Ok, so you’re extremely dedicated to your core company’s mission, but what if we said that isn’t enough? It’s time to expand your horizons and give your team opportunities to explore fresh ideas and connect with new audiences. And that’s a normal part of doing business!
The good news is that you don’t have to ditch your primary company; you can use it to build a new sub-brand and expand outside your original business idea. Sub-brands are often referred to as “spin-off” concepts. They are still related to a company’s original purpose, but they embrace their own identity. Sub-brands possess unique values and personalities. When implemented correctly, they attract new audiences and revenue streams.
Sub-brands are not new concepts for companies or branding agencies. For example, Bud Light is a sub-brand of Budweiser. Budweiser created Bud Light to offer beer drinkers a lighter beverage with fewer calories and carbs. However, this concept might be completely new to you and your team, and so you’ll need a bit of expert guidance if you’re going to pull off a great project.
Ready to set sail and explore new territory with your business? Read on to learn more about the potential sub-brands have and how they can help you reach your creative and financial goals.
Creating Your Brand Strategy with Sub-Brands
Any successful business will inevitably change over time. No matter if you work for a branding agency or own a global company, you may feel the need to extend or expand what you offer.
As you explore new niches with different sub-brands, you need to make some major considerations: How will your brand strategy evolve? How will each new entity relate to one another?
New entities get new products and services off the ground and draw attention to the original companies. They can also get companies in touch with new segments of their existing target customers.
As changes happen quickly, businesses may lose sight of their goals and veer off course. Brand architecture can help both a business owner and brand agency stay on the right path and explore new revenue sources.
Using Brand Architecture:
Brand architecture is an essential asset for any business. It’s the grand design that a company uses to facilitate its growth. When set up properly, it will not only help you structure your “master brand,” but it will also let you establish any additional identities that emerge from your initial vision.
You should think about building your business like designing your dream home; you wouldn’t begin any construction work until you know what the finished product will look like.
As your business grows, your products and services will evolve, and your target markets are bound to change. That’s why your brand architecture should be there to guide you through these adjustments.
Brand architecture is an intricate concept, so every business and branding agency doesn’t implement the same strategy. Three common models you can adopt include:
1. House of Brands: This strategy involves one parent company that manages a selection of different entities. Most often, these entities are separate from an outsider’s perspective. They don’t have any obvious connections to the original company. One of the most prominent examples of this strategy is Unilever. Unilever is a multinational business that distributes various personal care and hygiene products. Unilever owns multiple sub-entities, including Dove, PG Tips, and Persil.
2. Hybrid Brands: As their name implies, hybrid brands fall in between the other two types. Under this strategy, the core company endorses each separate entity. However, the primary brand still maintains a unique identity. Sony, which endorses Bravia, Walkman, and PlayStation, is a trendy hybrid brand.
3. The Branded House: This strategy is when the parent company shares its identity with each separate entity. A good example of this strategy in the real world is Google with Google Maps, Google Translate, and Google News. Coca-Cola with Coke Zero and Diet Coke is another good example.
How to Make Your Sub-Brand Sensational
Building a web of sub-brands may seem intimidating. You need to make them interconnected but still leave room for them to stand alone. Achieving this perfect balance will require a lot of time, effort, and planning.
Despite any initial apprehensions you may have, the process is simpler than you think. Before your business or branding agency begins to experiment with sub-brands, you need to remember one key takeaway: connect your sub-brands to your original company but do not sell the same products or services.
Entities have their distinct USPs, missions, and personalities. However, they need to relate to the parent company in one way or another. For example, it would not make sense for Betty Crocker to sell hair care products. It would also be counterproductive for Honda to put out a line of luxury perfumes.
Every entity in a branded house, house of brands, or hybrid portfolio needs to have one common factor. This common factor should remind consumers of the original company’s mission.
Even large corporations like Proctor & Gamble (P&G) can create this common factor. P&G owns seemingly unrelated companies like Tide, Crest, and Pampers. However, P&G’s mission statement explains it all: each entity strives to “improve consumers’ lives in small and meaningful ways.” The many consumer goods that P&G’s entities produce do just that.
Sub brands are powerful, as they give businesses a way to investigate unique ideas and create new revenue streams. They also offer structure and stability, as there are certain limitations in place. Every entity remains tied, in one way or another, to the original thread of inspiration.
The Most Prominent Sub-Brand Examples to Learn From
If you need a way to distinguish certain products you want to sell, creating sub-brands is an effective solution for you. Whether you take on the task yourself or recruit a branding agency, developing sub-brands can be very beneficial in the long run.
In one Nielsen study, more than half of respondents in both developed and developing markets said they would prefer to buy products from brands they were familiar with. With a sub-brand, you can put your company name (with a fresh twist) in front of current and potential customers. As long as you adequately connect the new entity to your parent company, you will have eager customers from the get-go.
