Corporate brand isn’t a new concept, but the way corporations are handling their brand is. For large companies, until recently, brand has been mostly about building an aura around the products, while scarcely mentioning the larger corporation behind them. Think Procter & Gamble or Unilever. With increasing frequency, however, companies today are consolidating their house of brands into a branded house, making early adopters of this strategy like Virgin seem downright prophetic.
Why is this happening
There’s an intersection of factors causing the old model to fade into obsolescence. The first factor is the democratization of information. Technology has enabled ever more people to access any information they choose. It only takes a few seconds on google for someone to see the Unilever behind their Ben & Jerry’s ice cream or the P&G behind their Crest toothpaste. Increasingly, consumers want to know who they are doing business with, and if it only takes 10 minutes of googling, then count on consumers being more aware. This awareness necessitates a more comprehensive brand around the company, as opposed to the old model of a brand around the product itself.
The second reason for the change has a lot to do with digital transformation. An unexpected result of this new paradigm of brand is that it dramatically increases the cost of management of each brand. Hundreds of brands within a portfolio may have meant hundreds of different campaigns in the past. Today, hundreds of brands mean 1000s of social channels, each with their own assets, content calendars, and strategies. This shift has caused companies with extensive brand architectures to look for greater efficiencies through consolidation.
The last reason I’ll discuss here is the role that acquisition plays in making brands increasingly difficult to manage. As consumers look for more connected and involved relationships with brands, integrating these brands into a broader brand architecture becomes costly in terms of effort and dollars, but even more so in terms of brand equity. The gains made from integration pale in comparison to what company’s stand to lose in nuanced connections and relationships that took time to cultivate.
What companies are doing
The combination of these factors is leading corporate brands to greater prominence in the everyday life of the consumer. This prominence is giving way to new opportunities to showcase brand values, galvanize customer relationships, and build brand equity. Category leaders like Apple have long focused on the advertising of the company, over a focus on particular products, and most challengers have taken notice and followed suit.
Rather than trying to integrate the different entities, companies are focusing on the connection between the brands. Unilever remains a house of brands but has recently brought its corporate brand from the shadows, leveraging the common equity of its portfolio to build confidence in the parent brand. Similarly, Marriott is shifting the focus from the individual brands in their extensive portfolio to the network they form by deploying a rewards program that spans their different assets.
Each of these examples is ultimately achieving the same result. Large corporate brands can reduce costs and strengthen brand equity by consolidating and focusing the power of their brands. Paired with new strategies around leveraging the relationship between brands, this makes integration of diverse and dynamic portfolios less turbulent and more cost-effective.
What you can do
Managing these networks of brands, versus a house brands, necessitates a deeper level of cross-asset coordination, as well as cross-functional collaboration across organizations, and more frequent assessment of brand strategy for both opportunities and threats. It means that brand strategy plays a more profound role in overall strategic planning, and demands more frequent consultation to assure consistency of expression and persistent alignment.
However, the dynamic nature of this approach allows giant brands to capitalize on the agility of their subsidiaries. This interdependent strategy enables companies to develop a more adaptive and flexible brand expression that is still consistent and authentic across every touchpoint of the customer experience. This shift in priorities is proving well worth it for many corporate brands that have already adopted the paradigm of the new era.
