Brand portfolio strategy: How do companies plan and implement multiple brands?

To develop, enterprises often need to launch multiple products or brands to expand their business scope. So should these products with diverse businesses and different positioning be launched under new brands or under the endorsement of the original brands? How can the advantages of one plus one greater than two be achieved between new and old brands, sub-brands and parent brands? Take a look at this article, which may provide you with new ideas on multi-brand strategic synergy.

In most cases, if a company wants to develop and grow, it cannot have only one product, but needs to have a combination of multiple products and categories, or get involved in diversified businesses. At this time, a new brand issue is brought about.

First, for newly launched products, should they use the original brand or a completely new brand? What are the standards?

If a new brand is adopted, it means that the company has multiple product brands. At this time, new problems arise: how to deal with the relationship between different brands? How to form a segmentation, how to allocate resources, and how to develop in a coordinated manner? Moreover, what is the relationship between product brands and corporate brands? How to empower and support each other?

To explain these issues clearly, I would like to first introduce a tool: Brand Relationship Spectrum [1].

The brand relationship spectrum proposed by Professor David Aaker is the most important tool in brand portfolio strategy. It defines the role of a brand within an enterprise and the relationship between all the brands owned by the enterprise (including the relationship between product brands, the relationship between product brands and corporate brands, and the relationship between product brands and other endorsed brands).

Through the brand relationship spectrum, we can understand the degree of independence of a brand in the corporate organization, that is, the degree to which the brands are separated from each other in the company's strategic execution; as well as understand the independence of the brand in the minds of customers and what are the brand factors that drive customers' purchasing decisions.

1. Brand Relationship Spectrum

The brand relationship spectrum includes four basic brand relationships and nine secondary relationships derived from them.

1. Single brand

Single brand refers to the situation where a company produces several products using the same brand. In a single brand, the brand will span different product market categories. It includes two secondary relationships: same identification and different identification .

The same identification means that all products use unified LOGO, VI and other identification elements.

For example, all products under Volkswagen, whether it is Magotan, Sagitar, Phaeton, Tiguan, Touareg, Touron, Passat, Golf, Santana, etc., all models have the Volkswagen VW logo.

Another example is Philips. The company's audio, television, light bulbs, computers, electric shavers, coffee pots, juicers and other products are all named under the same brand name "Philips".

Different identification means that all products use the same brand, but the brand identification elements are different in different business categories.

A typical example is Nestlé, whose business is very extensive, covering coffee, cold drinks, milk powder, infant nutrition, nutritious cereals, drinking water, snacks and biscuits, pet food, condiments, etc. Although most of these products use the "Nestlé" brand, the Nestlé logo varies greatly in different categories, as shown in the figure below.

The benefit of a company using a single brand strategy is that it saves resources. All products and all marketing and communication activities are centered around enhancing the assets of the same brand, which helps to create economies of scale for the brand.

Moreover, when a company launches a new product, using an existing successful brand can save the cost and time of launching the new product and reduce the risk of failure.

However, the disadvantage of using a single brand is that it will weaken the personality of each product; if the differences between different products are large, it will also cause consumers to have a vague understanding of the brand and not know what the brand actually represents.

Moreover, if all eggs are placed in one basket, if there is a problem with one product, it will affect the entire brand.

2. Main and sub-brands

The main and sub-brands are a brand management method that combines a unified iconic main brand with an independent sub-brand. It includes two secondary relationships: main brand driven and joint driven .

Main brand driven means that in the structure of main and sub-brands, the main brand plays the main driving role.

The main brand is the protagonist, and it determines consumers' perception and association with the entire brand. The sub-brand is weaker, and generally only appears as a code name, without an independent brand image and personality, and cannot exist independently from the main brand.

The combination pattern is generally the main brand name plus a descriptive business name to form a new brand name, which is then combined with an independent brand LOGO and VI.

For example, under Meituan, in addition to the main brand Meituan, there are also Meituan Takeout, Meituan Homestay, Meituan Premium, Meituan Grocery, etc. They each have their own brand logo, their own appeal, their own APP and mini-programs, and their business and brand operations operate independently. These are the main and sub-brands driven by the "Meituan" main brand.

Another example is NetEase News, NetEase Cloud Music, NetEase Yanxuan, NetEase Mail Master, etc., which are all owned by NetEase. In the main brand-driven model, "takeout", "homestay", "cloud music", and "Yanxuan" are just descriptive terms.

Descriptive terms do not have brand attributes, have no brand driving force, and have no independent value. The brands of "takeout" and "homestay" do not exist in the market.

Joint drive means that the sub-brand is also very powerful and has an independent brand image and personality; the sub-brand and the main brand can go hand in hand and play a role together, and even greatly increase the value of the main brand. The combination mode is generally the main brand name plus the sub-brand name, and it appears in the form of a joint LOGO combination when applied.

Like Philips mentioned above, it has a sub-brand in the field of maternal and infant products, called "Avent". The Philips logo and Avent logo will appear at the same time on the baby bottles and nipples produced by Philips, as well as in its advertising images.

An important feature of joint drive is that the sub-brand can exist independently from the main brand, and consumers can immediately know which main brand it belongs to. For example, for many mothers, even if Philips is not mentioned, and only Avent is mentioned, they know what this brand does and whose products it is.

It can be said that the word "drive" reflects the power of the brand to promote purchasing decisions and defines the consumer's user experience.

To distinguish whether it is driven by the main brand or the co-driven, you only need to ask the consumer: "What brand of product did you buy?", "What brand of product do you use?", and the answer he gives is the brand that has the main driving force for the purchase decision.

However, no matter which model is adopted, the main brand is the core driver, and the sub-brand shares the driving role with the main brand. However, the sub-brand cannot exceed the driving role of the main brand, nor can the sub-brand be far away from the recognition of the main brand.

This is just like all Toyota models have the Toyota logo, but there is one special model, the Crown. The Crown is Toyota's flagship model, classic, with a long history, and has repeatedly achieved sales success. It is also the first model Toyota exported to China.

In order to strengthen the presence of the Crown, the Crown has a Crown logo on the front and a Toyota logo on the rear. In Crown advertisements, these two logos also appear at the same time. This is actually a jointly driven brand model.

If you ask a Toyota Crown owner "What brand of car did you buy", then the answer you will most likely get is "Toyota". Of course, a few people will say "Crown" or "Toyota Crown", so Toyota is the main one and Crown is the secondary one.

The advantage of a company using main and sub-brands is that it achieves both unity and flexibility.

The master brand can establish a unified brand image and accumulate assets such as brand awareness and associations.

When companies adopt the model of main and sub-brands to promote new products and new businesses, they are essentially borrowing the reputation and influence of the existing main brand to provide guarantees for the sub-brand and enhance the persuasiveness and credibility of the sub-brand. It is a kind of "borrowing a boat to go to sea".

The role of the sub-brand is to extend the main brand to a new and important market segment. With the help of the sub-brand, the main brand covers different categories of the market, such as Meituan and NetEase.

At the same time, sub-brands can improve the associations of the main brand to ensure that the main brand has different values ​​and personality expressions in different fields and market segments.

For example, Nestlé’s infant formula brand “Nestlé NAN” represents enhancing the baby’s defense and protecting healthy growth, while the packaged drinking water brand “Nestlé Pure Life” represents clear, refreshing, healthy and pleasant taste.

However, only brands with broad enough category positioning and brand connotations have the space to extend sub-brands to market segments. If consumers think of a brand instead of an abstract concept and value, but a specific product, it is difficult to extend it.

