Multi brand strategy

Multi brand strategy
See also


Multi brand strategy is one of a marketing techniques for two or more similar products from one firm but under different and unrelated brands. The idea of Multi brand strategy is to restrict or end the competition and increase the market share.

Main definition[edit]

Steven Hillestad wrote in his book that "The multibranding strategy minimizes risk to the parent organization"[1].

"Multibrand strategy permits finer segmantation of the market, with each brand name suggesting different functions or benefits appealing to different buying motives of different customer segments" [2].

The huge thing about Multibranding is that each brand can obtain only a small market share, and not all can be very profitable. The company have to spread a lot off recources over many brands instead building a few brands to a highly profitable level [3].

Multibranding's mission[edit]

Primary objective of this is to secure more shelf/display as well as a broader customer base in retail outlets.

Following the assumption if firm wich has two or more brands would sell more than with a single brand and so on to any number of brands, the idea strengthened by the knowledge that every item the company sells, competitors sell one less [4].

Advantages and Disadvantages of Multibranding[edit]

The main advanteges are [5]:

  • The Multi Brand Strategy is very usefull for brand "switchers" companies, which are keeping on changing brands to trying different products, because having a large product line and multi-brand gives a very big chance, that even after switching the brands, the customer is still associated with the company.
  • Successes of initial business ensure that the company can now venture into developing another brand with the profits of the first brand or through the way of franchising.

But also here is the main disadvantage [6]:

  • The biggest disadvantage of a Multi Brand strategy is that the company’s image may become that of not customer oriented but profit oriented and ofcourse this can damage the reputation of the company in long run.

Multibranding in life[edit]

A lot of corporations run Multi brand strategy since they have distant brands running in the market on the same time. Here are a few examples:

  • BMW: BMW, Rolls Royce, Mini Cooper;
  • Adobe: Adobe Photoshop, Adobe Illustrator, Adobe Lightroom, Adobe Stock;
  • LVMH: Louis Vuitton, Givenchy, Guerlain, Moët & Chandon, Hennessy and others.

Footnotes[edit]

  1. Hillestad S., 2004, p.171
  2. Kotler P., 2008, p.532
  3. Kotler P., 2015, p.306
  4. Pando C. Papantoniou,1992, s.144
  5. www.marketing91.com
  6. www.marketing91.com

References[edit]

Author: Valentyna Ilyina