Sub-Branding
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This document discusses brand extensions and sub-branding. It defines line extensions as extensions within the same category, while category extensions move into a new category. Strong parent brands often lead to strong extensions. The document uses the example of Barefoot & Pregnant, a training brand for hotels, extending into virtual training for day spas. While extensions leverage parent brand equity, they can also damage the parent brand if poorly executed. The document argues that sub-branding, using a new brand name tied to the parent, can help extensions grow new market segments without risking the parent brand.
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Sub-Branding
- 1. Assignment #3 Brand Management Marketing 325 By: Elizabeth Kulin June 2009 PARENT BRAND BRAND EXTENSION BRAND EXTENSION BRAND EXTENSION
Editor's Notes
- When a company with an established business creates a new product or service they strategically decide on its brand position within the portfolio. A new brand can stand independently, dependently, or as a combination, of its parent brand. Extensions can leverage the brand equity of the parent brand to increase chance of success As Barry Silverstein quotes in the Brandchannle.com article, Brand Extensions: Risk and Rewards, “If the brand itself isn’t strong, the brand extension is likely to be weak.”
- For example, Procter & Gamble’s Crest brand has 12 different types of toothpaste, ranging from cavity protection to sensitive teeth and whitening. In this case, the line type extensions are able to leverage from the parent brand’s equity among consumers while also attempting to increase growth within the target market (people who buy toothpaste). Additionally, Proctor & Gamble’s Crest brand has developed category extensions as well. For example they sell “Crest” mouthwash and floss. In this case, the products are still able to associate with the parent brand name, however by extending into a new category, a different consumer market is the target audience (people who buy floss and mouthwash).
- Barefoot & Pregnant is a training service for businesses in the spa industry. The training allows spa businesses to add a new service offering, and consumer segment (expecting mothers), to their portfolio. The company is planning a brand extension that will incorporate their training service to virtual tools (rather than live interaction). In the textbook, Strategic Brand Management by Kevin Lane Keller, marketer Edward Tauber introduces and describes 7 strategies for establishing a brand extension. The first strategy is to develop a brand extension which offers the same product or service as the parent brand however, in a different form. This strategy is the most fitting for the Barefoot & Pregnant’s virtual training brand extension. The service offer itself will continue to be training spa employees about how to cater to expecting mothers, but it will simply be delivered in a different package.
- It is possible that the new brand will become successful, soon after market introduction. The parent brand is already known in the spa industry, and it has an established brand image of positive strong associations. This brand equity could naturally transfer onto the new brand, in the target audiences minds. However, in order for this success to sustain the new brand’s quality, consumer benefits, and value offering must actually be similar to the parent brand. Another advantage that this extension could benefit from is that it will allow Barefoot & Pregnant to penetrate into a new segment of their target audience - the spa industry. This type of market coverage growth could lead to increased brand awareness and sales for the company.
- The Barefoot & Pregnant parent brand resides within the luxury hotel market. Their partnership reflects onto the luxury hotel’s brand image. By creating a new brand, and developing a new, less upscale, target market segment, the Barefoot & Pregnant brand will develop new associations. These new associations may be unfavorable for the luxury hotels. This could create risk for Barefoot & Pregnant. The luxury hotels may, in the future, choose to partner with a competitor whom only works with 5-star quality luxury businesses. Another disadvantage is cannibalization of the parent brand. Market Metrix report of The Leading Hotels of the World, reported that, “the escalating recession is causing serious problems for many hotels and for luxury hotels in particular”. It also stated that luxury hotels are looking for ways to cut costs. Therefore, there could be a potential risk that the luxury hotels switch their Barefoot & Pregnant service choice, from the live training program, to virtual. This would negatively affect the sales of the parent brand.
- A solution to avoiding these potential risks, and benefiting from brand extension advantages, could be to position the new brand as a sub-brand. Harvard Business review on brand management defines a sub-brand as, “A brand with its own name that uses the name of its parent brand in some capacity to bolster equity”. For example, Apple’s ipod shuffle is a sub-brand of its ipod product. The shuffle offers the same service to is consumers – digital music in a small and portable package. The shuffle is viewed by consumers to incorporate similar brand quality as the ipod because it shares the the same name. Thus, it is leveraging the parent brand and also transferring the parent brand equity onto its own image. At the same time, the name portrays that this new product is different from the ipod. Consumers understand that its attributes are different – it has less digital features, holders fewer songs, and is less expensive. On one hand, this has allowed Apple to penetrate a new segment of the target audience (people who listen to music on the go) who could not afford to purchase an ipod before, but it has also created a separation within the target audience itself. Consumers understand that there are differences between the two products and different target segments for each. Thus, a potential consumer of the ipod would rarely purchases an ipod shuffle.
- A few examples of how Barefoot & Pregnant could do this is by extending its parent brand name by adding a descriptive word. By creating a name that includes both, the old and the new, Barefoot & Pregnant will portray that this new brand is an operation within its existing business, and that it will provide similar style, quality and approach. At the same time it will also also allow consumers to understand that this new brand is somehow different.
- These names include the parent brand, and thus allow the sub-brand to associate with, and leverage from, its established brand equity – awareness and image - in the market place. This transfer could also occur at the level of the new target segment (day spas). After all, by becoming certified and associated with Barefoot & Pregnant, not only do their service offerings advance, but their own brand equity in the market place as well. Thus, the new partnerships with day spas should not damage the parent brand’s image. This combination name also portrays a separation from the parent brand. The additional word to the brand name can offer description about the new brand’s position, purpose, and appropriate target segment. Thus, the new brand can attract the new segment in the target audience, day spas, while also creating an understanding that it caters specifically towards a certain type of spa in the industry as well. In other words, it could create an understanding that a 5-star luxury hotel spa would not want to option for the sub-brand, when there is a higher service level available. Thus, the parent brand will be protected from cannibalization.