3. Endorsement brand

Endorsement brands represent the supporting brands behind product brands. The brand that provides endorsement is called the parent brand, and the endorsed brand is called the son brand, so endorsement brands can also be called parent-child brands. It includes three secondary relationships: strong endorsement, associated name, and symbolic endorsement .

Strong endorsement means that the parent brand provides strong support to the sub-brand, and the two have a strong correlation. However, the parent brand is not the main character of the communication, it will only be presented in a striking way.

For example, Volkswagen Group has a car brand from the Czech Republic, Skoda. In 2006, SAIC Volkswagen introduced it to China, and Skoda became the third brand of Volkswagen Group to be put into production in China after Volkswagen and Audi. Although Skoda has a long history and a good reputation in Europe, it is "hidden in the boudoir and unknown to the world" in China.

Therefore, the Skoda brand used the Volkswagen brand to strongly endorse it. Skoda's official website, official Weibo, official public account, official Douyin account, etc. are all called "SAIC Volkswagen Skoda", and the offline 4S stores also have a big "Shanghai Volkswagen Skoda" written on the storefront.

The extremely high popularity and brand recognition of "Volkswagen" in China provided strong support and trust guarantee for Skoda's successful entry into the Chinese market.

An associated name provides endorsement through similarity and consistency of the brand name.

In Acker's opinion, an associated name is actually a family brand concept, which uses some elements of the main brand name, such as letters and words, to create a series of sub-brands.

For example, McDonald's has registered hundreds of brands using Mc and Mac around the world, such as McCoffee, McDonuts, McFortune Cookies, McRib, Big Mac, Chicken McNuggets, etc., and actively protects the prefix Mc. In China, this is reflected in brands with the word "Mc", such as Chicken McNuggets and McCafe.

(In January 2019, McDonald’s “BIGMAC” trademark was revoked by the European Union Intellectual Property Office (EUIPO), and McDonald’s filed an appeal)

For example, Xiaomi and its supply chain companies have many brands and companies with the word "Mi" in their names: Hongmi, Mijia, Mi Rabbit, Yunmi, Huami, Zhimi, Qingmi... These names give people the impression that they are owned by Xiaomi. In fact, they are endorsed by the "Xiaomi" brand through the association with the name "Mi".

Therefore, the associated names are different brands named with the same "generation", which makes people feel that the products are produced by the same family. In this way, the "elders" or "eldest sons" in the family can provide endorsements for the later family brands. This is the case with Baidu's Xiaodu and Du Xiaoman, and New Oriental's Dongfang Selection.

Just like this brain teaser question: "Xiao Ming's father has three sons. The eldest son is Damao, the second son is Ermao, what is the third son's name?" Many people subconsciously think that the third son should be called "Sanmao". "Da Mao" can easily endorse "Sanmao", but it is difficult to endorse "Xiao Ming".

However, there are more clever uses of related names, such as MINI COOPER. Many people call this car brand "BMW MINI", making people feel that it is a sub-brand of BMW, but in fact MINI and BMW are independent of each other in brand operation and have nothing to do with each other in brand communication.

There will not be any BMW elements in MINI's advertisements. The two are just opened together in terminal 4S stores and placed together at auto show booths. The brand names are linked together and spread through word of mouth.

However, this name association injects the high-end and luxury of the BMW brand into MINI, which increases the value and class of MINI cars in the minds of consumers. This is the endorsement provided by BMW.

A similar situation exists between Mercedes-Benz and SMART.

Symbolic endorsement also refers to the role of the parent brand in providing guarantee, endorsement and support to the sub-brand, but the two are in a soft endorsement relationship. The parent brand has a low presence and only plays a symbolic role. It is usually hidden behind the scenes in the communication of the sub-brand, rather than appearing together.

For example, P&G, as one of the world's largest chemical daily products companies, has a very high reputation and influence in the fields of personal care, household cleaning, and beauty. Many of P&G's product brands, especially newly launched ones, will emphasize the endorsement of the parent brand P&G, because the two words "P&G" represent quality, professionalism, and peace of mind, which is a symbolic value. When new brands gradually mature, the role of P&G's endorsement will weaken.

In addition to the brand growth stage, the parent brand's presence is also related to the brand grade and brand attributes.

For example, the famous British ice cream company Wall's has multiple sub-brands. The packaging of products such as Cornetto, Playboy, Melaleuca, and Mckus all have a very eye-catching red and white heart-shaped Wall's logo, but the packaging of the mid-to-high-end ice cream brand Magnum only has a very small Wall's heart-shaped pattern, and the color also uses Magnum's VI color.

The same is true for Procter & Gamble. Its popular brands such as Head & Shoulders, Safeguard, Crest, Tide, Ariel, Pampers, Oral-B, etc. will use P&G's endorsement more often, and the P&G corporate logo often appears at the end of TV commercials.

However, P&G's high-end brands such as SK-II and OLAY rarely emphasize the existence of P&G to avoid lowering their own grade and image. In addition, SK-II products are not sold in P&G's Tmall flagship store.

In addition, P&G once had a famous food brand, Pringles potato chips. In order to avoid consumers associating cosmetics and shampoo when buying Pringles, it does not use P&G as an endorsement.

P&G is just a symbolic existence. When a consumer buys Head & Shoulders or Crest, he will say that he bought Head & Shoulders shampoo and Crest toothpaste, not P&G, although both are produced by P&G.

Therefore, the brand structure of the endorsement brand is driven by the sub-brand, which plays a key role in consumers' purchasing decisions, and the parent brand only plays a secondary driving role.

The brand that provides endorsement is usually a corporate brand, which represents an organization rather than a product. Corporate brands rely on various product sub-brands to influence and cover multiple fields. In addition to using corporate brands, many companies will create special technology brands to provide endorsement support for their company products.

A typical example is the automobile industry. With the dramatic changes in today's automobile industry, automobile products are evolving towards electrification and intelligence. Whether a car has a sense of technology and intelligence has become the most important value factor for consumers when buying a car.

Therefore, more and more car companies have begun to build technology brands, packaging their own car-making technologies into brands, disseminating them to consumers, and strengthening the corporate brand image with a sense of technology.

For example, in June 2020, Geely Auto announced the start of the "Technology Geely 4.0" era and launched the modular car manufacturing technology brand "CMA Super Matrix";

In July 2020, Great Wall Motors proposed the corporate strategy of "Great Wall of Technology", and at the same time released three major technology brands: "Lemon", "Tank" and "Coffee Intelligence"; in November 2020, Changan Automobile proposed a new corporate slogan of "Technology Changan, Smart Partner", and in December 2022, Changan Technology Company was established.

They all hope to endorse product brands and specific models through the renewal of corporate brands and the launch of technology brands, thereby enhancing the technological content and perceived value of the products.

There is also BYD. As we all know, the core of new energy vehicles consists of three major parts: battery, motor, and electronic control.

In March 2020, BYD took the lead in launching the "Blade Battery" technology brand; in January 2023, it launched a four-wheel independent motor technology called "Yisifang"; in April 2023, it launched a new technology brand, the intelligent body control system "Yunnian".

As a result, BYD has formed a complete technological layout in the three major areas of new energy. These three major technological brands have made an indelible contribution to changing consumers' perception and attitude towards BYD and promoting product sales.

In addition to technology brands, some companies will create service brands for endorsement, such as Buick's "Buick Care" (the first after-sales service brand in China's auto industry) and JAC's "JAC Family".

