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A new brand is not always the answer

Recently I have worked with quite a few clients who, quite frankly, had created too many brands. It may be odd for a brand strategist to be saying this, but you need to think twice before creating a new brand.

Why do I say this? Well, there are many benefits of having one brand...

Current consumer trends data is showing us that consumers are looking for simplicity as an antidote to the proliferation of information and resultant complexity in making a choice. In fact, if you can help simplify their lives and the choices they have to make, recent Siegel & Gale research shows that many consumers claim that they are willing to pay a premium1 for this benefit.

So, if there is one brand that they trust (a very important prerequisite in the post-financial crisis world), that they have already engaged with on a more emotional level, that can credibly offer them some new products or services that fulfil their needs, then that would be simply super.

Credibility to offer different products and services is dependent on the brand's reputation. Take for example the Virgin brand that has managed to stretch itself into so many diverse categories. It can do this because its reputation is about being innovative and taking on and challenging large, lazy competitors thereby giving the consumer more of what they want, generally for less. This promise from the brand is very relevant to consumers considering cell phone contracts, banking, insurance and airlines. And a good local example is Woolworths whose reputation is built on quality and value which they can leverage into new categories provided they still deliver quality and value... coffee bars, credit cards, and insurance.

So from a consumer's point of view, the brand that they know gives them a clear signal as to what they can expect from the new product or service. This means they have to spend less time trying to figure out what a new brand is about, what it stands for, whether they can trust it. Much simpler.

For a brand owner who is, without doubt in the current climate, under pressure to manage costs and optimise their current assets, it is generally far cheaper to leverage a current brand with a strong reputation, than it is to create and build a new brand. Great brands take years to build and require constant resource. They need a consistent presence. They need to consistently interact and participate with their consumers and keep in touch with their needs to ensure they are keeping relevant and fresh.  They need to be responsible and create shared value. Great brands don't just happen. All this requires investment and why invest in more brands than you need to?

If your brand is trusted, has a strong connection with your customers, differentiated from its competitors and has a reputation that will allow it to play and win in a category, use it. The more you use (appropriately and consistently), the greater the synergistic effect and the "big brand feel".

But when then should you develop a new brand?

If you are looking to move into a new market where your existing brand reputation is not relevant or differentiated, and it would not be appropriate to build these credentials in your current brand, then a new brand may be required. For example, if a brand like KFC decided to leverage its skills in fast-food retailing and sell cupcakes-to-go, it would probably need a new brand.

Or if your brand has mass appeal and you want to launch a premium or professional offering - it may lack the quality or specialist credentials to succeed.

Or if you want to appeal to a different consumer with different needs to your current market. For example, Dove has built its reputation on championing real women. It would battle to stretch this reputation to appeal to men. This is why Unilever (the brand owner of Dove) has a brand like Axe/Lynx that has a very different proposition appealing to men to help them "get the girl".

A new brand can help you signal to your consumers that you are doing something completely different. And there are several instances where a new brand may be required. But always ask the question, "why not one brand?" and be sure your reasons warrant the investment and effort you're about to commit to and that the new brand will genuinely facilitate consumers' choice.

1 : Siegel + Gale Global Brand Simplicity Index: 2010

(as published on Marketing Web 1 March 2011)


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