Page 155 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes just offering one or two fragmented items. The company focuses on promoting only the main
brand concept that builds and reinforces all related items without incurring much additional
expenditures. The company can also extend brand without much investment in promotion. The
negative side is that success and ease sometimes tempts a company to over extend and weaken
the brand.

Range Branding Strategy

This strategy seems to resemble line branding but is significantly different. It is also called
brand extension. Product categories are different but brand name is the same.

Example: Maggi is a range of different products: noodles, sauce, soup, Dosa mixes, etc.
The range represents the area of expertise, which is fast food.
In line branding, every product originates from the “product concept.” Lakmé concept is “the
source of radiant beauty,” and all products surround this core product concept. Line branding is
restrictive to brand expansion into products that do not surround this core product concept and
complement each other in this regard. In case of range branding, it is not the product concept but
“the area of expertise.” This strategy permits expanding into products that do not complement
each other.

Example: A company’s area of competence might be microprocessors and it can develop
expertise in some other area over time such as software and expand its brand. Himalaya Drug
Company has range of Ayurvedic home remedies like Health Care, Body Care, Skincare, Hair
Care, etc., under Ayurvedic Concepts. Certainly, deep cleansing lotion does not complement
digestive capsules, and antiseptic cream does not complement face wash. The focus is on expertise.
Himalaya Drug Company’s area of expertise is ‘Ayurvedic medicines’ and it can use its expertise
to expand the brand to products that do not complement each other.

This means range branding covers many different products under one brand banner. Promotional
expenditures are low because promoting one brand helps all products in the range. However,
the same brand name for too many products may lead to overstretching, may confuse consumers
and weaken the brand.

Umbrella Branding Strategy

In general, umbrella branding is favoured among Eastern World companies but is not exclusively
confined only to this part of the world. Giants like GE and Philips are examples of non-Eastern
companies that use umbrella branding. The approach is driven by economic considerations. The
company name itself is the brand name for all products across diverse categories. Investment in
building one brand proves far more economical than investing in building several brands. The
brand transfers the advantages of brand awareness, its associations, and goodwill. Ever increasing
number of brands, and information overload makes it a very difficult to get noticed. Consumers
are more likely to take notice of something familiar.

Example: Samsung, Sony, Amul, Nivea, etc. are examples of umbrella brands.
Apparently, umbrella branding appears to be flawless, but it has several disadvantages. A major
shortcoming with this approach is that it is not customer or market focussed. Cost advantage
does not get translated into better margins. It is a low-cost strategy but earnings are also low.
Research indicates that average profit of top Eastern companies adopting umbrella branding is
much lower as compared to top Western firms.

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