What do some of the world’s 100+ year old brands have in common? Most of the oldest and biggest brands such as P&G, DuPont, and JPMorgan Chase own and manage a wide portfolio of subsidiary brands consolidated under the umbrella of a single enterprise.

Multi-brand management is a marketing reality that is rapidly gaining momentum given the unprecedented rate at which businesses are being established and scaled. Meta is barely 20 years old, and it has exploded into a supercluster of brands impacting almost everyone’s daily life.

The rise of conglomerates from humble startup beginnings gives marketers a greater responsibility and a bigger role in overall business success. According to CB Insights, 519 privately held startups turned into unicorns globally in 2021 alone. For younger brands such as ByteDance, SpaceX, and Binance, attaining the unicorn status is often accompanied by a drive to branch out, which in turn necessitates a robust multi-brand strategy to safeguard and enhance brand equity.

Whether you are at the helm of the marketing function within a well-established conglomerate, or you are leading modest marketing efforts at a startup level, the multi-brand success formula is almost identical. The main purpose of a multi-brand strategy is to gain a competitive advantage, generate revenue, and increase market share.

So how do you create separate but related categories and products that appeal to different target groups while remaining true to the overarching brand identity? Over the long term, how do you even navigate the evolving market landscape while continuing to hold your brands together?

As a Group Marketing Manager at XA Group, I manage and execute the marketing efforts on both the corporate and subsidiary brand levels. With a portfolio of 12 brands within the group, including the corporate brand, the success of my work is largely determined by the impact of multi-brand strategy formulation and execution on business growth and brand equity.

I’m focused on relaying a consistent brand narrative across the brand portfolio while creating a distinguished market positioning for each of our three business categories catering to the automotive aftermarket sector: Digital, Hardware, and Manpower. Adding to the complexity, each category is comprised of several brands.

For instance, our digital category alone entails Addenda and TowX, as well as exclusive partnerships with Privacy4Cars and GT Motive, each of which requires a unique set of marketing efforts as they cater to slightly different market subsegments. While each of these categories and brands has its own branding and marketing requirements, all of them must co-exist in perfect harmony, with one another and with the corporate brand.

To add to the complexity, we are also building more applications and solutions that will require unique yet consistent marketing efforts to ensure a good fit with our corporate branding and positioning.

While reaping the benefits of multi-brand marketing, every brand portfolio is grappling with a different set of challenges. Let’s take a look at some of the advantages and pitfalls of multi-brand strategies.

Advantages

Attaining a market leadership position: Multi-brand marketing helps companies emerge as market leaders and achieve stronger visibility and positioning, especially in the current omnichannel revolution where multiple brands within the same portfolio are often recognized and associated with the success of their parent company. Presence across several market segments and exposure to different audiences means parent brands are seen more often, boosting overall brand recognition and sales.

Thrashing the competition: When a company manages multiple successful brands under the same category, it is challenging for the competition to win market share. It is hard for a new ‘soldier’ brand to get noticed when an army of other brands under the same corporate commander occupies all the shelf space.

Capitalizing on previous customers experiences and brand successes: When a parent brand or any subsidiary brand gains popularity and reaches a point of high demand in its lifecycle, any new brands added to the portfolio can capitalize on positive customer experiences and strong affinities, leading to a higher chance of brand success. In addition, strong brand recall through the parent company’s image will likely translate into more consumer trust and preference compared to a competing brand making an entry into the market. Also, cross-brand marketing gives marketers the ability to tap into existing customer databases and learnings from previous campaigns, rather than building campaigns from scratch or allocating big budgets for new lead generation.

Challenges

Brand dilution: Overly diversifying a brand portfolio, especially within the same category, and trying to be known for multiple strengths in the mind of consumers, could be a recipe for losing focus at the corporate level. It is also difficult to maintain a unique brand identity for each brand while promoting them all under a single corporate umbrella.

Cannibalization: Brands under the same corporate identity may end up competing with one another in terms of marketing budgets, market positioning, share of voice, and sales.

Reputational risk: A tarnished image at the corporate level or at the subsidiary brand level will likely affect the entire brand portfolio and vice versa. External factors such as celebrity endorsements may also affect brand reputation by mere association. Any negative publicity about the celebrity endorsing the brand can affect brand image and sales across the portfolio.

Higher customer expectations: Consumers have high expectations from corporates offering multiple brands. A negative customer experience at any marketing touchpoint or in relation to product usage may impact the rest of the portfolio.