Branding Strategy Essay

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 The disadvantages of brand extension strategies (1). Damage to the original brand image. When a certain type of product on the market ahead of the status, the brand has become a strong brand, in the minds of consumers will have a special image orientation, or even become a synonym for such products. This will be a strong brand extension, as proximate cause of (that is the last impression on people’s awareness of a more profound impact on the role of) the existence, it is possible to play a strong brand image consolidate or weaken the role. If the improper use of the brand extension, the original strong brand image represented by the information was weakening. 2).  Runs counter to consumer sentiment. A brand for the success of the process, the consumer is shaped by the corporate brand-specific functions, such as the quality of the psychological characteristics of specific targeting process. The strength of enterprises and brand extension to or incompatible with the original market has nothing to do with the products, on the contrary the psychological orientation of consumers. Such as â€Å"999† was originally Wei Yao in the well-known brands, â€Å"999† extend to beer, consumers will be difficult to accept. The brand extension of such misconduct, not only the effectiveness, but it will also affect the original strong consumer brands in the eyes of the specific psychological orientation. (3). Cixiaobichang easily form the â€Å"seesaw† phenomenon. When a name on behalf of two or more of a difference in the product, consumers will inevitably lead to fuzzy understanding of the products. When the extension of branded products in market competition at the absolute superiority, consumers will be the strength of the original brand positioning transferred to the psychological extension of the brand. Thus, in effect weakened the strength of the brand advantage. This extension of the strong brands and brand competition Cixiaobichang situation changes, that is, â€Å"seesaw† phenomenon. (4). Implicate effect. Will crown a strong brand name in other products, if different products in quality, level on the difference between the poor, which makes the strong brand name products and brand extensions have an impact, not only damaged the extension of brand name products, but also implicate the strong brand. 5). Dilute brand identity. When a brand on the market after the success in the eyes of consumers will have a special image orientation, attention also focused on the consumer to the product’s function, quality and other characteristics on. If enterprises use the same brand launch function, is almost the same quality of similar products so that consumers fainted the first shift, the brand identity will be diluted.