What Is a Multi-Brand Strategy? Definition and Tips

By Indeed Editorial Team

Published June 1, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

If you have an established brand that customers trust but you want to expand your business even more, consider creating and marketing even more brands. A multi-brand strategy is a company's plan for marketing multiple, distinct brands to customers. Implementing a multi-brand strategy can allow a business to better serve customer needs and increase sales. In this article, we discuss multi-brand strategies, explain their elements and advantages and provide tips for creating a multi-brand strategy that is perfect for your business.

What is a multi-brand strategy?

A multi-brand strategy is a company's method for creating, shaping and advertising its different brands. By having a portfolio of brands, a company can offer products with unique features and purposes, provide customers with a diversity of choices and target particular audiences or sections of the market. For example, a makeup company that wants to provide both affordable and luxury products can market them under different brand names to appeal to different customer tastes and priorities.

Larger, more established corporations typically have the money and power to implement multi-brand strategies. Since a company usually specializes in a certain industry, it often has the capability of making a wide variety of similar products. For example, a company that makes shampoo and conditioner may have factors of production such as factories, labor force and materials to make other hygiene products, such as lotions, skin care products and sunscreen. It may choose to market different products under multiple brand names to restrict competition, diversify its revenue streams and increase its market share.

Related: 17 Marketing Strategies (With Examples)

Elements of a multi-brand strategy

A company should consider certain factors about each of the brands in its multi-brand strategy, including the brand's purpose, target audiences and distinction from the competition. A successful brand provides exceptional products and services that solve customer problems and meet customer desires. Here are some important elements of a multi-brand strategy:

  • Goal: A multi-brand strategy helps a business reach a certain goal, whether it is functional, which helps the business make more money, or intentional, which helps others. Deciding on a goal when planning a multi-brand strategy can help a company conduct thoughtful and purposeful marketing and sales.

  • Consistency: If a company's brands in its multi-brand strategy are consistent in their quality, images and purposes, customers can have an easier time recognizing and remembering them. Keeping multiple brands consistent can also help differentiate them from each other and avoid customer confusion.

  • Aesthetics: Aesthetics, or visual designs, are an important part of creating and maintaining a multi-brand strategy. Making sure their brands are visually distinctive and iconic can help customers understand the differences and avoid confusion.

  • Emotion: Brands in a multi-brand strategy can appeal to different emotions to attract different audiences. For example, one of a company's brands may be more eco-friendly, which can appeal to customers' feelings about protecting the environment.

  • Flexibility: In a multi-brand strategy, just like a regular brand strategy, it's important for a business to remain creative, solve problems, adapt to change and stay relevant. This means updating marketing strategies, products and services to keep up with current trends and new technologies.

Related: What is Brand Identity and How to Build Your Brand

Advantages of a multi-brand strategy

Implementing a multi-brand strategy can be an exciting way for a business to expand and discover new markets. Here are some advantages to this marketing method:

Brand reputability

Creating and marketing multiple brands can increase brand visibility and awareness. This means a company's products are taking up more shelf space and filling up more advertisements, causing customers to see them more. The more a brand is visible, the more likely it is for customers to trust it. Brand awareness can increase the respectability of a brand and its parent company. Ensuring brands in a multi-brand strategy have consistent messaging and high-quality products can allow a business to build a loyal following for their brands.

Read more: Effective Reputation Management

Increase in employees

In order to adequately manage the marketing and sales operations of multiple brands, including product and logo design, a business may need to hire new employees. Hiring new employees can stimulate economic activity, foster creativity and ultimately grow a business. A multi-brand strategy can even promote a friendly internal competition between managers of brands that work for a company.

Related: How To Support Your Team

Diversification

Implementing a multi-brand strategy can be a way for a company to diversify its business. Diversification is when a company spreads out financial risk. Multiple brands function as multiple avenues for cash flow, and a business doesn't have to depend on just one. If a company has multiple brands and one of them has an issue, it usually doesn't affect its other brands. In this way, diversifying through brands can help a business maintain a positive reputation in its market.

Related: Product Diversification: Definition, Stages, Benefits and Examples

Market leadership

A multi-brand strategy can help a company become a market leader or a company that outsells its competitors. Multiple brands take up more shelf space in stores and can restrict the space other companies have to show their products, which restricts competition. Having more brands than other companies can mean that customers are more likely to choose one company's products. If a business expands and diversifies its products and services, it can also learn new and better production methods and become a model of best practices in its industry.

More customers

If a business creates brands that serve different customer needs, they can gain new and more customers. These can be audiences with differing incomes, ages, cultures, tastes and values. For example, some customers prefer products that are eco-friendly, vegan or all-natural. Multiple brands provide customers with options that have special features and benefits. Businesses can also use multi-brand strategies to cater to customers who like to "brand hop" or try different brands to find the best one.

Related: What Is Customer Care? (With Examples)

Tips for creating a multi-brand strategy

There are many steps a business can take to create a multi-brand strategy that is successful, including:

  • Check your capabilities. Before creating a multi-brand strategy, make sure to check that you have enough resources to invest time, effort and money into marketing separate brands. If you're a new business, it may be a good idea to establish one brand and focus on building customer loyalty before expanding.

  • Make a goal. Making a goal for your multi-brand strategy can help you keep track of your progress. Keep your goal in mind throughout the marketing process to make sure your work is results-driven.

  • Choose your brand's values. Customers often respond positively if a brand has clear principles, beliefs and values. Creating a mission statement where you state your brand's purpose to, for example, help communities or protect the environment can attract customers to your brand.

  • Be honest. Make sure to be transparent about all the brands in your multi-brand strategy. Be honest about each product's features and contents to gain customer trust.

  • Focus on a brand's niche. With so many brands, it is a good idea to make it clear to customers what differentiates them. Emphasize the unique characteristics of each brand and the particular benefits it can bring to customers.

  • Build your brand. Build each brand by applying it to a logo, social media page, business cards, employee uniforms, office walls, billboards and other materials. These types of marketing can help a brand look official and ensure customers don't get confused between different brands.

  • Conduct competitor analysis. Competitor analysis is the assessment of the strengths and weaknesses of real and potential competitors to a company. Conducting this analysis can help a business understand possible barriers to success and how to overcome them.

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