Dual Branding Essay

Submitted By kategriffiths33
Words: 4130
Pages: 17

Dual branding: how corporate names add value Examines how corporate names add value to branded fast moving consumer non- durable goods. Uses conjoint analysis to test combinations of brand names, corporate names and prices of confec- tionery countlines. The results show that both brand names and corporate names add value although some add more value than others. The market is price sensitive so pricing above a threshold level wipes out much of the influence of corporate and brand names. The sensitivi- ties to names and price do not vary with the a priori segment tested although natural clusters of customers show differences.
Introduction
Competing companies are inconsistent in the way they brand their products. In the UK confectionery market, each of the major com- petitors, Cadbury Schweppes, Nestlé and Mars, have different brand strategies. Cad- burys use mixed corporate brands where their corporate name has the same emphasis as the brand name, for example, their top selling chocolate bar is Cadbury’s Dairy Milk. This product competes with Nestlé’s Yorkie where the brand name Yorkie dominates and Nestlé appears as a small endorsement. Another direct competitor is the stand-alone brand Galaxy, made by Mars, whose origin appears on the back of the pack. This diver- gence is not unique to the confectionery market, as Table I shows.
Branding as a way of marketing products has grown alongside brand management, where bright young marketers manage brands. This has led to brands being managed in isolation and the brand being the focus of attention. This is changing. Through cate- gory marketing and other new ways of orga- nizing the marketing effort, managers or teams look after several brands rather than one (Kotler et al., 1996). Other popular mar- keting ploys are making the branding situa- tion more complicated. Umbrella branding means the same brand name covering several individual products, Fairy Household soap and Fairy liquid being old examples. Recently the quest for brand leverage has found brand names appearing on products managed and manufactured by completely different parts of organizations. Following Nestlé’s acquisi- tion of Rowntree Mackintosh, Rolo, Aero and Milky Bar have all appeared as desserts sold by the grocery division of the company. Simultaneously market leading products such as KitKat and Rowntree’s fruit gums reappeared as “iced confectionery”. Acquisi- tions have led to a muddle in other ways, so that the same organization sells Nestlé’s Milky Bar, Rowntree’s Pastilles and Mackin- tosh’s Quality Street. Perhaps the most extreme case of a brand’s tentacles reaching too far was when the Cadbury’s name, with its rich chocolatey connotations, appeared on Smash instant potatoes and a grotesque prod- uct failure using a synthetic meat in gravy. Although originally a pioneering “housewife liberating food”, once Smash aged, it added little to Cadbury’s traditional chocolate image. Thankfully Cadbury Schweppes’ con- centration on the confectionery and soft drinks market accompanied a rationalization of the brand names used.
This brand confusion accompanies an increased recognition of the value of brands (Barwise, 1993; Keller, 1993; Murphy 1991) and concerns the appropriateness of brand exten- sions (Aaker and Keller, 1990). If brands do have value then the way a company uses its portfolio brands is a top management deci- sion (Uncles, et al., 1995).
Stand-alone brands, such as the Mars bar, are rare. Most grocery products come with an assortment of names, extreme ones being Friskies, Gourmet, A la Carte with seafood, an indulgent pet food, or Nestlé’s Breakaway Caramac (Laforet and Saunders, 1994). Does this hotchpotch of brand names appearing on packs add value? Is Cadbury’s correct in using its name across its whole range of con- fectionery or would it be wiser to follow Mars in keeping its name off Snickers and
M & M’s? We analysed this question using an experiment to see if the addition of a corpo-…