In fact, both technology brands and service brands belong to element brands, which are to build a certain value element in the final product into a brand, thereby endorsing the product brand. For a detailed introduction to element brands, please refer to "Brand 30 Lectures 10 | B2B Brand Strategy", which will not be repeated here.

The benefit of using endorsement brands is that they can create credibility, value perception and quality assurance for sub-brands through mature and well-known parent brands. Especially when sub-brands are just launched, the endorsement of the parent brand can help them gain consumer trust more quickly and gain a foothold in the market quickly.

Moreover, the three endorsement modes of the parent brand mean that the endorsement can be significant and strongly binding, symbolic and unobtrusive, or merely visual or verbal. The sub-brand is only slightly influenced by the parent brand, which ensures the independence of the sub-brand, allowing it to operate autonomously and flexibly and freely develop its own image, personality and brand assets.

However, the endorsement brand strategy places high demands on the parent brand. It must be a successful brand with sufficient influence. If you yourself are not well-known, how can you endorse others?

Even for a company as powerful as P&G, many consumers still don't know that Safeguard, Crest and other brands are owned by it. Therefore, in addition to managing each product brand well, P&G must also set aside a special budget for corporate brand promotion to let more people know and identify with P&G, so that it can better play its endorsement role.

As for how to build a corporate brand, we will discuss it in detail in “30 Lectures on Brands 22 | Public Brand Building”.

Therefore, endorsement brand is the best choice for mature large enterprises with diversified business forms, while it is difficult for small and medium-sized enterprises to adopt this brand structure. You can see it from the cases I used in this article. They are basically examples of various automobile giants and fast-moving consumer goods giants, and there are few small enterprises.

4. Multiple brands

Multi-brand refers to a strategy in which a company uses different brands in different business areas and market segments, and there is no connection between the brands.

In a multi-brand model, each brand is completely independent of other brands, plays a driver role independently and completely, and only targets its own specific market segment and business scope. It includes two secondary relationships: shadow association and mutual non-association .

Shadow association is an invisible relationship that will have some soft exposure on the brand communication side.

For example, General Motors has three main brands: Buick, Chevrolet and Cadillac. These three are shadow-related. Their brand operations are independent of each other, but they will use the GM corporate brand as endorsement, and use the technology brands created by GM to promote their own products, such as the electric platform "Auto Power" and the intelligent driving technology "Super Cruise".

Unrelated means that each brand is an independent brand and has no relationship with each other. Consumers don’t even know that they are from the same company.

For example, the BMW Group also has three major product brands: BMW, MINI, and Rolls-Royce. BMW and MINI are closely related, but many people don’t know that Rolls-Royce is owned by BMW. This is because Rolls-Royce is the world’s top luxury car brand, while BMW is only a mid-to-high-end luxury car brand.

If people think that Rolls-Royce is produced by BMW, it will inevitably reduce the sense of dignity of Rolls-Royce in the minds of consumers. Therefore, Rolls-Royce has no connection with the other two brands.

There are three benefits to adopting a multi-brand strategy.

(1) Professional, flexible and adaptable

Multi-brand can fully adapt to the differences in different markets and the personalized requirements of different consumer groups. Consumers are very different and complex. No product can be perfect to fully meet the needs of all consumers, and no market is impeccable to be monopolized by one brand. This leaves market opportunities for professional vertical brands.

The biggest advantage of adopting a multi-brand strategy is that each brand focuses on a market segment and creates its own clear brand core value and distinctive brand image, thereby gaining a foothold in the market.

For example, Jiang Xiaobai Liquor Industry has the liquor brand Jiang Xiaobai, which targets young people; Jiangji Kaoliang Liquor, Sanwu Zhiyou, and Jiangjin Shaojiu, which target traditional liquor drinkers (age 30+); and Luxi Laojiu and Luxi Yuanjiang, which target high-end people.

In the low-alcohol beverage market, Jiang Xiaobai has plum wine brands Meijian and Shiguang Plum Wine; it has a rice wine brand Beige, and a fruit-flavored low-alcohol liquor called Fruit Cube.

In Jiang Xiaobai's brand structure, there are mass brands, high-end brands, professional vertical brands, flagship brands, and follower brands, which greatly enrich the company's strategy and approach to the market.

(2) Increase market share

Companies use different brands to launch different products and categories, enter different consumption scenarios, and attract different target groups. This can effectively occupy various market segments, thereby increasing the company's overall market share and achieving larger-scale growth.

For example, the classic case in the history of marketing, the “Cola War”. Although Pepsi’s strategy was brilliant and praised by people, in the end Pepsi failed to defend or replace Coca-Cola’s dominant position. Coca-Cola is still the first perception of cola.

Although from the perspective of product brand, Coca-Cola is much stronger than Pepsi; but from the perspective of company operations, PepsiCo is stronger than Coca-Cola, because in addition to Pepsi, PepsiCo also has a large number of brands such as Lay's, Quaker, Gatorade, Doritos, etc.

Therefore, there is a view in the marketing community that losing the cola war is not a bad thing for Pepsi, but even a good thing, because it has inspired Pepsi to create more brands outside the cola market and achieve greater growth.

(3) Horse Racing Mechanism

When a company has multiple brands, it can form an internal competition mechanism to ensure the survival of the fittest. Brands with good performance will be given more resources to support them, while brands with poor performance will have their investment reduced or even delisted. This can help brands grow more healthily, optimize the company's resource allocation, and reduce the risk of a single brand's poor performance affecting the company's overall performance.

At the same time, there are four disadvantages to adopting multi-brand operations.

(1) Dispersed resources

Brand management requires long-term and continuous investment, or to put it bluntly, it takes a lot of money to build a brand. So, building multiple brands naturally requires a lot of money, but corporate resources are limited, and each brand under it needs to be promoted and built. In the end, each brand can only get a small amount of money, which may result in no brand being built well.

There are many companies that start out by developing multiple brands, but eventually have to return to just one brand. Such cases are not uncommon.

For example, in 2009, Chery Automobile launched a multi-brand strategy and introduced four major brands in succession: the popular car brand "CHERY", the mid-to-high-end passenger car brand "RIICH", the all-round commercial vehicle brand "Rely", and the micro-van brand (commercial vehicle) "KARRY".

But within two years, Chery found that: first, the company's resources did not support the creation of so many brands; second, the company's hardware and software did not match the creation of high-end brands. So Chery gradually stopped using Riich and Rely, and officially announced in 2014 that it would "return to one Chery."

Coincidentally, another car company, Geely Automobile, also implemented a multi-brand strategy in 2009: the popular brand "Global Eagle", the mid-to-high-end brand "Emgrand", and the classic high-end commercial vehicle brand "Shanghai Englon".

But in 2014, Geely also announced its "return to one Geely", canceling three sub-brands and refocusing on Geely, a more well-known brand, to do marketing.

Going it alone and dispersing resources are the primary problems of the multi-brand strategy. Therefore, many marketing theories and experts are against companies extending their brands, developing multiple product lines, building multiple brands, and conducting diversified businesses.

(2) Internal friction

When a company implements multi-brand operation, it needs to accurately define each brand, implement strict market differentiation, and create its own unique value connotation and image personality. If there is a lack of differentiation between different brands, it is easy to fall into internal friction and steal its own business.

As I wrote in “30 Lectures on Brands 17 | Social Brands”, when Adidas acquired Reebok, the two brands had similar strategies and lacked essential differences, so Reebok became a victim and quickly began to decline; and Adidas ultimately had no choice but to sell Reebok at a low price, ending in a miserable state.

