José Ignacio Gafo Gómez-Zamalloa

Let me start this posting with two questions:

1 .What do they have in common each couple of brands with the others?

• Volkswagen and Skoda
• Sony and Aiwa
• Royal Canin and Pedigree
• Whiskas and Felix
• American Tourister and Samsonite
• Marlboro and LM
• Iberia and Click Air

2. Would you purchase a desktop computer branded Cool? How much would you pay for it? And what would you do if it would be branded Cool BY SONY?

The answer to the first question is that each couple is manufactured through the same company. The first brand would be the premium one, and the second one targeted for the low-end segments.

The rationale for doing this that different segments demand different products with different quality and price. So in order to avoid devaluating a brand and creating brand confusion, you decide to go for two of them. This is the strategy of many companies in the Fast Moving Consumer Goods (FMCG) Industry. The pros have been stated; the cons would be the amount of money you need to invest in brand awareness and positioning.

The second option would be to attack different segments with the same core brand and create subcategories to identify different qualities (e.g. Renault Clio + Renault Megane + Renault Laguna +…).

And the third one (which is more uncommon), is to go ahead with something like what you have with Cool by Sony, where:

• The manufacturer does not want to make a brand extension into lower segments.
• A second brand is therefore created.
• However, as long as the investment in branding does not pay off or we are not sure to position our new brand clearly (this is usually the case of mature markets)
• We go ahead with a hybrid solution like this.

Another current example that you can find is Logan by Renault.

As usual in Marketing, there is not an answer and therefore this post to share your views and experiences.

Do you think it will work? Are we in a similar case than the one that HP suffered with Apollo Printers (by HP)? Under which conditions would you go ahead with it?

Think Different!!!

Ignacio Gafo

PS: Sorry not to include a picture of COOL BY SONY. I have not been able to find it in the web. You can find it in the brochure from Miro Retail Store of October the 7th or in its stores.

Posted on 7 October 2007 in International Marketing, Branding

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