Branding remains a significant strategy employed by companies to position their products in the market. Each company prefers branding strategies that suits its marketing activities. There are a number of branding types though the most common are two; branded house and house of brands.
Branded house strategy entails a company having a master brand with other sub-brands that do not detach from the main brand. The product names of the sub-brands have the name of the master brand for easy recognition by the consumers (McQueen, 2015). A considerable of a company using branded house strategy is Virgin that produces health and generic related products.
Figure 1: Virgin house of brand strategy
House of brand also known as free standing brands entails a company producing a variety of products that have separate identities from that of the master brand. Each brand has its name, personality and consumers. Some of the brands have a common use which makes them compete each when positioned in one market (Melović, Ishkov & Romanovich, 2016). A notable example of house of brand is Unilever whose products range from detergents, oils to other home chemicals. The products are designed to stand independently from their main brand making the consumers fail to know the master brand.
House of brand strategy has been well utilized by Unilever to expand their market base. Firstly, the company has used this method to avoid a contagious crisis that may affect the company. When one product is declined in the market, other products are not affected, but that particular product due to its independent nature. Secondly, the strategy helps in creating new consumers for their diverse products. This ensures that consumers who would have purchased from other competing companies are attracted to the diverse products of Unilever.
However, the house of brand strategy is not effective for the company’s growth. The strategy of having each product have its identity and logo is too costly for the company and has made other dimensions of the company suffer financially .Secondly, the company has taken a lot of resources concentrating on producing diverse products of different identities and failed to promote their existing products. This has led to instability in some of its products in the market. Thirdly, there has been a poor approach in the use of the brand. The measure of consumer preference of a certain product has taken the center stage instead of the management establishing the performance of the whole company. This has created a scenario of stability in a few products but poor performance of the whole company at specific times.
Branding determines the product position in the market.Different brnding strategies are used depending on the size of maeket, company preference, availabity of funds and company goals.
Figure 2: Unilever house of brands
Branding strategy is essential in ensuring stability of a product that enhances the growth of the company. Each company has its branding strategy based on the company goals, set of consumers and the market size.
McQueen, K. (2015). Building a brand–not just a pretty logo. The Dental Assistant, 84(4), 30.
Melović, B., Ishkov, A., & Romanovich, M. (2016). Branding companies as a factor of competitiveness – relevance for the engineering management. Procedia Engineering, 165, 1563-1567. doi:10.1016/j.proeng.2016.11.894