(3) Management Difficulty

Multiple brands require more management than a single brand. Each brand must have its own clear definition and be differentiated from other brands, which is difficult in itself.

Moreover, each brand requires a separate team to operate, and may also require separate channels and stores, which will undoubtedly increase the difficulty and cost of management.

(4) Diversification Trap

Corporate organizations always have an instinct to continuously expand their business, extend their product lines, and launch more brands. However, this approach will increase the management costs of the company, make the organizational structure increasingly bloated, and make the hierarchy increasingly complex. It will no longer be sensitive to market signals and will be difficult to respond quickly, bringing long-term risks.

On the other hand, blind expansion and large investments by enterprises can easily lead to capital chain problems. Multi-brand strategy should be designed according to the business objectives and business strategies of the enterprise to determine the optimal length of the brand portfolio.

The above is my definition of different brand structures in the brand relationship spectrum, analysis of their advantages and disadvantages, and their respective applicable situations. Don’t underestimate these differences, and don’t think that they are just boring academic divisions that are of little use in actual work. In fact, the brand relationship spectrum represents different business strategy choices for enterprises and defines the business scope of a brand.

In early April this year, Ren Zhengfei, the main founder and president of Huawei, reiterated that "Huawei does not make cars" and stressed that "the 'Huawei/HUAWEI' logo cannot appear in the promotion and appearance design of the whole car." At the same time, many Huawei executives publicly accused "some departments and some individuals of abusing the Huawei brand."

This move is aimed at AITO's use of the Huawei brand some time ago. Wenjie is a high-end automobile brand jointly created by SERES and Huawei. Huawei has provided comprehensive support and in-depth empowerment in vehicle design, software ecology, supply chain management, brand marketing, sales channels, user management and other aspects.

In order to better promote and sell Wenjie, under the leadership of Huawei's intelligent automobile department, Wenjie used the words "HUAWEI Wenjie" in its brand promotion and posted the "HUAWEI AITO" logo in stores. The sales staff in the store also intentionally or unintentionally emphasized that Wenjie is a Huawei brand.

This led to Huawei's top management's requirements for Huawei's brand usage standards and the reaffirmation of the resolution that "Huawei will not make cars". After the resolution was made, Richard Yu, who is in charge of Huawei's intelligent automotive solutions BU, was depressed, but he had no choice but to start cleaning up and reorganizing promotional materials and removing the Huawei logo from the Wenjie store.

In fact, "HUAWEI asks the world" and "AITO asks the world, deeply empowered by Huawei" seem to be just different in wording, but there are essential differences in the brand relationship spectrum.

The former is the main and secondary brand , Huawei is the main one and Wenjie is the secondary one. In the minds of consumers, they buy Huawei's car, and Wenjie is Huawei's own son. This means that Huawei is personally involved in making cars, responsible for the research and development, production, promotion and sales of the whole vehicle.

The latter is an endorsement brand , Wenjie is a product brand, and Huawei is a supporting parent brand. Consumers buy Wenjie's car, but this car has components and intelligent solutions provided by Huawei. It means that Huawei only acts as a supplier and partner of car companies, helping them to build and sell good cars.

These two different brand structures represent Huawei's perfectly different development strategies in the automotive field, and have a significant impact on Huawei's long-term planning and future development. Therefore, they have attracted statements from Huawei's founder and senior management.

It can be seen that how to design a brand portfolio strategy is no longer just the work of the corporate brand department, but has risen to the corporate strategic level, requiring the company's boss and management to make the final decision. Corporate decision makers need to stand at a strategic height and plan a scientific and reasonable brand architecture, so as to lead the healthy and sustainable development of the company.

After explaining the brand relationship spectrum clearly, let us now answer the specific confusions and problems that companies encounter in the actual brand management process.

2. In the end, is it better to “have only one child” or “have multiple brands to get rich”?

When a company launches a new product or opens a new business unit, the first question it needs to answer is whether to use the original brand or adopt a completely new brand?

Using the original brand to launch new products is called brand extension. For example, Apple initially produced computers, and later launched the iPod music player, iPhone smartphone, iPad tablet, Apple Watch smart watch, AirPods wireless headset, etc. These products are all extended from the Apple brand.

There are many similar companies, including Sony, Samsung, Nestlé, Midea, 3M, etc., all of which have many products and product categories under one brand.

There are many companies and cases that adopt single brand architecture and multi-brand architecture. The above also analyzes the advantages and disadvantages of different brand strategies. In fact, which brand route a company ultimately adopts depends fundamentally on the company's own strength, as well as the industry and market conditions in which it is located.

Internally, this is a question of corporate maturity.

To successfully build multiple brands, companies must have sufficient resources and a strong team. Startups and growing companies are more suitable for a single brand strategy, first cultivating one brand, and then considering the second and third brands. All resources and energy are used to build this one brand, and new products are continuously added to the same brand, which can also strengthen the brand momentum and help the brand grow rapidly.

Like Chery and Geely mentioned above, Chery Automobile now has four major brands, namely Chery, Jetour, Xingtu and iCAR. Geely Group owns Geely, Lynk & Co, Zeekr, Volvo, Polestar, Radar, Yuancheng and Lotus. This is because the strength of Chery and Geely is no longer the same as it was back then. Of course, with so many brands, whether each one can succeed is unknown.

Externally, this is a question of market maturity.

For emerging markets, a single brand is feasible because emerging markets are often led by technology and innovation, and product functions and customer needs have not yet been largely differentiated.

However, as the market matures, consumer demands begin to differentiate, and a large number of personalized demands are generated in addition to basic demands. At this time, multiple brands are needed to meet the needs of different consumer groups and occupy more market segments.

At the same time, market competition has become fierce. It is impossible for one brand to dominate the entire market. In order to seize more market share, companies have to start multi-brand operations and shift from technology and innovation leadership to brand leadership.

In the cases listed in this article, the FMCG and automobile industries mostly adopt multi-brand strategies, because these markets are mature enough and have entered the stage of refined operation. However, 3C, Internet, and industrial products mostly adopt single-brand strategies, because the market is still growing and brand is not a key decision-making factor.

The above two conditions are the general principles for how to choose between single brand and multiple brands, but there are also two specific situations where companies cannot use the original brand extension and must create a new brand.

One is vertical. Companies generally need to create new brands to extend upward or downward in terms of brand level and price range.

It is common sense that a brand cannot represent both high-end and affordable products in the minds of consumers. If the original brand is a high-end brand and the company wants to launch a cheaper product to enter the cheap market, it generally needs to launch a new brand because cheap products will damage the original brand image and value perception.

When introducing the multi-brand structure above, it was mentioned that high-end brands and popular brands are often unrelated to each other. This is why SK-II does not use P&G endorsement and Rolls-Royce has no relationship with BMW.

Therefore, Xiaomi's cheap products use the new brand "Redmi"; and it is said that NIO, a new car manufacturer focusing on high-end luxury, will soon launch a brand with a lower price range called Alpine.

At the same time, if the original brand is a popular brand, and the company now wants to sell more expensive products and enter the high-end market, it generally needs to create a new high-end brand because the original brand power is not enough to support high-end products.

For example, Toyota launched Lexus to enter the luxury car market, Honda launched Acura, and Nissan launched Infiniti.

The other is horizontal. The attribute span of new products is too large to form a unified brand awareness with the original products. At this time, new brands are also needed.

