Brand management: individual branding

Individual branding is a strategy that allows a organisation to give each product they offer its own brand with no clear link to the other brands within the company.

This style of branding aligns very closely to the ‘multi branded structure’ that I talked about in my ‘Brand management: let’s look at brand structuring‘ article.

The key element of this strategy is that through name and brand differentiation, the overarching company is able to target different market segments and demographics by separating out their product or service portfolio to suit as many different audiences as possible.

Where does it work?

This strategy can have two great applications in my opinion. Firstly when a large company owns lots of different products that are completely unique and different from each other. This means that an umbrella brand wouldn’t offer any value and might actually confuse the audience. You tend to see this approach with FMCG (fast-moving consumer goods) or pharmaceutical businesses such as Procter & Gamble, Unilever or GSK.

Alternatively, when a large company offers services that vary in price and target different market segments. This model is very effective for a hotel or entertainments business. A great example for this are Bourne Leisure or Hilton Worldwide which both have numerous unique brands under it’s ownership that suit different markets at varying price points.

For Hilton Worldwide, although some of the brands carry the Hilton name with the ‘By Hilton’ tagline, all of them have their own brand and style.

Another interesting use of this branding model is the Las Vegas Strip. It is not very well known that 19 of the 29 strip casinos are owned by just two companies. MGM Resorts & Caesar’s Entertainment. In 2015, MGM Resorts had control over 36,000 of the 73,000 rooms on the Las Vegas Strip. However due to their uniqueness, you’d think you were staying in completely different properties.

If you stayed in the Excalibur with it’s castle theming, you’d never know that the same company owned the high-end non-themed Aria resort. This branding model has ensured that whatever your budget, MGM or Caesars have been able to secure your holiday spend.

Is it a winning strategy?

This method of brand management is obviously incredibly expensive as it becomes quite challenging to achieve any corporate economies of scale with marketing, advertising and sales promotion. There is also a risk that if you have multiple brands in the same marketplace, you can actually cannibalise on your own market share and split your own customer.

This is obviously bad for business but it can also cause instability and unrest within the company especially if products or services are owned by different teams. This methodology can work if there is a corporate plan especially if a new product starts to take market share from an existing product. However, if there is no plan, the internal disagreements and unrest may cause damage in terms of sales and growth to both brands.

However, the reduced corporate level brand impact allows the products to be positioned in the marketplace differently and allow one company to access different consumers. As the brands will be targeted at different audience segments, the unique brands allows for flexibility in terms of market strategy meaning that the effectiveness should be higher in terms of the tactics used in market.

Finally, as the brands are not visibly interlinked, one business can offer a mixture of lower-quality and higher-quality products or services without the risk of damaging each other. This is very common in the hotel market as discussed earlier on. This lack of visible brand link is also valuable in the likely event that a product that goes to market fails. If they were under the same umbrella brand, this failure may affect the rest of the range, whereas individual branding protects the wider portfolio.

On the whole, if you are going for different markets and you have a wide variety of products or services then this methodology can be a great fit. However, you should be aware that this strategy is going to be expensive to maintain and you may come across internal competition. This is especially important to note if your divisions are competing when two products or services have a crossover in consumers.

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If you have any comments or areas that you think I have missed, please do let me know.

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