Sub-Branding Strategy and Endorsed Branding Strategy

Sub-Branding Strategy and Endorsed Branding Strategy

Many companies use their corporate brand and partner it with its other brands using one of the two strategies: Sub-Branding or Endorsed Branding. Both of these are multi-brand portfolio strategies and aim to combine the cost efficiencies of the branded house along with the meaning differentiation and the risk-diversion of the house of brands strategies.

For example GE brands a wide range of products from home appliances to aviation systems to healthcare product and services, the company uses its brand in different ways across its portfolio. It is used as a corporate brand and also paired with non-branded products descriptors (GE Aircraft Engines), also together with multiple sub-brands on household appliances (GE Monogram), and as an endorser brand in energy consulting (Current, powered by GE).

Let's take a look at each of the 2 multi-brand strategies in more detail:

Sub-Branding Portfolio Strategy
This involves the pairing of a corporate brand with another brand called the sub-brand in tandem, to create and communicate meaning. Sub-brands help modify the meaning of the parent brand concerning a particular customer base or a particular context. The sub-brand also manages to help the parent brand signal something special about the parent brand, which is different from the other products that the parent brand adorns. Example of sub-branding: Samsung uses its corporate brand with product descriptors on a wide range of its products including computers, household appliances, life insurance products etc. But they prefer to use the sub-brand Galaxy for its mobile devices. The Galaxy sub-brand can increase its brand-equity and energize the corporate brand. A corporate brand and the sub-brand have the responsibility of operating on equal or unequal footing, depending on which brand is more influential in the customer's decision-making process.
Endorsed Branding Portfolio Strategy
Endorsed branding makes the corporate brand to authenticate another brand and provides reassurance of its credibility, quality, reliability and other important brand associations to reduce the buyer's risk. In this context, the corporate brand will perform as a subordinate brand and would let the other brand take centre stage. Phrases such as "by the makers of…" or the often-used "brought to you by…" are used to reinforce the endorsement, while the inclusion of the corporate brand on the product packaging visually reinforces it.
Example of endorsed branding: General Mills places its name and logo on the top left corner of the boxes of Cheerios, Chex, Kix, and Lucky Charms, but the cereal brand name takes a prominent position in the centre of the package.

Both sub-brand and endorsed-brand raise the risk of the portfolio. Because when a brand has a negative event, it may spill over to all other brands related to it in the brand portfolio. Although sub-branding yields a stronger brand-relatedness than endorsed branding, less established sub-brands or endorsed brands will suffer more to the negative spillover effect from a corporate brand's negative events than a well-established corporate brand from a sub-brand risk.

⇒ Please share your ideas on Sub-Branding and Endorsed Branding and help making this topic stronger.

Source: Avery, J., (2016. Brand Portfolio Strategy and Architecture, Harvard Business School, 9-517-021.

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Jaap de Jonge
Editor, Netherlands

(Sub-) Branding Strategies for a New Product

A recent article based on extensive research among 20,000 introductions of CPG products in the USA mentions 3 branding strategies to name a new product (apart from using only a single brand for any product (Sony)):
- NEW BRAND: An entirely new name is being used without communicating any relation with the existing/parent brand. For example: Dasani bottled water (is owned by Coca-Cola).
- DIRECT EXTENSION: An existing brand name is used plus a descriptive word or phrase. For example: Google Maps.
- SUB-BRAND: an existing brand name plus a non-dictionary or non-specific word or phrase is being used. For example: Apple iPad.

Which brand strategy is best for a new product? Interestingly, although it's no exact science, the researchers mention 5 factors (product and firm characteristics) that guide the most successful branding choices:
1. Fit with the company's other offerings. If the fit is low, the New Brand strategy is best.
2. Innovativeness of the new product. If very risky, the New Brand strategy is best.
3. The breath of the existing portfolio. If you have already many brands, Direct-Extension is logical as it could be relatively easy to tie the new product to one of these existing brands.
4. The risk of brand dilution. A company/brand should not have too many Extensions.
5. Amount of advertising funds. If financial resources are limited, marketing a New Brand might be too expensive.
Source: Kovalenko L., Sorescu A. and Houston M.B. (2022), "What brand do I use for my new product? The impact of new product branding decisions on firm value", Journal of the Academy of Marketing Science, 50, pp. 338–365.