For example, a company originally made mobile phones, but now it is necessary to sell biscuits. It is necessary to create a new brand because the product attributes of mobile phones and biscuits are too different and the correlation is weak. Consumers' perception of the value and brand image of mobile phones is completely inseparable from the demand and perception of biscuits.

In order to explain this issue in detail, I will give you two practical cases.

One is Bawang Shampoo.

Bawang emphasized that he is a family of traditional Chinese medicine and uses the ancestral blood-nourishing and hair-loss prescription to solve the problems of consumers' hair loss and hair loss.

In 2010, Bawang launched Bawang Herbal Tea, which launched a lot of advertisements at that time and invited Donnie Yen to endorse him. But Bawang Herbal Tea became cold in a few years and stopped operating in 2013. Why?

Herbal tea and shampoo belong to a very different category. Although in the eyes of enterprises, they are both made of Chinese herbal medicines and can generate resource sharing in raw material procurement, technology research and development and production, it is not the same in the minds of consumers. I am afraid that Bawang Herbal Tea will have a shampoo smell.

The other is Meize sanitary napkin.

Meize Honeymate is a cycle care brand focusing on zero chemical addition and trendy brand design. The brand advocates bringing full love and sweet care to female consumers.

In addition to sanitary napkins, Meize has also launched brown sugar flower tea products, which once had very good sales and were loved by consumers. In fact, sanitary napkins and brown sugar flower tea also belong to a very different category, but the combination of the two is not contrary to each other. Why is this?

This is because sanitary napkins and brown sugar flower tea can appear in the same consumption scenario. Although their products have different functions, the love and care experience brought to consumers are the same, so it doesn’t matter if the brands are called “Meize”.

The problem with shampoo and herbal tea is that they do not belong to the same consumption scenario. Different scenarios mean different consumption experiences, so they cannot be covered by the same brand. Therefore, Bawangliang should take a new brand name, such as Pomelo Herbal Tea.

Therefore, the key to judging whether to adopt a new brand is not the category, but the scenario. Under two conditions, companies must adopt a new brand when promoting new products.

1. The new products and the original products have very different categories in terms of product categories and there are almost no common characteristics;
2. New products and original products do not belong to the same consumption scenario and cannot create a consistent user experience.

On the contrary, if the categories are the same or similar and belong to the same consumption scenario, then the company can use the old brand to extend it when launching new products. Brand extension should be based on the consumption scenario, and all product lines express a consistent user experience in the same consumption scenario, so as to facilitate the creation of a unified brand.

3. How can enterprises build second and third brands?

When a company builds its first brand, there is no other way, just to do it honestly. But when launching the second and third brands, it is different. The company has a variety of choices. It can operate independently and build a brand new brand from 0 to 1 again; it can also borrow the fame and strength of existing brands and corporate brands, and use the support of old brands to create a new brand.

Especially many teams responsible for the operation of new brands always hope to borrow more resources from old brands, and even wish to become a product series under the old brand. This is an inertial thinking of the organization.

Of course, this kind of thinking cannot be wrong, because building a new brand is a matter of losing every day, and the risk of failure is not high. Taking advantage of the old brand can improve the success rate and complete the team KPI.

Moreover, many successful brands actually did not do top-level designs as independent brands from the beginning and then implemented them according to the plan, but were incubated from old brands and naturally evolved.

Under this idea, there are three effective ways to build the second and third brands.

1. Independent brand, independent operation

The new brand operates as a completely independent brand from the beginning, without any connection with the original brand, and even deliberately avoids relationships with the original main brand and corporate brand. Many companies often adopt this approach when launching high-end brands.

There is another typical approach, that the original brand is both a product brand and a corporate brand, and later the company created a new product brand. The new brand does not want to endorse the original corporate brand, but will become more independent, strengthen the personality of the new brand and weaken the original corporate brand information.

For example, the high-end mineral water brand Kunlun Mountain launched by Jiaduobao Company only shares R&D, production, and channels, and even channels are not completely shared. Kunlun Mountain, as a high-end brand, needs to build its own channels. In terms of brand building, Kunlun Mountain has nothing to do with Jiaduobao, and consumers do not even know that these two brands belong to the same company.

2. Independent brand, parent brand endorsement

The new brand is an independent brand from the beginning, but it will borrow the resources of the existing brand to endorse it in communication and promotion, thereby accelerating its growth.

For example, the mobile phone brand Honor was an independent brand when it was first launched, but in various publicity reports, it always calls itself "Huawei Honor", and Huawei brand elements always appear in marketing and promotion activities and materials.

At this time, Honor adopted a brand strategy to endorse strongly , and use the highly-known Huawei to background Honor's brand growth.

Later, as the Honor brand grew, Huawei gradually disappeared and no longer emphasized the existence of relationships between them. At this time, Honor adopted a strategy that was shadow-related multiple brands .

By the end of 2020, Huawei will sell Honor, no longer own shares in Honor, nor will it participate in business management and decision-making. At this time, the two will have nothing to do with it.

The creation of the Honor brand is borrowed from Huawei's parent brand endorsement. If Honor was only a product series under Huawei mobile phones at the beginning, it was called the Honor series alongside the P series, mate series, and nova series, and the brand is called Huawei, and the only logo on the mobile phone is Huawei. Then, this brand strategy is a single brand with multiple product lines .

If the Honor series product line is very good, Huawei upgrades Honor to a brand and operates it independently, then this is the third method we will talk about below.

3. Incubate the main brand and split it when you grow up

Under this model, there was no independent brand at the beginning, but there might be only one product. As a new business under the original brand, it was split out and turned into an independent brand because of its good sales and good market prospects.

On August 30, 2022, a 25-meter-long breakup poster appeared on the roof of the McDonald's headquarters building in Shanghai. McCafe announced that he would break up with McDonald's and said, "I am McCafe, don't call me McDonald's coffee anymore."

This wave of "breakup" marketing quickly aroused heated discussions among netizens, and it became a hot search list on Weibo, making a wonderful debut for Mai Coffee's brand independence and the launch of its new product "milk iron".

This wave of marketing represents the changes in McDonald's brand strategy. In the past, coffee was just a product or a business in McDonald's stores. Whether it is hamburgers, fries, or coffee, they all belong to McDonald's brand.

Now with the good development trend and broad prospects of the coffee market, Mai Coffee has become an independent brand that will compete with Starbucks, Luckin and other brands.

For example, the same is true for the tank brand under Great Wall Motors. "Tank" was originally a technical brand and was released in July 2020. It is a modular car manufacturing platform under Great Wall that specializes in creating super wild models.

Later, Weipai WEY, a product brand under Great Wall, developed an automotive product based on the "Tank" platform: Tank 300. This is a product series under the WEY brand.

Since the market response after the launch of the Tank 300, it continued to sell well, and occupied the professional off-road SUV brand. So in April 2021, the tank left WEY and became an independent brand, and changed from the WEY tank series to the tank car brand.

This is a way to incubate new brands with the main brand, and the brand gradually becomes independent.

Re-examine the brand relationship spectrum and you will find that it not only reflects the degree of independence of the brand in the corporate organization, but also the degree of closeness to other brands.

More importantly, it reflects the process of continuous development and evolution of a brand. Building a brand is not a one-day effort, but a protracted process. In this process, the strategies and brand structure adopted by the brand can be constantly changed. From the illustration of the brand relationship spectrum, we can see that from left to right, the independence of the brand continues to increase.

The complete process of a brand from incubation of the main brand to brand independence. It can go through a complete process of " a single brand's product series - main and secondary brands, main brand driver, joint drive - brand independence, parent brand endorsement - complete independence ". The overall continuity of this relationship evolution constitutes the brand relationship spectrum.

