The laws of branding seem to suggest that a company concentrate all of its resources on a single brand for a single market. Keep the brand focused and ignore opportunities to get into new territories.
True. But there comes a time when a company should launch a second brand. And perhaps a third, even a fourth brand.
A second-brand strategy is not for every company. If handled incorrectly, the second brand can dilute the power of the first brand and waste resources.
Yet, in some situations, a family of brands can be developed that will assure a company’s control of a market for many decades to come.
Take the Wm. Wrigley Jr. Company. For more than a hundred years, Wrigley has dominated the chewing gum market, generating billions of dollars of profits. But not with one brand. Today Wrigley has a family of brands.
The key to a family approach is to make each sibling a unique individual brand with its own identity. Resist the urge to give the brands a family look or a family identity. You want to make each brand as different and distinct as possible.
The Wrigley approach is not perfect. Wrigley’s first three brands (Juicy Fruit, Spearmint, and Doublemint) are too much like line extensions. They need the Wrigley name to support their generic brand names. Big Red, Extra, Freedent, and Winterfresh, however, can stand on their own, each as totally separate brands.
Most managers are too internally focused to see the power of a separate identity. They want to “take advantage of the equity” their brand already owns in the mind in order to successfully launch a new brand.
So IBM launches brands like the IBM PCjr. And NyQuil launches DayQuil. And Blockbuster Video launches Blockbuster Music. And Toys “R” Us launches Babies “R” Us.
Time Inc. became the world’s largest magazine publisher, not by launching line extensions of its core brand, but by launching totally separate publications. Like Wrigley, Time Inc. has seven publishing powerhouses.
(Nobody’s perfect. So now we also have Digital Time, Teen People, and Sports Illustrated for Kids.)
And what about ESPN Magazine? Does anyone except Disney really believe that ESPN Magazine will score any goals against Sports Illustrated? We certainly don’t. The strength of a brand lies in having a separate, unique identity—not in being associated in the mind with a totally different category.
Having a totally separate identity in the mind doesn’t mean creating a totally separate organization to handle each brand. Wm. Wrigley Jr. Company doesn’t have seven separate manufacturing plants or seven separate sales organizations. It has seven brands and one company, one sales force, one marketing organization.
When General Mills decided to get into the Italian restaurant business, it didn’t start from scratch. It used everything it had learned about the seafood restaurant business to jump-start its Italian sibling. The one thing it did not do was to spin off its Red Lobster name. No Italian Red Lobsters.
General Mills invented a separate brand called Olive Garden. With this strategy, the company was able to create the two largest family-restaurant chains in America. (Subsequently, the two chains were spun off into Darden Restaurants, Inc., which immediately became the world’s largest casual-dining company.)
When Sara Lee tried to take its panty hose brand into the supermarket trade, it didn’t use its Hanes name. Nor did it call the new brand Hanes II or Hanes Too.
Sara Lee created a separate brand designed for supermarket distribution called L’eggs. Packaged in a plastic egg, the product became the number-one supermarket brand and the number-one panty hose brand, with 25 percent of the total panty hose market.
When Black & Decker, the world’s largest power-tool manufacturer, wanted to get into the professional power-tool market, it didn’t use the Black & Decker name. Nor did it call the new product Black & Decker Pro.
Black & Decker created a separate brand called DeWalt. In less than three years, DeWalt became a $350 million business, the market leader in professional tools, and the second-largest power-tool brand after Black & Decker.
In the past, companies have created families of brands based on the principles behind the law of siblings. As time goes by, they forget why the brands were created in the first place. Instead of maintaining separate identities, the brands are mashed together and a layer of corporate frosting added on top. Instead of becoming stronger, the brands become weaker.
General Motors used to market a phalanx of five brands, each with its own identity. Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac. Any twelve-year-old kid could spot a Chevy a block away and instantly identify the brand. Or a Pontiac. Or an Oldsmobile. Or a Buick. Or a Cadillac.
Holes in the front fender? That’s a Buick. Fins on the back fenders? That’s a Cadillac.
No more. Even if you work for General Motors, we defy you to spot GM cars on the street and then correctly identify the brands.
Many CEOs believe that a sibling strategy works best when the organization itself is decentralized. “Let the brands fight it out among themselves.”
Not so. That belief is what got General Motors in trouble. Control over the brands (or divisions) was lifted and each division allowed to set its own course. Results were predictable. Each division broadened the scope of its brand and the world ended up with expensive Chevrolets, cheap Cadillacs, and bewildering brand confusion.
A sibling strategy requires more top-management supervision, not less. The urgent, long-term need is to maintain the separation between the brands, not to make them all alike. Human instincts work in the opposite direction. Result: All General Motors cars ended up with fins.
Nor is there a need to tag the corporate identity on every brand. Does the customer buy a Lexus because it’s made by Toyota? Or in spite of the fact that it’s made by Toyota?
The customer buys a Lexus. That’s the power of the Lexus brand. The corporate connection is irrelevant.
In particular, corporate management should keep the following principles in mind when selecting a sibling strategy for its stable of brands.
A family of sibling brands is not a strategy for every corporation. But where it is appropriate, a sibling strategy can be used to dominate a category over the long term.