Are you looking for some inspiration to get started? Here are our top sub-brand examples that you can learn a thing or two from.
1) Whirlpool (KitchenAid, Hotpoint, and more)
Whirlpool is most popular for producing washing machines and other cleaning devices. The company, which was founded in 1911, has established several entities over the years. These include:
Consul: Consul is an appliance company. It strives to offer users equipment they can use to partake in faster, more efficient cooking.
KitchenAid: KitchenAid sells countertop appliances like stand mixers, food processors, and blenders.
Hotpoint: Hotpoint sells refrigerators, freezers, and cooking devices.
Yummly: Yummly is a smartphone app that offers users access to tasty recipes.
Since its inception, Whirlpool has created these entities to fulfill its mission statement: “Every Home…Everywhere…with pride, passion, and performance.”
With every company it creates, Whirlpool hopes to facilitate a more practical domestic life for customers of diverse backgrounds.
2) Sony (Playstation, Vaio, and more)
Since its inception more than 70 years ago, Sony has established itself as the go-to company to meet consumers’ entertainment needs.
However, there isn’t just one kind of entertainment, and Sony has taken advantage of this fact. You can find the Sony logo on everything from TVs to headphones.
To get connected with its target audience on a deeper level, Sony has created the following entities:
Sony Playstation: Sony Playstation produces consoles and other gaming equipment for gamers of all skill levels.
Vaio: Vaio is a Japanese-based company that produces computers and smartphones.
Columbia Pictures Entertainment: Also known as “Sony Pictures,” Columbia Pictures Entertainment is a famous film production company. It is responsible for famous franchises like Spiderman and Men in Black.
Bravia: Bravia focuses on producing monitors and televisions.
Walkman: During its first few decades in business, Walkman produced items like portable DAT players, radio receivers, and CD players. Today, it only produces digital audio and media players.
Sony has a very beneficial brand structure, as it can choose to add its name to future sub-brands or leave it out. It all depends on how much association they want a new product to have with the parent company.
For example, Sony Playstation reminds customers of the original Sony company, but Vaio exists more independently. However, both companies belong to Sony.
3) Nike (Converse, Jordan, and more)
Nike is an exceptional brand in the apparel industry. Its focus on athletic clothing has forever impacted the fitness world.
However, the Nike “Swoosh” isn’t the only thing this company is responsible for. Over the years, Nike has created some impactful, successful companies for consumers. Some of these include:
Converse: Converse was created to serve customers interested in skating. It also sells more casual lifestyle footwear selections.
Nike Air Max: Nike Air Max is geared toward those with an interest in basketball.
Hurley International: Hurley International focuses on producing swimming and surfing apparel.
Umbro: Though based in the United Kingdom, Umbro is a football company that sells its products in over 90 countries. Footballers (or soccer players in the U.S.) can purchase gloves, balls, jerseys, and more from this company. It also has specific products available for rugby players.
Nike Golf: As the name implies, Nike Golf releases shoes, hats, gloves, bags, and other accessories for amateur and seasoned golfers.
With every new entity it creates, Nike finds a new customer to cater to in the athletic world.
4) Ralph Lauren (Polo, Purple Label, and more)
Every time it extends its brand, Ralph Lauren reaches new customers but maintains true to its original vision.
Founder Ralph Lauren’s original intention was to design “dreams” rather than clothing. The entities his company has created have helped people from all walks of life dress more confidently and lead happier lives.
Here are some of Ralph Lauren’s most popular entities:
RLX Ralph Lauren: This entity caters to younger people and athletes.
Denim & Supply: Denim & Supply produces more modern clothing with a focus on denim.
Ralph Lauren Polo: Ralph Lauren Polo is a casual collection inspired by the parent company’s iconic polo shirt.
RRL: RRL sells everyday clothing with a rustic, outdoorsy feel.
Ralph Lauren Purple Label: Purple Label sells clothing based on customers’ specific measurements and preferences.
All of Ralph Lauren’s sub-brands have their unique appeal, but they are all reminiscent of the parent company.
5) Toyota (Isuzu, Lexus, and more)
Sub-brand strategies are prevalent among a lot of car dealers, and Toyota is a prime example. Different types of cars will attract different buyers. Some buyers are on the lookout for the best deals. Others are more focused on safety or luxury features.
Some sub-brands that Toyota has created to cater to various car buyers include:
Daihatsu: Daihatsu is a Toyota subsidiary based in Japan. It produces reliable, everyday cars for practical buyers.
Isuzu: Isuzu produces many types of vehicles. It has everyday cars, SUVs, and trucks available to ordinary buyers. The company also makes vehicles and diesel engines for commercial customers. Some more heavy-duty vehicles produced by Isuzu include passenger vehicles and buses.
