Thursday, March 15, 2012

Multi-brand Strategy

Multi-brand strategy
Definition
Marketing of two or more similar and competing products by the same firm under different and unrelated brands. While these brands eat into each others' sales (see cannibalism), multi-brand strategy does have some advantages as a means of (1) obtaining greater shelf space and leaving little for competitors' products, (2) saturating a market by filling all price and quality gaps, (3) catering to brand-switchers users who like to experiment with different brands, and (4) keeping the firm's managers on their toes by generating internal competition.
Resources: http://www.businessdictionary.com/definition/multi-brand-strategy.html

Second Brand Strategy
A second brand strategy is where a company with an existing brand (or brands) finds another segment of the market to address with a different brand proposition.
Resources:http://www.brandequitymagazine.com

Multi Brand Strategy
Many companies opt for Multi Brand Strategy in order to generate economies of scale by using the basic advantages of the strategy. But it cannot be denied that Multi Brand Strategy can fail due to poor management and due to adoption of unprofitable business models.

Multi Brand Strategy refers to a marketing strategy under which two or more than two similar products of a firm are marketed under Different Brand names. In most of the cases, these products are competing ones and are marketed under the Brand Names which are completely unrelated.

Several companies take up this Multi Brand Strategy, as the strategy offers some advantages:
  • First of all, by adopting Multi Brand Strategy, a company can obtain greater space in the market, where little space is left for the competitor business houses.
  • Secondly, by promoting similar products under different Brand Names, a company can fill up the Price Gaps and Quality Gaps of the target market. In this way, the market can become saturated with the similar products of the same company.
In every market, there are some customers who frequently change brands in order to experiment with products of different brands. By adopting the trick of Multi Brand Strategy, a company can serve effectively to these Brand Switchers.

When a company undertakes Multi Brand Strategy, the managers of the company are bound to operate efficiently as internal competition is generated at a high degree.

The decision of a company in adopting Multi Brand Strategy, depends on the success of the initial brand. If the initial brand becomes successful, then through franchising and retailing, a company can develop a second brand without generating much expense. The Franchises can promote both the primary and secondary brand through same advertisement. The marketing department of the company, can market the different multi brand products just in the way an agency works for multiple clients. All these advantages of Multi Brand Strategy can generate economies of scale.

But, it should be mentioned here that, in spite of all the advantages of Multi Brand Strategy, there are risks too which can challenge the success of this kind of strategy. It has been observed that, in most of the cases, Multi Brand Strategy fail because of poor management and wrong choice of business model.
Resources: http://finance.mapsofworld.com/brand/strategy/multi.html

Contoh:
  • United Bike, Genio Bike, StarBike
  • CocoLatte, BabyDoes, Crater
  • BabyElle, Pliko, Creative Baby
  • Fold-X, Elemen, Laux

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