From Marriott to Amazon to Nestlé to Google to Apple to Unilever to LG to Neutrogena Source-Branded Portfolios are increasing in importance. With a shared common, source of credibility, individual brands can focus on developing and strengthening their specialness. In a highly competitive, highly fractionated, fast-paced environment, resources are better often better spent behind Source-Branded Portfolios than behind a disparate portfolio of unaffiliated brands.
A Source-Brand invests in each individual brand with its authority. This allows the individual brands to focus on their relevant differentiation, appealing to particular customer needs for particular situations. A Source-Branded Portfolio enhances the reputation of individual brands. Source-Branding increases marketing productivity encouraging cross-selling and enhancing the efficiency of the individual brand communications.
Disney has a strong Corporate Brand that imbues each of its brands with its heritage of being a magical place for creating happiness. Disney Cruises, Disney Hotels and Resorts, Disney stores are all embraced by the Disney Corporate Brand’s purpose.
Brands do not exist in a vacuum: A Source-Brand represents an authentic heritage of expertise and credibility, contributing common character, values, purpose, and principles to the brands in the portfolio. The Source-Brand also provides a source of trust and confidence across the portfolio. A strong Source-Brand reduces customer-perceived risk.
A Corporate Branded Portfolio increases the opportunities for cross-purchase among the brands within the portfolio. As cross-purchasing within a portfolio increases, so does profitability. Research by Kumar and Reinartz indicates increased profitability from cross-purchases from a common Source-Brand, in this case a Corporate Brand. People using more brands within a Corporate Branded Portfolio are more loyal than those who limit purchases to just one brand.
For example, someone purchasing six (individual) brands one time each is more loyal to the portfolio than someone using a single (individual) brand six times. Using more than one brand in the Corporate Branded Portfolio: 1) increases revenue contribution for the corporation; 2) increases the duration of the relationship with the branded portfolio; and, 3) increases engagement with the Corporate Brand. This multiple-brand behavior increases the importance of the Corporate Brand’s loyalty program, as the program provides trustworthy access to the entire Corporate Branded Portfolio, encouraging easier, more confident, personalized, less risky decision-making.
Given the number of Corporate Brand stakeholders – customers, franchisees, employees, shareholders, the financial community, media, local community, opinion leaders, suppliers, online influencers, bloggers, vloggers, and celebrity personalities – it is more important than ever before to build a consistent, powerful Corporate Brand.
A brand is a promise of a relevant, differentiated experience. However, today there is increased skepticism in society. In more and more situations around the world, credibility is under attack. Trust in institutions… education, medicine, business, religion, politics, marketing… is in decline. Building trust for individual brands is expensive and takes time. Inheriting a strong, authentic, authoritative source with a trustworthy reputation is a competitive advantage.
In many cases the Corporate brand is the Source Brand. This is especially true in Business-to-Business relationships, the trusted authority of a Corporate Brand influences customer preference.
The Corporate Brand is a value creation advantage, generating customer value by facilitating productive, profitable relationships, locally and around the globe. The interdependent relationships of a Corporate Brands and its individual products, services and brands are value creating. In Business-to-Business situations, a strong Corporate Brand is a hedge against uncertainty. Even if one of the brands in the Corporate Branded Portfolio is new or less known, the Corporate Brand can deliver the standards and integrity that help customers feel confident.
Marriott shares its corporate source credibility with many of its hotels providing the Marriott imprimatur to Springfield suites, Protea, Courtyard, AC Hotels, TownePlace Suites, Residence Inn, Fairfield Inn, Marriott Vacation Club, JW Marriott, and Delta hotels. Each of these brands focuses on building its own individual relevance and differentiation while each hotel also derives expertise and authority from Marriott. Virgin provides the energy, excitement, dependability, and irreverent humor to Virgin Atlantic, Virgin Mobile, Virgin Earth, and other brands. Unilever’s “U” on all its brands reminds customers of its mission to make sustainable living commonplace. Every purchase is a way to participate in this corporate mission.
As never before, people care about the corporation behind the product or service promise. They care about the source of the promise. Why should a customer trust the claim? On what authority is this claim based? Moving from an assemblage of individual, disconnected brands to a coherent collection of brands sharing a common source of credibility increases the strength of the individual brand promises. A portfolio of relevant and differentiated individual brands supported by a strong source-brand leads to increased customer loyalty and sustainable profitable growth.
Contributed to Branding Strategy Insider by: Larry Light, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
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