common system, and the name of the parent brand is clearly recognizable. For example, "Yandex" includes not only the search engine and browser but also services such as taxi and delivery.
2. Sub-brands
The company produces goods under the name of the main brand, adding an additional name, such as Sony and Sony PlayStation. Initially, sub-brands are supported by the main brand and later begin to develop their independence.
3. Supported by the main brand
Products are created under different brands, but the main brand clearly emphasizes its influence. For example, NESTOGEN is a separate brand, but the advertising highlights the connection with Nestle.
4. Line brands
Companies produce similar products for different needs. An example is the cosmetic company Nivea, which offers various product lines for men, sun protection, and skincare.
It is important to note that most companies use hybrid strategies, mixing different types of umbrella brands depending on market conditions and needs.
Disadvantages of umbrella brands
Despite several advantages, umbrella brands also have drawbacks:
- Management complexity. Clear definition of the structure and hierarchy of brands is required, which depends on many factors.
- Reputational risks. Negative perception of one new product can adversely affect the entire brand.
- Costs. Expenses for expansion and promotion can be significant.
- Brand dilution. A wide assortment can lead to confusion in the perception of the overall brand concept.
Examples of companies that were initially known only in one segment starting to produce a variety of goods can lead to consumers losing a clear understanding of their position in the market. It is essential to approach positioning and the relationship between the main brand and subsidiary brands carefully.