I've been writing a lot about brand differentiation and business transformation lately, and one byproduct of either of these two is often the creation of a new idea, product line or service spinoff, or you may discover it's time for a rebrand. The process of transformation and differentiation often unearth unrealized opportunities and new audience segments to serve.

When new ideas, products or services hatch, it presents the conundrum of determining where these fit into the existing brand, if at all. Do you start from scratch or find a way to fit them under one umbrella? And how do you ensure you don't undermine the value of either when something new is introduced?

When it comes to branding, there are nearly endless approaches you can take. The key is to find an architecture that fits best for your company.

In this two-part series, I'll address several of the more common approaches and how to determine which is right for your organization. At a high level, the structures I'll address fall into one of two categories: individual or sub-brand. There are advantages and disadvantages to both, and ultimately, it will come down to your goals and your customer.

Primary brand architectures

When one or more products or services are symbiotic or fit naturally with one another, the sub-brand or brand extension will often work. Even within this structure, there are a few ways to further slice and dice:

  1. Branded house or masterbrand -- the parent brand influences the identity of the sub-brand. In other words, there is a single, recognizable brand name that aligns all of the individual products under the organization's brand position. An example is Google with Chrome, Maps, Drive, etc. Others include FedEx Virgin or Nike.
  2. Endorsed brand -- each sub-brand carries the same values, but has its own distinct brand identity. It also leverages a well-known company name, bringing with it brand awareness and an endorsing quality. An example is Marriott with its JW Marriott, Residence Inn and Ritz Carlton sub-brands.
  3. Hybrid -- this blends the individual and masterbrand. An example is Coca-Cola Company. Several years ago, the company shifted to a "one brand" strategy, unifying all sub-brands (Coke, Diet Coke, Coca-Cola Zero, etc.) under the Coca-Cola master brand. However, the company still maintains its multiple individual product brands such as Sprite, Dasani, Fanta, etc.

For companies like Coca-Cola, the hybrid brand approach worked well as they were able to better communicate the range of offerings and clarify consumer choices among the Coca-Cola family of beverages, while keeping the other products separate. While it can be a risk to bundle everything under one unified master brand, for Coca-Cola it represented an opportunity to educate consumers about the breadth of beverages offered (at the time, five out of 10 people didn't know Coca-Cola Zero was a no-calorie and sugar-free drink).

It's important to note, that in this scenario, the sub-brand shouldn't stray too far from the original vision in terms of what's being sold. This is more about "landing and expanding" within the industry you are already serving.

Leveraging the hybrid approach to tap new segments

The hybrid approach is also ideal if you need to be more targeted in regards to marketing efforts. For instance, when Uber developed Uber Freight, they consciously chose to build a brand that looked, felt and performed in a similar vein as their namesake app, but this new spinoff would serve a very niche segment --truck drivers.

They discovered through testing, however, this audience had never heard of Uber, so they didn't have the benefit of brand recognition. They had to learn the market, its pain points, how to communicate to them, and how to get them to adopt new technology.

And this is the key -- your target audience or customer will ultimately help you decide which branding approach is best for your new product or service. But it requires doing the exhaustive research first to understand the nuances of your audience.

This is where the Uber Freight excelled. They hyper-focused on the Dallas area first, hired experts in the industry who could speak the language, and implemented a direct outreach approach to gain early adopters.

In this scenario, Uber took into account the needs of this audience and tailored the "Uber experience" to them while upholding their core brand principles. Their sub-brand maintained the core offering of more efficient transportation, but built a completely different path to attracting, and resonating with, this new subset of users.

As you work towards brand differentiation or business transformation, and uncover the wants, needs and desires of your audience, as well as the market opportunity, the best brand architecture will often naturally reveal itself. You may discover, like Uber did, that you are dealing with a completely different audience segment who doesn't even know you currently exist.

In the next post, I'll discuss the individual brand approach and how to determine what's right for your organization. I'll also outline a few questions to ask to further determine the best approach.

Published on: Nov 17, 2017
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