Moreover, brand independence is not only independent at the brand structure level, but also at the entire business level. An enterprise usually has to go through such a process incubating new brands from within.

• Independent business - brands have begun to have independent names, trademark LOGOs, independent websites and APPs;
• Team independence - establish an independent team to operate the brand, one brand and one team, and have greater autonomy in brand decision-making;
• Financial independence - The brand team's financial accounting is separately calculated, set up separate KPIs, and bears its own profits and losses. At the same time, sales channels and stores have also begun to be independent;
• Company independence - Finally, the new brand becomes an independent company to operate, and can be listed separately, or divested or sold the brand's business.

Finally, let’s talk about a complete case of brand independence.

For Guangdong consumers, Wuyang Ice Cream can be said to be a household name and is a time-honored brand that has been eaten since childhood. This brand was run by Nestlé at the beginning.

In 1999, Wuyang and Nestlé reached a cooperation period of more than 20 years until the contract expired in 2021 and the two parties ended their cooperation. As the owner of the "Wuyang" brand, Guangzhou Light Industry and Trade Group turned to cooperate with Yuexiu Group and authorized "Wuyang" to Fengxing Milk, a subsidiary of Yuexiu Group, for operation.

Since "Wuyang Ice Cream" is an important combination of Nestlé's cold drink market in South China, Nestlé began to prepare for the future before the two parties ended their cooperation: If they lose "Wuyang Ice Cream", how should they maintain their market share?

In March 2021, Nestlé Ice Cream announced the launch of a new sub-brand "Guangxinyi", and updated the product design of Wuyang Ice Cream. On the new cone packaging, two LOGOs appeared at the same time: Wuyang's LOGO and Guangdongxinyi's LOGO, and Guangdongxinyi's LOGO is larger and more eye-catching.

This is a joint-driven main and secondary brand model , using the popularity of the old brand of "Five Sheep" to promote the new brand "Guangdong Xinyi".

Then on May 17, the "Wuyang" series trademark was officially transferred to Fengxing Food and transitioned to the end of September 30. On the eve of the end, Nestlé began to replace the "Wuyang" logo on the product packaging with "Nestlé" logo, and on September 19, it renamed the official account "Wuyang Brand Ice Cream" to "Nestlé Guangdong Xinyi Ice Cream".

Since the most eye-catching brand identification element in product packaging is the "Guangdong New Art" logo, many consumers have not noticed this change. They continue to buy the original ice cream product, but have not realized that what they bought is no longer "Wuyang Guangdong New Art", but "Nestle Guangdong New Art". So for Nestle, this change is relatively smooth and has not caused a huge impact on the market.

However, in the summer of 2022, a "ice cream war" appeared in the Guangdong market. Fengxing Wuyang began to "recognize the domestic Wuyang brand" in response to consumer demands, while Nestlé Guangdong Xinyi emphasized that "the brand has changed, the taste has not changed", and it is still the original manufacturer, original flavor, and original master.

In fact, it was not abrupt that Nestlé launched "Guangdong New" when it owned Wuyang. Because in May 2016, Wuyang Ice Cream began to launch a series of Cantonese dessert products for Guangdong consumers, including Yangzhi Ginkgo and Coconut Red Bean Flavor. In 2018, Wuyang Ice Cream launched a new series of products, further appealing to "Guangdong taste, everything has new ideas."

In 2020, Wuyang Ice Cream adjusted its entire brand appeal to "Taste of Guangdong, and it spreads joyfully", launched the brand theme song "My Guangdong Fashion Flavor", and held a new product launch conference for "New Guangdong Fashion Flavor of Guangdong" in Guangzhou's trendy historical scenic spot Taikoo Cang, and launched Guangdong specialty products such as coconut purple potato flavor, Hong Kong-style milk tea ice cream, frozen mandarin duck milk tea flavor flying fish crispy skin, and transformed the classic Cantonese dessert fruit salad, red bean paste, and mung bean paste into three "sugar water ice cream that can be eaten in your hands".

Therefore, it is natural for Nestlé to launch "Wuyang Guangdong New Idea". From the perspective of brand structure, this is from a single brand of the Wuyang Ice Cream Cantonese Dessert series to become the main and secondary brand. When the sub-brand "Guangyang New Idea" has a certain cognitive foundation, the change of the main brand will reduce market risks.

This is the process of brand structure evolution and independence, which is closely related to corporate operations and market strategy.

4. How to separate different products?

Although multi-brand is an objective need for many companies to pursue growth, and for different market segments and people, companies should indeed launch different brands to deal with it. However, when companies face the complex situation of multi-brands, two problems naturally arise in brand management: the distinction and coordination between different brands.

Only by establishing clear distinctions can internal friction be avoided and rob one's own business. Only by developing together can we form a joint force, give full play to the role of 1+1>2, and jointly help the company grow and grow.

So how to do it specifically? Let’s talk about collaboration in the next question, let’s talk about the distinction here first. Generally speaking, there are several distinctions between brands.

1. Dividing between product functions and categories

Different brands clearly distinguish between product functions and categories and divide their respective spheres of influence.

For example, there were five major shampoo brands under P&G in the past. Hippodrome focuses on anti-dandruff, Flue focuses on softness, Panting focuses on hair quality repair, Sassoon focuses on styling hair salon, and Ikalu (now changed to Herbal Essences planting philosophy) focuses on grass and trees.

Each brand focuses on a core function. Each brand has its own clear value proposition, each attracts its own target population, does not conflict with each other, and there will be no confusion in consumer perceptions.

They once helped Procter & Gamble occupy more than 60% of the market share in the Chinese shampoo market, with extraordinary market influence.

In recent years, Procter & Gamble has introduced two new high-end shampoo brands: Aussie Kangaroo and Haizhi Recipe.

Aussie Kangaroo comes from Australia, focusing on fluffy and high cranial tops, smoothing frizz, etc., creating a high-end hair washing and care brand for young people;

The hair recipe comes from Japan, using honey fruit essence hair care ingredients, focusing on "what people eat" oriental health wisdom, appealing to protect the health of the scalp, fragrance and taste. It still forms a distinction in function.

For example, the two major men's skin care brands under P&G: Gillette makes manual shavers and Braun makes electric shavers. It forms a distinction in categories.

2. Target population separation

Different brands target different target groups and target a group of people.

For example, Miller Brewing Company in the United States initially ranked eighth in the American beer market. In 1969, Philip Morris acquired it, and then sent many marketing experts in charge of the Marlboro brand to Miller, making drastic adjustments to its market strategy and brand structure. Soon Miller's sales jumped from eighth to second.

The specific approach is to segment the beer market according to consumption frequency based on the market research in the past year, and divide beer consumers into two categories: mild and severe groups. Subsequently, Miller developed three major brands, "High Life", Lite and "MGD" to promote them for different groups.

Heref targets heavy consumer groups.

Most of this group of people are blue-collar workers, about 30 years old, love sports, and watch TV for more than 3.5 hours a day. So, Hayref specially signed up a "Miller World" column in the TV station's sports program to promote the advertisement. The advertising slogan is "We have as much time as you have, as much beer as you have." The advertising footage is a scene of blue-collar workers working, such as drilling workers stopping the oil blowout, firefighters are extinguishing fires, crew members are driving ships, etc.

Wright targets mild people who love to drink beer but care about the problem of beer making people fat.

