Individual branding or family branding: Which strategy is best?

BRANDING

2 min read

Individual and family branding strategies are beneficial for organizations that want to extend their brand portfolio by launching new products on the market or adapting the old ones.

A standalone branding implies individual brand names for its products while an umbrella brand involves the organization’s products to stay under the same brand name.

An umbrella or family branding strategy offers economic advantages to those companies that have established a strong brand identity in the minds of the consumers.

1.   Why a brand needs an individual branding strategy?

There are several reasons why a brand needs a separate identity. For instance, a company would like to introduce a product that is competing in a new market segment and undoubtedly individual branding is a suitable solution for the business because it protects the main branding name against failure.

In case the product doesn’t offer profit to the company then we won’t talk about heavy financial losses as in the case of applying family branding strategy. There is a high chance that a standalone brand can become the leading brand in a market segment.

During times of crisis, a standalone brand can be a lifesaver for any organization because it doesn’t operate under the shadow of its corporate brand. Due to the individual branding strategies, the consumers won’t associate it with the corporate brand under crisis.

Furthermore, a company that approaches a standalone branding strategy can avoid the failure of the whole organization’s brand image and reputation. For example, if customers develop a negative perception towards a brand product it will only affect the individual brand and not all the organization’s products as in the case of family brands.

2. Why would a company adopt a family branding strategy?

Researchers found that negative evaluations of a brand product by its customers may lead to a decrease in sales due to the unfavorable attitudes toward all products under the same brand name (Romeo 1991; Park, McCarthy and Milberg 1992; Milberg 1992).

The umbrella brand has a strong brand value and a reputation that must be supported by its family brands. If not, the umbrella brand risks to be destroyed as well as the image of the corporate branding and this can cost the organization time and money to fix it.

It is more likely for an organization with strong brand equity to adopt the family branding strategy rather than an individual branding strategy. Using the brand family name for the new brand, can enhance awareness, perception, and loyalty among customers.

People are willing to try new products from the same brand especially when the ones that sit under the same umbrella branding built a positive impact on the audience. Creating a strong brand image and equity from the beginning makes the family branding strategy cost-effective for the organization. So, in this case, it's important to launch new products under the same brand name

The umbrella brand name may be positioned as a luxury brand for affluent consumers. Being positioned inadequately for the target market segment, the family branding strategy can damage the success of the organization. However, the family or corporate brand can be cut to pieces if the strategy is not applied correctly at the right time or the organization uses the wrong communication strategy.

To extend the brand portfolio, the organization must be aware of the market trends in order to bring continuous innovation and defend its market share.

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