Sub-Brands — How to Apply the Strategy?

Sub-brands are usually recognized as a great strategic tool that brand managers can use to modify their customers’ expectations.

If your major brand has a sub-brand, you can use it to create exposure for the sub-brand itself, as well as the parent brand. You can engage new and existing audiences while taking advantage of the trust you’ve already spent many years building, all in your chosen field.

But what exactly is a sub-brand? It’s not as simple as saying it’s just the child company. Most importantly, if you want to know what it is exactly, you also need to understand how you can effectively apply sub-branding to your own organizational structure.

What Is a Sub-Brand?

In the simplest of terms, a sub-brand is a brand that exists as part of a bigger brand. It’s separate as it uses a different name and branding.

Moreover, sub-brands always have unique customer expectations that differ from the parent brand.

The sub-brand may be unique, but it’s still a big part of the parent brand, which is why it’s usually advertised along with it.

For instance, if you see a commercial for the Big Mac, a sub-brand of McDonald’s, you’ll never see it without the McDonald’s logo, even though the Big Mac is more recognizable than any other product McDonald’s offers.

However, that doesn’t mean that the sub-brand can’t have other brands as sub-brands of its own.

Recognizing a sub-brand is usually quite easy. There is always a copyright mark, registration mark, or maybe a trademark right beside the product’s name to clearly show that the brand belongs to another bigger company.

Great Sub-Branding Examples

To fully grasp the bigger picture and how sub-branding works, it’s worth considering some great examples of how major companies approach the subject.

For instance, let’s look at the FedEx Corporation, one of the biggest multinational delivery service companies.

FedEx has one of the best sub-brands in the form of its air delivery service called FedEx Express. The sub-brand is a subsidiary of FedEx, but it clearly shows that it’s part of the bigger FedEx corporation within its logo, marketing, and more.

It’s massively successful on its own, but everyone still clearly connects it with FedEx, and that’s precisely the goal of sub-branding.

But that’s not all; FedEx also has other sub-brands, all major brands of their own. These include FedEx Ground, FedEx Freight, FedEx Custom Critical, and FedEx Trade Networks.

Another great example can be found within the Virgin Group, one of the biggest multinational venture capital conglomerates in the world, founded by Sir Richard Branson, the famous English business magnate.

Virgin is known for its logo, and it uses it for all of its sub-brands to clearly show that they are part of this major corporation. For instance, Virgin Atlantic is arguably more famous than the Virgin Group, but it’s still a clear sub-brand of Virgin Group. Other Virgin sub-brands are Virgin Mobile, Virgin Trains, Virgin Active, and many more.

Pros and Cons of Sub-Branding

To fully appreciate the benefits of sub-branding and consider its downsides, we need to take a closer look at all the pros and cons of having a sub-brand.

Pros:

  • Successful sub-brands help advertise and increase exposure for the main brand.
  • Sub-brands help establish loyalty and trust for the parent brand, not just for the sub-brand itself.
  • Customers who appreciate and buy from the sub-brand are more likely to purchase products or services from the parent brand and vice versa.
  • Customers are more likely to test other products of the parent brand if they have already tested and connected with the sub-brand.
  • Sub-branding a product or a service lets it become its own unique brand whose success is not limited by what the parent brand can achieve.
  • Sub-brands are the perfect way for a company to explore other niche markets.

Cons:

  • It costs to promote, market, and maintain the sub-brand.
  • There is always a chance for sub-brands to end up unsuccessful.
  • If a sub-brand is unsuccessful, this can negatively impact the loyalty, trust, and overall business of the main brand.
  • Poor customer experience with a sub-brand can easily rub off on the parent company and other sub-brands.

Brand Architecture and How to Apply Sub-Branding

You can already see that sub-branding is a complex procedure, one that would take a lot of consideration and a long time to complete.

However, it’s part of a larger concept called brand architecture. This is practically the blueprint for your vision of your brand. The brand architecture you create now will help you effectively choose and develop existing, future, and other acquired brands.

For this reason, you first need to work on your corporate branding and only then move to sub-branding, which is effectively considered the second level of branding.

Once the corporate part of your brand architecture is done, you can move on to sub-branding. Now it’s time to consider scenarios in which a sub-brand is applicable. Developing a sub-brand won’t be too hard if you have a clear vision and understanding of when a sub-brand is needed.

Here are the most common scenarios when sub-branding is desirable:

  • You wish to connect with a specific niche or market, and the best way to do it is through a sub-brand.
  • You want to satisfy the needs of new customers. This is quite common for companies that are growing and learning more and more about their customers. New customer needs will then arise, so you’ll have to consider a new sub-brand to meet them.
  • You want to challenge the norms in your industry. The best way to approach this is through a challenger sub-brand.

Once that’s done, there will be many questions you’ll need to ask yourself to determine how to approach the sub-brand. How much money are you willing to spend? How separate should the sub-brand be from the parent brand?

These are just some of the questions, and as you can imagine, there will be many more and a lot of other things your team will have to do to build the sub-brand.

Naturally, this is not something you should do all on your own, and the help of professionals like the team we have in Crankworks will be more than beneficial. Reach out to us, and let’s see what we can do for you.

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