Miller's research found that the consumer group that is healthy and diet-sensitive is expanding, so it took more than a year to develop the low-calorie beer formula. In brand communication, Wright emphasizes low calories, does not feel bloated after drinking, and the taste is still good. Its advertising slogan is called "All your dreams about beer are in Wright."

Old Wimberton focuses on high-end consumers.

It is a franchise for a high-end German beer acquired by Miller. In the advertisement of Old Wimber, a group of yuppies with straight suits and extraordinary temperament raised their glasses to drink together. The advertisement advocated: "Come and drink Old Wimber tonight."

This brand portfolio strategy helped Miller achieve great success throughout the 1970s. By 1980, Miller's market share had reached 21.1%, with a total sales revenue of US$2.6 billion, and was praised by consumers as "Century Taste".

3. Price level separation

The last method of separation is price level. Different brands set different price ranges to create different image levels.

Generally speaking, companies will choose a two-stage layout: one popular brand and the other high-end brand. However, some companies will choose a three-stage layout: high-end brand, mid-range brand, and low-end brand, but in this way, the price bands will easily overlap between the two brands.

Because in the process of operation, in order to achieve development and growth, a brand will always expand the price band upward and downward to cover a larger market and more people, which can almost be said to be a commercial instinct.

For example, under OPPO, there were originally two mobile phone brands: OPPO and Realme. OPPO focuses on mainstream markets and high-end markets, while Realme takes the cost-effective route to attract young users and mainly sells them online.

However, in June 2021, OPPO merged OnePlus mobile phones. At this time, OPPO's brand structure in the mobile phone sector became a three-stage layout of upper, middle and lower. The OnePlus brand immediately faced the upper and lower attacks from OPPO and Realme, and the price band was fully covered.

In particular, OnePlus also needs to share Hasselblad’s strategic imaging cooperation resources with OPPO, which has more overlaps with the OPPO brand. At this time, OPPO company must re-adjust the strategic layout of the three brands.

Judging from the adjustment results, the OPPO brand is now developing towards the high-end, with resources and energy tilting towards the two product series Find N and Find X, focusing on image and folding. The Ace series products originally belonged to OPPO and have millions of users are handed over to OnePlus for operation.

OnePlus brand focuses on the performance track, improves product strength in the direction of game customization and independent optimization, and creates high-performance, high-endurance, good heat dissipation and ultimately smooth mobile phone products for users. OnePlus has been streamlined into two product series: the "Elegant and powerful performance flagship" digital series, and the "Shaped and material performance ace" Ace series.

Realme's flagship products have changed from the original GT series to the GT NEO series. The overall price band is slightly migrating downward, focusing on young users and the cheap market, and trying to avoid repeated competition with OnePlus' Ace series and OPPO's RENO series.

In fact, in the future, OPPO brands should also cut off the K series and A series mobile phones priced at 1,000 yuan, which will not only help the brand further enhance its image and develop towards the high-end; it will also reduce the overlap with OnePlus and Realme.

In addition to these three ways of separation, some companies try to distinguish them with brand tone and style, but the style is relatively vague and it is difficult to form clear boundaries.

For example, a company has two sports brands, one is defined as a professional sports brand and the other takes a fashionable sports route, which is not a good distinction. Because professional sports brands need to attract consumers, and their product styles must also be fashionable and design-oriented. Fashion sports brands are in the sports industry and must always have some professional products, which can easily blur the boundaries between the two brands.

I used to serve a liquor company. The customer defined its two brands as one taking the masculine route and endorsing tough male stars; the other taking the pure soft route and endorsing female stars. However, its target consumers are all men, so it is not a difference between the target population, but a difference in brand style.

It is difficult for consumers to accurately perceive this style difference, and the product attributes of the two brands are close, the price bands overlap, and the channels are shared, so fights often occur.

Later, we had to separate the price level again, one became a popular brand and the other became a high-end brand. However, because of the dispersed resources, neither brand was done well. In the end, the customer removed the independence of one of the brands and turned it into a product series under the other brand.

4. Independent brand team

In addition to forming distinctions in brand strategy, it is actually necessary to form distinctions in organizational structure. Each brand must have an independent operation team and formulate a separate brand strategy.

When talking about this topic, we will talk about P&G’s pioneering contribution to the marketing industry: the brand manager system.

In 1879, Procter & Gamble began to sell the soap product "ivory soap" and made a fortune. P&G, which tasted the sweetness, launched a new soap brand, Jiamei, in 1923, but the development of the new brand has not improved, far from achieving the expected results.

To reverse this unfavorable sales situation, a young man named Neil McElroy was appointed to take charge. Neil McElroy's marketing activities were too fragmented, lacked coordination, and had a chaotic budget to grasp the focus of management.

Fundamentally, this is because Jiamei and ivory soap belong to the same category and competitive products within the company. Jiamei's advertising and marketing strategy is too similar to ivory soap, and the same team is responsible for advertising and sales. This can easily lead to a loss of attention to customers and hinder the development of new brands.

Therefore, Neil wrote a memorandum to submit it to the company, proposing the idea of ​​" one person is responsible for one brand ", establishing a brand-centered management system, and each brand should be able to compete fiercely with other brands within the company (including competing for market share and internal company resources).

Subsequently, in 1931, Procter & Gamble launched the brand manager system . A brand appointed a brand manager, and he led a dedicated team to be responsible for the operation of a brand. The authority of a brand manager spans the entire process of the brand research, product development, packaging design, advertising production, promotion and promotion, and all related marketing affairs.

Neil was appointed as the brand manager of Jiamei, and Procter & Gamble also hired an independent advertising agency for Jiamei, and Jiamei's performance improved rapidly.

With the system where brand managers are fully responsible for brand management, Procter & Gamble encourages healthy competition within the company, and turns its employees into entrepreneurs who help the company build a brand, enhancing employee morale. P&G has thus begun to lead the market and has made great achievements in the market, widening the gap with its competitors, and gradually growing into an industry giant. Products printed with the P&G logo are spread all over the world.

This initiative by Procter & Gamble has also become a classic teaching case at Harvard Business School. Neil McElroy became the president of Procter & Gamble in 1948 for his outstanding performance and served as the US Secretary of Defense after resigning. His 3-page memorandum has also become one of the sacred texts of the marketing industry.

Through the brand manager system, independent operation teams are set up for different brands, match different market strategies and separate management executions, and create a multi-brand management system, becoming the common brand management rule today. Today, the product manager praised by the Internet industry, a product manager is responsible for a product, and its concept actually comes from the brand manager system.

5. How to coordinate management and achieve coordination between different brands?

In addition to different brands, synergy is also necessary. At this time, enterprises need to implement coordinated management of all brands, find the strategic focus of brand management, distinguish the primary and secondary, and focus on it. On this basis, synergy effects are exerted.

1. Coordinate management

When a company has multiple different brands, a question that has to be answered is how each brand allocates corporate resources and marketing expenses.

At this time, companies need to coordinate the operation of all brands and distinguish which brands are strategic brands, strategic investment, and which brands are tactical brands, just to find market opportunities and block competitors.

For example, Coca-Cola. For Coca-Cola, although the brand of Coca-Cola is extremely strong, carbonated beverages have shown a decline in the entire beverage market, and consumers' health awareness has continued to increase. Emerging markets such as sugar-free sparkling water, tea beverages, NFC juice, energy beverages, and coffee beverages are thriving. Therefore, Coca-Cola also needs to continuously create new beverage brands.

The new brand management strategy proposed by Coca-Cola is called " Dragon and Rabbit ".

