Normally, a company can opt for one or more of the following strategies:

• Product branding
• Product-line branding
• Product-range branding
• Corporate branding

The characteristic of the various branding are discussed below.

Product branding:

• This type of brand give each individual product an exclusive brand name and the company name being ignored

• It allows the brand to have unique values, personality, identity and positioning.

• By doing so, it implies that every new product the company brings on to the market is a new brand and can be positioned precisely for a specific market segment

• It has the advantage of making it easier for the company to evaluate brand performance and worth and allows better resource-allocation decisions.

• The major drawbacks are product cannabilization if consumers cannot differentiate clearly among product brands and involves higher advertising and promotion budget and is totally self-supporting with little or not brand name assistance or assurance from the parent.

Product-line branding:

• Here, the products appear under the same brand name and possess the same basic identity but with slightly different competencies for example Follow Me line of hair shampoos. Here the brand line comes under the hair-care category but the different line extensions cover complementary applications of essentially the same product

• Advantages therefore are economies of scale in advertising and promotion and each new line extension strengthens the position of the brand and therefore its image. The line helps defend the category from predatory attack. Hence, individual product brands can move across to line brands as companies find ways of extending the brand to different consumer groups or segments.

Product- range branding:

• A number of products or services in a broad category are grouped together under one brand name and promoted with one basic identity.

• Compared to product-line branding, product-range branded products carry out the basically the same functions but at different performance levels like various cars in the Mercedes S, E, C and A class and Intel’s Pentium and Celeron ranges of microprocessors.

• Therefore the advantage here is that a single brand name allows some economies of scale in advertising and promotion as the products tend to carry the same overall brand values and positioning.

Corporate branding:

• Two approaches in the Corporate brand exercises

• First is to promote its name as the main brand name sometimes referred to as monolithic or umbrella branding. Here the product is not branded individually or as strongly as the corporate brand. Companies using this approach – IBM, Virgin, Sony. The basic principle is that the companies believed that the company name is the life of an enterprise.

• The second approach which is becoming popular whereby the product brand name has a high profile but is endorsed by the parent company which gives the product a stamp of quality and credibility. Here the product brand is self supporting in practically every respect but retains the assurance of the corporate brand endorsement. This type of corporate branding is also called house or endorsement branding. Nestle uses this approach to protect and guarantee the performance of their multitude products.

• The second approach is also suitable for companies engaged in service industries as their products are more intangible in nature. When consumers cannot see the products, the company name helps to give them an assurance of quality, heritage and authenticity

If you found this post useful, keep updated with future posts by subscribing to FMAccounting (for free) through RSS or email.

Related Entries

• Brand Promotion Grant – A Must For Those Who Wants To Promote Their Brand Internationally
• Branding & Expanding Overseas
• Extending Tax Incentive For Promotion Of Malaysian Brand Name To A Company Within The Same Group
• Branding-Creation and Sustaining
• Global Versus International Brand