To Sub-brand or Not to Sub-brand? That is the question.

Before discussing the value of sub-branding, it’s important to understand an organization’s brand architecture – the structure of brands within a company or organization. This is the way in which the brands within a company’s portfolio are related to, and differentiated from, one another. The architecture should define how the corporate brand and sub-brands relate to and support each other and how the sub-brands reflect or reinforce the corporate brand to which they belong.

Generally, there are three defined levels of branding:

• Corporate brand– Examples of corporate brands include Nike and Dell. These are brands used across all the company’s activities, and the brand name is how they are known to customers, employees, shareholders, partners, suppliers, etc. These brands may also be used in conjunction with product descriptions or sub-brands, e.g. Nike Air or Dell Inspiron.
• Endorsed brands and sub-brands – For example, Residence Inn by Marriott, Sony PlayStation or Apple iPhone. These brands include a parent brand as an endorsement to a sub-brand or product brand. The endorsement is intended to add credibility to the endorsed sub-brand in the eyes of the market.
• Individual product brands – For example, Procter & Gamble’s Gillette or Coca Cola’s Sprite. The individual brands are presented to consumers, and the corporate name is given little or no visibility.

Let’s focus on sub-branding. A sub-brand is a brand that distinguishes a part of the product line within the brand system. For example, Ford uses the sub-brand Focus to distinguish a specific model from another model, such as the Mustang. Both are Fords, and both enjoy the equity of the Ford name, but each is a distinct product and is marketed as such.

One of the advantages of implementing a sub-branding strategy is the mutually beneficial nature of strong corporate and sub-brands. Successful sub-brands can help build positive perception and increase exposure for the parent brand and establish brand loyalty and trust. Likewise, customers who trust a corporate brand are more likely to try a new product under that main brand. Take, for example, Apple or Amazon. Anytime the companies debut a new product or service, they capitalize on the goodwill of their corporate brands, which creates trust in these new products or services.

When considering a sub-branding strategy, it’s important that the sub-brand is consistent with and supports the company’s brand identity. It should also somehow add value by better describing offerings, distinguishing offerings, augmenting the brand identity or exploiting market opportunities.

The advantages of sub-branding can also be disadvantages. When a sub-brand is unsuccessful, the failure can negatively impact the parent brand and affect loyalty, trust and business. Bad customer experiences can also create poor perceptions of the sub-brand and parent brand’s image. Sub-brands can also create confusion in the eyes of customers instead of clarifying and distinguishing brands. This can take away attention from a strong corporate brand.

One of the biggest issues we see with sub-branding is the lack of investment that companies make in supporting that brand. Building and maintaining a sub-brand requires additional budget to market and promote. Sometimes that means taking investment and attention from the corporate brand, which can weaken both brands. A sub-brand should be cost-justified in that it requires little investment to establish or the sub-brand business is large enough to provide resources needed for its own development.

The decision on whether or not to pursue a sub-branding strategy is unique to the company and its objectives and desired outcomes. There is a strong case to be made when sub-branding can serve companies well when the right combination of variables exists and vice versa. The key to the decision should be anchored in the business objectives of the company and thoughtful consideration based on the pros and cons.