Long is the core brand that undertakes the main sales volume and main market, such as Coca-Cola and Sprite; while Rabbit is an innovative brand that fills the market segmentation space and follows consumption trends, such as Yiquan, Chunchashe, Yucha, Coarse Grain King, Chunyue Fruit Shui in the Chinese market [2].

The dragon is very powerful, has strong combat power, and has a long vitality; while the rabbit is flexible and changeable. What’s more important is that the rabbit has amazing reproductive ability and population size.

This metaphor is very vivid and also helps Coca-Cola distinguish the market strategic goals of the two types of brands. The real "dragon and rabbit" is not simply a division of big brands and small brands, but a "dragon" is used to support the development of the enterprise and develop various abilities and a complete system of incubating the "rabbit" brand, including innovation capabilities, supply chain capabilities, brand management capabilities, etc., so as to keep these "rabbits" able to survive as much as possible and grow rapidly.

Another example is Xiaomi’s brand management system, which I call it the “ digital center ” strategy.

In addition to a number of ecological chain brands, Xiaomi has three main brands: Xiaomi, Redmi and Mijia.

Xiaomi's product line includes mobile phones, laptops, tablets, smart watches, wireless headphones, smart speakers, TVs, routers, etc. Redmi's product line is similar to Xiaomi, basically as a low-end version of Xiaomi, and is a cheap brand of Xiaomi.

The Mijia brand's product line is even more abundant, from refrigerators, air conditioners, washing machines, smart rice cookers, air fryers, air purifiers, and sweeping robots to household goods such as thermos cups, sunglasses, showers, wiring boards, smart fish tanks, etc.

From this product line division, we can see that Xiaomi brand products can play the role of artificial intelligence center in smart life, while the Mijia brand is defined as "Internet of Things", and its products are just an interface and application end in smart life and smart home.

This brand management system is also in line with the entire Xiaomi Group's "AIoT" development strategy. Xiaomi undertakes "AI" and Mijia undertakes "IoT".

Once you understand it, you will understand why both home appliances are called Xiaomi TV, while refrigerators and washing machines belong to the Mijia brand. Because TVs are obviously the "digital center", they can become digital entertainment centers for homes in the future, while refrigerators and washing machines are the "Internet of Things".

After clarifying the brand system of "Xiaomi + Mijia", Xiaomi has also made a lot of adjustments to the use of the brand and the ownership of the product line.

For example, the air purifier product was first launched using the Xiaomi brand, but now it has become the Mijia brand.

What is still under adjustment is air conditioning. When the air conditioning product was first launched, it was "Xiaomi Air Conditioning". Currently, "Xiaomi Air Conditioning" and "Mijia Air Conditioning" coexist, but I think this is just a transition, and there may be only "Mijia Air Conditioning" in the future. Obviously, air conditioning is just the Internet of Things, not the digital center.

For example, Xiaomi's current heavy investment in the automotive business, I think after Xiaomi's automotive products are launched, the brand is likely to be "MiCar", because automobiles, as the third living space outside home and office, can obviously play a digital central role. Moreover, now the interconnection of car machines and remote control of smart home appliances with cars has become the mainstream in the industry.

Unless Xiaomi is determined to build a super luxury car brand and the main brand of "Xiaomi" cannot endorse it, it will only consider using a new brand.

From Coca-Cola's "Dragon and Rabbit" and Xiaomi's "Digital Center", we can see the primary and secondary logic and strategic focus behind brand management.

A truly powerful brand management system, I would like to call it a galaxy strategy. In a complete and stable galaxy, there should be stars, planets, and satellites

Xingxing is the most core brand of a company, the main product brand or corporate brand.

In the minds of consumers, it represents the strength, quality and reputation of the enterprise, and represents the strong management capabilities, core technologies and resources behind the enterprise's brands. It is the main axis of the enterprise, the center of planets orbiting, and provides light and heat to the planets.

Planet represents many product brands under the company.

Each planet must have its own orbit and does not conflict with each other. If the orbits overlap, there is a risk of collision. Each planet must also have its own planetary style and life ecology, find its own starry sky, set it for different target groups and market segments, and create its own independent value connotation and image personality.

Satellites are sub-brands and sub-brands derived from planets.

They operate around a planet, with the goal of filling market gaps and making up for the lack of coverage of the main brand, or attacking and defending against competitors, enriching the main brand's ecosystem.

Stars represent the basic plate and main source of growth of an enterprise, and strategic investment is required. Planets represent the innovation and new growth potential of an enterprise, and they need to selectively make strategic investments after comprehensive judgment. Satellites are tactical behaviors, and do not make key investments, and take the opportunistic route.

2. Strategic Synergy

From the perspective of the enterprise, collaboration is first and foremost a resource collaboration.

Can different brands share raw materials, production lines, and R&D personnel in production, and whether they share channels and sales teams in sales, thus creating synergistic effects.

Bawang Shampoo launches Bawang Herbal Tea, from the perspective of corporate decision-making, is to share the raw materials and supply chains of traditional Chinese medicinal materials. General Mill, the world's 9th fast-moving consumer goods giant, has two major brands: Wan Chai Wharf and Haagen-Dazs. This is to share cold chain resources, selling ice cream in summer and frozen dumplings in winter. Zhong Xuegao, the cold drink company, launched the fast-frozen brand Li Xiangguo, which is the same logic.

This synergistic effect also includes extending to the upstream and downstream of the industrial chain, such as BYD producing both batteries and electric vehicles. Samsung makes both mobile phones and develops its own chips and screens.

Therefore, it can be said that companies can have multiple brands, but they cannot blindly diversify. The industries with diversified businesses should not be dispersed, otherwise they will lose their resource coordination.

From the perspective of the outside of the enterprise, collaboration is ultimately collaboration in the scenario.

Different brands should be in the same life scenario as possible for consumers, so as to create a consistent brand experience for consumers and establish a brand ecosystem.

For example, P&G’s strategy is to focus on the scene of one square meter of the customer’s bathroom. What products will appear in the customer’s bathroom, and P&G will produce and sell what products it will produce and sell.

Since 2005, P&G has been continuously divesting its food brands and pet care brands, cutting and selling nearly 100 brands. In 2012, P&G also sold its 40-year-old well-known potato chip brand Pinke to Kellogg, completely divesting its food business.

Finally, P&G has completely focused on personal care, cleaning and cosmetics businesses, locking the bathroom core scenario, and all brands are developing in this scenario. Similar strategies include the one-square-meter cashier of Wrigley Candy. Wrigley only produces products that can be placed on supermarket cashiers.

Focus and diversity are sometimes a pair of contradictions. In order to expand scale and grow, enterprises require diversification, but without strategic focus, they will lose the core competitiveness of the enterprise and become a paper tiger with strong outside and hard on the outside. Therefore, the strategy requires focusing on the scene and realizing resource coordination in the scene.

The failure of diversification of many companies is that they have no resource coordination or scenario coordination. For example, Evergrande Real Estate, Evergrande Automobile, Evergrande Ice Spring, and Evergrande Agriculture and Animal Husbandry are typical of neither being in the same consumption scenario nor being able to produce synergistic effects in production and R&D.

Notes to this article:

[1] David Aker, "Brand Portfolio Strategy", Machinery Industry Press, 2020-9;

[2] Food Business Network "Coca-Cola's Ambition: There is no unconquerable market, only giants who don't want to turn around", 2019-02-12, original text: https://news.21food.cn/59/2837712.html.

Author: Husband

Source: WeChat public account "Empty Hand (ID: firesteal13)"