Single serving, double helping?

Less is more. So say mono brand proponents who've been keeping a close eye on the back page of the business press. Ford has streamlined its market-specific manufacturing platforms and model names, while Aviva's decision to ditch the longstanding Norwich Union, one of the UK's biggest insurance houses, and rebrand as the parent company is telling. Not to mention a few other brand houses who have similarly slimmed down ahead of summer.
Single serving, double helping? - Brand UnionWhile we're seeing a number of companies - both locally and abroad - decluttering their brand portfolios, pared down to a single brand, it pays to remember that as different rules apply to different board games, so too for different board rooms. And the same model can't be applied across the board.

A trivial pursuit? Or the start of a mono-poly?

By and large a CEO's list of goals, mine included, reads something like this:
• Up shareholders' value and top-line revenue growth
• Reduce waste and inefficiency
• Build corporate reputation
• Speed time to market and to impact
• Enterprise transformation

And while the hefty contribution a brand can make to the above is unquestionable, a single brand strategy, some argue, will help them win the game. So, do mono brand strategies have multiple advantages? Will they be a singular success?

Corporate image
Responding to increasingly choosy - even sceptical - consumers, some companies are paring down to a single brand to increase the visibility of the parent for transparency, accountability and credibility. Who's the real face behind the message? The purveyor of the product? The real pocket behind each brand's price tag? Your consumers want to know.

But more than just a feel-good factor, there's a compelling business case too.

Mono brand proponents argue that organisations who replicate the corporate brand at the market level can build stronger corporate reputations than multi-branded ones. So believes Altech who's pulled back the curtains on the family tree with the now cobranded Altech Netstar and Altech Autopage Cellular. Barloworld too is now more than just a behind-the-scenes holding company that lives in annual reports and has stepped into the spotlight with Barloworld Logistics as it brings the parent's value set to the fore.

Stretching your marketing spend
Executed well, it makes sense (and cents) that a mono brand strategy boosts economies of scale, particularly in the area of marketing spend, not to mention trade-marking and licencing. Mono brands, through singular purpose and clarity, can design consistent marketing processes that execute better, react to threats faster and exploit market windows, while transcending boundaries and responding in real time.

Apart from optimising spend across multiple markets through economies of scale, one well-chosen name can help you leapfrog geographical and cultural boundaries that many names can't. The Sharks rugby team, for example, is a sports franchise that's tackled the regional limitations of its previous identity, the Natal Rugby board, enabling widespread support from a far wider diversity of fans, not to mention players.

While multi-brand loyalists might argue that in destroying existing equity, you risk haemorrhaging customers, we propose that single brands can expect an upturn. Merging Volkskas, Allied, Trust Bank and United seemed an almost farcical idea when considering their vastly different constituencies - traditional Afrikaans farming communities, the Afrikaans business sector, English business groups and individuals, with a very real concern of major fall-out. The proof is in the pudding and Absa, voted tops in last year's Sunday Times Markinor survey, is a case study on a phenomenally successful bank that operates across all segment restrictions with a single identity.

Because change does not happen overnight. Rebrand by Shock & Awe is a thing of the past as most companies have learned that it takes consumer buy-in over a period of time through carefully seeded communication. Further, while exit barriers like switching accounts have become easier, basic idleness has coaxed customers into giving change the benefit of the doubt and trying it out.

Having taken another bold brand step, today Absa is a member of the Barclays Group. This endorsement is a considered way of retaining the incredible brand equity Absa has developed over the years, while assuring its customer base of the bank's heritage, now married with the worldwide reach, international credibility and expertise of Barclays.

Enterprise transformation
In today's climate of bountiful mergers & acquisitions and resultant “rainbow nation” family albums, there is a compelling case for rationalising brands.

Mono brands can build stronger cultures than multi-branded enterprises. By streamlining internal processes, disparate employees will now be capable of coming together as a single team on the back of a powerfully unified brand, and a strong employer brand benefits the company's ability to retain and attract talent.

Our international footprint and global client needs underpinned our decision to rebrand from Enterprise IG to The Brand Union last year, allowing us to streamline our internal processes and methodologies and more easily transfer staff and skills between our 22 offices. “The Brand Union” not only pays tribute to our reach, but binds together our consultants and designers across the globe through common culture and process.

Top-line growth is the bottom line
But what of the cost, FDs and guardians of the coffers cry? Rebranding is not nearly as costly as one might have thought. Again, most rebranding doesn't happen overnight but part of a needs-based stock replacement or phasing-out of existing marketing collateral spend. In favour of avoiding waste, customers can be quite forgiving if they see remnants of the old brand for a time, so long as the change has been carefully communicated and the customer engaged.

According to Standard & Poor's 500 index, organisations with single global brand strategies outperform those with multi-brand strategies, with share prices outstripping the market's. Undiluted trust engendered in undiluted brands gives you significant competitive advantage and familiarity leads to favourability worldwide.

A singular success?
But, where your eggs are all in one basket, tread carefully. While this move has tremendous advantages, it is not without risk, of course. If something goes wrong, the damage can spread quicker than a Free State veld fire.

So yes, paring down could be a very costly move and is an educated gamble. But you stand to gain far more in the long term if it works. And having said as much, we are in no way implying a one-size-fits-all strategy. The benefits of simplification are clear, but not universal.

FMCG is a different ball game all together and the category where, arguably, brand contributes the most. You don't buy a razor because its Proctor & Gamble, you buy it because it's Gilette. You don't buy a beer because it's SABMiller, you buy it because it's Hansa. But that's a story for another day over a beer.

Don't dilute your equity across so many different brands if you have substantial strength in one. Do your homework and select the best game plan.

13 Aug 2009 10:49


About the author

Anthony Swart is the CEO of The Brand Union in Africa. A deeply rooted African, with decades of experience in branding and marketing, Anthony has a passion for developing this continent and its brands, and a vision to help grow indigenous African brands to achieve their full potential.

He has a Bachelor of Arts in Industrial Psychology, and an MBA focussing on truth in brand promise.

Anthony is married with three children, two Rottweilers, two cats, four fish, a hamster and a Senegalese parrot.