When a company is engaged in marketing more than one brand which belongs to the same category then this will be defined as multi-branding.
Types of Multi-Branding:
Well there different types of multi-branding and major among them include.
1. Separation based on Brand Identity: The only factor which creates a differentiation between products with the competitors is brand identity or image. FedEx is a good example of this. Different services with the same brand name are offered by FedEx.
2. Separation based on distinctive brand names: The separation, in this case, is done based on distinctive brand names. The parent firm will give support by using the parent company name. Here Vodafone can be a good example of this; Vodafone Pay, Vodafone connect, Vodafone play, etc
Advantages of Multi-Branding:
Now we know about the risks and types of multibranding. But what we need to know next is the advantages which we can get from the application of Multi-Branding Strategy.
• Allows low shelf space for the industry competitors and creates more for self
• Make effective switching of brands
• Creates a healthy competition between the managers
• With the success of the initial business, there will be scope for developing a second brand without making any huge expenses via the franchise.
• Helps in cutting costs also spreads risk.
• Helps in consolidating the functions of the back office.
• Helps in Attracting more customers.
• Helps in running big marketing campaigns.
Disadvantages of Multi-Branding:
There are certain risks and disadvantages associated with multi-branding and that is:
• Similar brands face cannibalization between each other.
• Erases the differences existing between multiple brands.
• Consumer segments may get overlapped creating confusion which may encourage brand switching out of the company umbrella.
• The company image will come out as profit oriented and not customer oriented.
The multi-brand strategy emerged out to be a great choice for those businesses where the products which are developed are quite different from each other or it targets a different set of customers. We cannot deny the fact that such kind of branding strategy turns out to be more expensive than being confusing. It is vital for you to consider the advantages and disadvantages of multiple branding carefully for deciding if it will be the right way to ensure success for your business. Research well before you implement Multi-Branding for your business.
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