Is also known as family branding
represents a marketing practice which involves selling many related products under a single brand
It involves creating huge brand equity for a single brand
To enhance marketability of products:
It follows the psychological concept that any product that carriers the same brand name is
produced using the same high standards of quality.
So a brand may have 10 product lines, but the trust on that brand, leverages the attributes of all the
10 product lines
Factors that may determine the impact of umbrella branding include:
The degree of commonality among the products falling under the corporate umbrella
E.g. Whether the products may act as substitutes for each other.
The brand equity of a corporation
E.g. Whether the brand is known in its product market.
To explain a consumer's decisions and judgements during product purchasing that cause umbrella
branding to be a successful marketing strategy.
1. Categorization theory
2. Schema congruity theory
3. Confirmation bias
Based upon the notion that consumers tend to categorize products by associating them to brands
and their past experiences with those particular brands (stored in their category memory) in order to
evade the initial confusion caused by the extensive choice of products.
E.g.: if Apple Inc. would develop and sell a new version of a Macbook, consumers would deem it
more reliable and potentially of superior quality rather than if Apple would produce a new beverage
due to Apple's past product line.
Schema congruity theory
Schemas are a human's personal cognitive representations of the environment that guide their
perceptions, thoughts and actions.
Schemas go through constant changes as a human experiences and learns new information.
The schema congruity theory places more emphasis on the consumer's past experiences with the
brand rather than the general brand equity, which is influenced by the surrounding environment.
Form of statistical bias, describing the tendency to seek for or interpret evidence in ways that
support one's existing beliefs.
After a consumer creates a preference of one brand over others, any additional feature that may be
common between various brands will most likely only strengthen the consumer's pre-existing
preference, causing them to disregard other brands.
Hence, a positive brand equity may not be as influential if a consumer already has a pre-existing
Example: Successful Umbrella branding
Apple Inc. is an American multinational technology corporation that develops and sells a range of consumer
electronic goods and services.
The original brand of the Apple company has been the Mac computers, and hence it is at the apex of the
Umbrella. But, then the umbrella divides further into the Ipad, Iphone and others to cover all the other
products within the umbrella.
The rising brand image of the parent brand due to increase in number of products, and assuming that it
maintains the quality, can represent a powerful competitive advantage especially in competitive markets.
Another great advantage of this marketing practice is that once a well-known brand wants to introduce
another product, there will be no cost required for brand creation. Therefore, new product launch becomes
easier and cheaper as it can find already available recognition and market set up.
Example: Umbrella brand failure
Maggi, the flagship product of Nestle, recently bombed across India and several other countries
because of its high lead content. What has happened is, besides Maggi, many other brands of
Nestle has taken a hit.
As Nestle is an umbrella brand, there was negativity against all individual products of the brand. It
can affect all the products together.
Cannibalisation (reduction in sales volume due to the introduction of a new product by the same
company) may result when related products are introduced under the same corporate brand as
internal product competition will lead to consumers choosing between products from the same
brand, stunting future investment into product creation of the same product line under the
Umbrella branding is a concept of “All for one, and one for all”.
Attracting new customers and getting higher sales volume requires the addition of new customers as
well as the increase in the repeat purchase rate. The best way to increase the bottom line is to increase
the brand loyalty amongst customers.