Subaru: Subaru is most well-known for offering affordable sports car designs to buyers.
Hino Motors: Hino Motors is very similar to Isuzu, but this company is based in Japan.
Lexus: Lexus can be described as Toyota’s “luxury” counterpart. Consumers can buy various vehicle types from Lexus, including sport-utility, convertible, sedan, and hybrid vehicles.
The Evolution of Coca-Cola
As you and your branding agency begin to consider creating sub-brands, you may start to grow anxious. What if you decide on one brand strategy only to reevaluate it later?
This is not a shortcoming in any way; it’s a sign of progress and advancement. If you need further reassurance, one of the world’s most recognizable trademarks went through this decision!
Back in 2015, Forbes.com reported that Coca-Cola was to revamp its brand strategy. The beverage corporation decided to release its “One Brand” strategy, which would unify its marketing efforts under the Coca-Cola master company.
Coca-Cola managed to change its public image. It went from a company that offered multiple products to one that served various kinds of customers.
This transition wasn’t, and isn’t, always smooth-sailing. Changing up Coca-Cola’s entire brand strategy required a lot of planning and adjustments. Plus, issues with any Coca-Cola product now have more of a negative impact on the parent company than before.
Coca-Cola thrived for years under its initial strategy. It endorsed several products, including Diet Coke, Coke Zero, and Coca-Cola Energy. However, its new approach has allowed it to:
- Give customers the option to select a drink that fits their lifestyles
- Incorporate universal storytelling strategies
- Extend the iconic logo and color palette across one portfolio
Coca-Cola’s marketing transition is living proof that your company doesn’t have to stick to the same brand strategy for its entire existence. There’s no one correct way to revamp a business’s brand strategy. Some companies transform from a house of brands to hybrid brands, or vice versa. Others go from a branded house to a collection of hybrid brands.
The right move for your business will depend on what you and your branding agency come up with.
3 Questions to Ask Yourself As You Build Your Sub-Brands
As you’ve read from the above examples, creating sub-brands is a great way to elevate your company to the next level. With them implemented, you can reach new audiences, share new products, and generate new income sources.
However, if you want to create a new entity, you need to have a good brand strategy. Making a successful sub-brand is not the same thing as adding another product to your company’s offerings.
When you create this kind of entity, you will need to design an entirely new structure. Each sub-brand should have its own manifesto, value, and guidelines to follow.
Putting out a new sub-brand hastily with inadequate planning can lead to various problems. You may confuse your customers about what you’re offering. As a result, you may not achieve the sales you expected. This can leave your company or brand agency in a less-than-ideal financial situation.
So, as you start creating a sub-brand, keep these three questions in mind:
1) Do Your Offerings Conflict with One Another?
When you first launched your parent company, you likely had a strategy for what you wanted to sell. You likely knew what customers you wanted to target.
If you start to recognize new products to sell, make sure that they don’t conflict with your original goals.
For example, your health food company probably shouldn’t create a spin-off company that produces junk food. Customers will be confused as to the original goals of your parent company. Instead, you can create separate entities that make healthy food for people on different diets like keto or vegan diets.
2) Do Your Offerings Have Something in Common?
As you create new “child” companies from your core business, you need to keep your existing brand identity intact.
Let’s stick with the example provided in question #1. As a health food company, you can expand into different markets while sticking with your main goal: providing buyers with ways to live healthier lifestyles.
Whatever your new entities are, you need to ensure they complement but don’t conflict with your parent company. This can be a difficult balance to achieve. However, with the right planning, you can make it happen.
3) Are Sub-Brands in Your Budget?
Running one business requires a lot of resources. You need a supportive team behind you and a detailed brand strategy. You’ll need to consider the costs of legal fees and promoting your new organisation.
Before you start building it, ensure you have the necessary funds (with some leftover) to nurture and grow your new entity.
Is Using Sub-Brands Right for Your Business?
Sub-branding is a well-established concept. For decades, numerous corporations have found new ways to extend their brands. Even though sub-brands can be profitable, they are not the right choices for every business. Newer companies will need to focus on getting established before they think about branching out.
The best sub-brands are most often meaningful components of the parent organisation. However, they do not have to follow the same procedures as the parent company. A good branding agency will explore different USPs (unique selling points) and sales strategies.
To create a sub-brand, you must have a solid brand architecture in place. This plan clarifies your strategy for development and points out where growth is possible. It will help you define what you want your company to accomplish in the long run. These details will help you define a good time for creating your sub-brand and avoid jumping into it head-first.
As long as you are deliberate in building your parent company, you can eventually explore new ideas and extend into sub-brands. A skilled creative agency is essential for smooth sailing when it comes to implementing sub-brands. Get in touch with us today to find out how we can help you take your brand to the next level.