Day 99:) House of Brands

Why do companies have multiple brands in the same segment?

Established companies mostly have multiple brands under one umbrella. For instance, the Volkswagen Group owns the following car brands apart from Volkswagen – Audi, Skoda, Bentley, Seat, Bugatti, Lamborghini, Ducati, Porsche and some more. They all are sister brands. In the same lines, Hindustan Unilever Limited (HUL) owns over 35 brands namely Lux, Dove, Surf Excel, Closeup, Axe, Kwality Wall’s, Horlicks and more. The giants acquire multiple brands from other companies. Like, HUL recently acquired Horlicks from GSK. Thereafter, they don’t change the name as Horlicks already have lot of brand value in Indian market. We already have the perception of taller, sharper and stronger with the healthy drink. Moreover, it can target different segment of people. Some of the sister brands are in premium category. Further, in case of Volkswagen it can target different geographies, where people are more associated with a brand.

For simpler understanding let’s take the example of Relaxo, the footwear giant. It owns the following brands – Flite, Bahamas, Schoolmate, and Sparx. Flite are normal slippers. Bahamas are more fashionable. Schoolmate is for schooling kids. Sparx is more of sporty. Each of the brands appeals to different customers segments and has different pricing and perception.

On the other hand, the Tech giants follow Umbrella branding. Google’s most of the products come with the prefix Google – Google Pay, Google News, Google Assistant, Google Could. For Jio, it is more invisible with namely – JioMarts, JioSaavn, JioTV, JioNews, JioMoney, JioCloud and many more. Since Google and Jio both they have already developed the trust with the consumers. They can leverage it with their other business segments, earning more sales and profits.

Lastly coming to smart phone industry. Realme, Oppo, Vivo, iQOO and OnePlus are all sister brands. They are owned by BBK Electronics Corporation, a Chinese multinational firm specializing in electronics, including TV, smartphones, MP3 Players and digital cameras.

Next time whenever you buy a product, read more about it. Chances are high that you will learn some new interesting facts.