Brands have always diversified with sub-brands in the pursuit to attract new customers and gain a larger market share and nowadays the focus has increased on targeting Millennials, the digital savvy and socially engaged generation.
For businesses, diversification is critical to growth and new customer acquisition, which is why major brands across the globe have been exploring opportunities by creating sub-brands dedicated to certain segments. But, to avoid fragmentation the 2 important branding aspects marketers need to consider before creating a new sub-brand are –
- Whether they want to anchor the sub-brand to the parent brands capitalizing on its reputation and value.
- Or, create a standalone identity by offering something new and different in the market.
Lately, many major brands have adopted the later by creating a standalone brand identity catering the young, the digital savvy and the socially engaged who are looking for something different and new.
Vodafone, for example, has been introducing various sub-brands in different markets (‘Yorn’ in Portugal, ‘U’ in India and now ‘Voxi’ in the UK) to the demographic under 25. Vodafone feels that this demographic has a similar pattern of mobile usage, as they are limited with budgets and like to stay socially connected consuming a lot of data.
The Hotel giant Marriott created ‘Moxy’ with features such as keyless entry, mobile check-in, game arcades and bowling alleys, etc. The intention of creating the sub-brand was to attract a new audience not just the young but also for the young at heart, be it 28 or 50.
Air France is also trying out a similar strategy with its upcoming sub-brand ‘Joon’ catering to the young and digital-savvy generation where even the cabin crew would be dressed like its customers.
Does this mean that a sub-brand with a standalone identity the right brand strategy?
Maybe not, because there are many brands adopting the former strategy drawing a direct link with the parent brand like the Kettle Chips sub-brands premium Chef’s Signature range and healthy baked Kettle Bites incorporate key elements of the overall Kettle Chips branding, from strong colors to the woodcut-style logo.
And there are brands like Airtel that have never shied away from reinventing and repositioning themselves as a young brand that suits requirement for not just the young but also other demographics.
Another classic example of adopting the right brand strategy is CYBG, which owns Clydesdale Bank and Yorkshire Bank, by blending both the strategies right while launching a digital banking platform ‘B’ where the concept was to create a fresh tech-focused brand to break away from conventional banks with a modern and vibrant app and website. But, what they did was not just create a standalone identity but also create a direct link with the parent brand by using ‘powered by’ to assure their customers are in safe hands.
So, the big question now is what’s the right strategy for creating sub-brands? I would say, there is no one size fits all strategy as different brands have different requirements that require a lot of thinking and research. For marketers, it’s important to understand a couple of W’s and H’s –
- What’s the objective of creating the sub-brand?
- Which segment and demographics do you wish to target?
- Why should they anchor the sub-brand to the parent brand or create an individual identity for it?
- How would the sub-brand connect and fill the gap between the brand and the consumers, unlike your competitors?
Once the answers to these and more are clear, it becomes easy to formulate the right strategy and be different from others.