Is Launching a New Brand the Right Move for Your Company?

June
10, 2021

6 min read

Opinions expressed by Entrepreneur contributors are their own.


One of the most common challenges I see clients wrestling with — from solopreneurs to established businesses — is how to structure and manage multiple brands. The tendency is to jump straight to logo development for a new idea or to become a new . The problem with this approach is that it takes investment, resources and time to build that commercial identity. Usually it’s not until well after launch that those challenges start to present themselves clearly, impacting the performance not only of the new brand, but the entire . Here’s the good news, though; not all innovation needs to take the form of a new identity, and often, multiple ones aren’t even the answer. The solution can be a lot simpler than fragmenting dollars and other internal resources.

Before you start registering a new business and creating a new logo, you need to reconsider how the innovation hopefully at work fits into your overarching brand portfolio (also known as creating a “brand architecture”) and what its role is in delivering business objectives and vision.

Related: Get Over the Business-Naming Hump With These 5 Strategies

There are four main types of brand architecture models:

House of Brands: These are independent and unconnected brands, sometimes with only the subtlest of indicators that there’s a single mother brand behind each. This is typically employed when the mother brand isn’t credible enough to play in different categories or segments.

Sub Brands: A structure in which the mother brand is modified slightly, allowing it to stretch and serve different categories or audiences. Sub brands can create distinct personalities, but still need to adhere to strict principles of the mother brand.

Endorsed Brands: Here, the mother brand acts as a subtle endorsement to provide assurance and credibility, but generally these are able to “express” themselves in unique ways.

Branded House: In this model, the mother brand is core and additional brands are typically differentiated based more on features, while retaining the positioning, messaging and visual identity of the mother brand.

How to Evaluate Which Architecture is Right for Your Business

1. Ask how different your innovation really is to a current brand. Is it serving a completely new audience? Is it for a totally new category in the market? If the answer is “Yes” to both, this could be an early indication that a new brand is necessary. 

2. Ask what the opportunity is to share and/or gain brand equity. What could your innovation stand to gain by being associated with your current brand? What could that current brand stand to gain by being associated with the innovation? Much innovation actually borrows a lot of equity from the original brand. In these instances, innovation would benefit from being associated with the more established one. It’s an opportunity to quickly position innovation in the minds of an audience and stakeholders, giving it a shortcut to gaining essential early traction. If you’re using the innovation to expand the ability to express brand values, then maintaining some connection with an established brand is critical.

Related: 4 Signs You Need To Realign With Your Brand Values

On the flip side, some innovations present an opportunity to reinvigorate the established brand by creating a new point of relevance. That established identity can be leveraged where it makes sense for shared resources, capital, bargaining power and the like, while being able to bask in the fresh new light of innovation.

3. Understand the opportunities and risks. Is there an opportunity to create economies of scale with your marketing investment? Could your existing brand credibly serve this new audience? If you can strategically leverage marketing dollars to build a portfolio through achieving the right balance between branded and innovation-specific support, you’re really onto something; your resources and return on investment can be streamlined to deliver an overarching objective.

The downside is the “all eggs in one basket” dilemma. If a crisis hits and your brands are closely connected, all stand to face the music. Separating them requires them to stand alone, but could be beneficial for spreading risk and diversifying a portfolio (just like an investment portfolio).

Related: 4 Branding Tips From Gary Vaynerchuk and Entrepreneurs Who Built Brands the World Can’t Ignore

Examples of Good Brand Application

Building the sustainability credentials of a consumer products giant:  launched the brand, Love Beauty & Planet, with a range of plant-based hair and beauty products, which extended quickly into the Love Home & Planet home care range. From the outside, it presented as an independent, environmentally conscious entity. It enabled Unilever to build its sustainability credentials and attract a new audience — environmentally-conscious millennials — at a mass scale, by leveraging its market power with retailers. 

This isn’t new for Unilever, the archetypical House of Brands architecture. In the case of Love Beauty & Planet, the parent company couldn’t lead with its mother brand to do the job, but Love Beauty & Planet builds sustainability credentials of Unilever. This is leveraged more at a corporate and trade level, as opposed to communicating it widely to consumers. 

Enabling the world domination of a conscious brewery: The Scottish independent craft brewery, BrewDog, employs a Branded House structure, with strong positioning, visual identity and messaging across its portfolio of products and venues. This allows the brand to leverage marketing dollars effectively, and localize when it makes sense to. Each new product it launches is differentiated by style only (not by message or identity). Each new venue they open is adapted only as much as it makes sense for the local market (never compromising the BrewDog mother brand), from Tokyo to Las Vegas. They’re strategically able to build their message to the world — a highly profitable, independent, ethical and carbon neutral craft brewery. In my book, that’s some tasty strategic brand architecture.

Sometimes, all signs point to the creation of a new brand, but there are times when there isn’t a need to invest into developing something totally new. They key is investing in building a brand portfolio more strategically, to share resources for the greater benefit of the business and on the path to realizing your vision.

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