Sub-branding vs. brand fragmentation, which should you choose?

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July 28, 2015
Sub-branding vs. brand fragmentation, which should you choose?.
Designers commonly offer numerous services and products, from straight design consultation, to side-projects, and apps. But are you one organization or many? How similar should your offerings look? What brand strategy will lead to the most success for you? What’s the difference between a Volkswagen, an Audi, and a Porsche? They are all made by the same company with shared engineers and parts, but the parent company (Volkswagen) has been very strategic in how they’ve fragmented their brand. Southern New Hampshire University’s traditional program and its online program, College for America, are in the same product space — they are both offering a way to get a college degree. But, they do it in very different ways and for very different audiences at very different stages of life.

What’s right for your brand?

Regardless of whether you’re designing for a car manufacturer or a school or university brand, one of your first orders of business is to answer three important questions about how each of your offerings fits into your overall strategy:
  1. What are the advantages of sub-brands with an association between different offerings?
  2. What are the advantages of brand fragmentation?
  3. What will give you the best brand value?
Once these questions are answered, you will be able to focus on how to achieve your overall goals.

Brand fragmentation vs. sub-branding

Some level of sub-branding is a very common approach used by many companies as well as many higher education institutions (particularly mid to large sized schools). With sub-branding, there are some unifying perceptual factors common to all the brands in terms of:
  • messaging
  • color palette
  • typography
  • photography
  • structure and style
But there is a spectrum of differentiation to allow each sub-brand to most effectively resonate with its marketing and audience goals. Brand fragmentation on the other hand, maintains only the most tentative of links between different areas of a business. But note, the link is never broken entirely. When Toyota launched the Lexus, they made sure people knew it was created by Toyota (to leverage their reputation for top quality). They also changed the name of the car to denote a separate price-point. Nowhere on the Lexus marketing materials did it mention Toyota, yet people knew. There was a wink and a nod to it. The impression created in the market was: Lexus is different; it’s better; it costs more; it’s worth more. Would Lexus drivers pay just as much for a Toyota? Nope!

What are the pros of sub-branding?

Two of the most common reasons to closely associate products as sub-brands that are part of a larger brand, are, a) to look bigger, and b) to cross-pollinate success. Steve Jobs famously called this the “halo effect” (though he didn’t actually coin the term). Jobs knew that because iPods were selling like hotcakes, it would lead to increased traffic at Apple stores and increased sales of Macintosh computers. And he was right. [pullquote]Branding is about telling stories…to real people in an effort to get them to feel something and do something[/pullquote] While Apple doesn’t dive into creating competing products within their own line, they reach more of the market through the associations among their products. You’ll be hard pressed to interact with one of their products or employees without seeing a range of Apple’s other products. Use an iPhone to make a video? You should get an Apple TV to share that video with your family or a Mac to edit it. Have an iPod? Download music from iTunes. Have a Mac? Store your data with iCloud. When someone is buying an iPhone, is there an advantage to mentioning other Mac products? Of course! Apple is a premium brand. While their “official” mission statement is a bunch of marketing fluff, a line that’s often repeated by their leaders is that Apple is focused on “making the best products.” Note they do not say the most products. They say the best. Branding is about telling stories. You tell them with words and pictures, but you tell them to real people in an effort to get them to feel something and do something.

What are the pros of brand fragmentation?

When you consider the logistic, mindshare and design costs of managing multiple individual brands in the same product space, why would you ever want to do it? Wouldn’t it be cheaper and easier to just pick a color palette, choose a typeface, take some pictures and call it a day? Same PowerPoints. Same business cards. Same website design. The answer is: personalization. If you have the same exact audience for your products and services and strong brand recognition, you’ll reap great benefits from tying your brands closely together. Unfortunately, most organizations have very different audiences. Selling a home computer to a senior citizen is very different than selling 1,000 computers to the US Army. The product is different. The pitch is different. The decision-makers are different. The pain-points are different. Everything is different. So how do you figure this out? Always start with your customer: the person who will be deciding if it’s worth investing time and/or money in your offering. Can you tell the same story to each of them? Will they all respond the same way to the same imagery? [pullquote]When you fragment your brand you have the ability to be personalized and exclusive[/pullquote] Volkswagen could certainly get rid of the Volkswagen brand, and call every car they make a Porsche. Initially, they might even sell more cars because of it. But Porsche brings in 22% of their revenue, despite accounting for less than 2% of the actual cars that Volkswagen sells. A big reason for that is exclusivity. When you fragment your brand you have the ability to be personalized and exclusive. Saying, “We only accept the top 15 applicants every year,” will get you a higher tier of people than saying, “You’ll be one of 350 people going through this program this year.” Big is good, but so is small.

Which approach to choose?

It’s a spectrum. Some level of association leads to cross pollination and the “halo” effect, however greater brand fragmentation offers to opportunity to create premium goods and services, while maintaining your bread and butter offerings. Remember, branding is about getting people to feel what you want them to feel and getting them to do what you want them to do. Everything else is a tool. Featured image uses design process image via Shutterstock.

Jason Mark

@JasonOnDesign: co-founder of Gravity Switch, frequent contributor to popular nerd blogs, and dynamic speaker on topics such as web & mobile development, graphic design, and project management. In a past life he was one of the first professors to teach internet strategy and web design at a graduate level. His passion? Helping people "take it to the next level". Follow Jason on Google +

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