Social networks and branding: the benefits of an umbrella brand

Social networks and branding: the benefits of an umbrella brand

A prominent fact about social media marketing is the fact that markets move very fast. Social networks create a large scale. Scale creates the high speed found in contemporary markets. The way social media brands are created is that a product is positioned first. The scale of the market makes it evolve. This means that the product is repositioned. As the brand continues, repositioning creates a new positioning.

The way the early automobile industry was called is an example. Two great giants of this era were Henry Ford of the Ford Motor Company and Billy Durant who created General Motors. Both understood that the original market would depend on the low price. Durant also felt that the low price should also have variant branding to target different groups. Henry thought price was the key and created a world-class brand in the Model T. For a while, Henry’s gamble was the right one.

The market evolved over time. As the 1910s progressed, a middle class developed. With more resources available, people began to want more than just a low price on a car. The variation in revenue created different goals for the car. This created the need for the car to be marked in different ways. Fortunately, for GM, Billy Durant had created these different brands. In the General Motors model, the Chevy was the entry level for low-income people. Ponitac was next level. This is for people starting a job and starting to receive early career promotions. For the mature middle run there is the Oldsmobile. For those people who know that the Buick is on the fast track. Finally, for the people who made it, there’s the Cadillac.

I believe that the GM model is the model that modern social marketing should follow. Different income groups define their products differently. Brands help them define themselves. This is the beginning of what is called the “umbrella” brand. These are several brands of the same product, under the roof of one company. It is this strategy that allowed General Motors to overcome a seemingly insurmountable lead held by Ford in the 1920s to become the preeminent brand in automobiles. What are the benefits of having an umbrella brand relative to just having a big brand like Model T?

As in the case of General Motors, a big benefit is MARKET GROWTH. There is strength in numbers. With many brands, such as the GM family, there is an ongoing commitment to the General Motors brand, rather than the singular General Motors “car.” As in the case of GM, no one brand can control the entire market. This is the genius of Albert Sloan. It was Albert Sloan who taught marketers the importance of targeting, segmentation, differentiation, and branding. This is in stark contrast to Mr. Ford’s claim that he can be any color he wants as long as it is black.

Multi-brands PREVENTS BRAND EXTENSION. In 1923 there were many automobile companies, most with only one make. By having multiple brands, Mr. Sloan was able to consolidate the market and discourage smaller and struggling companies from extending their brand and exiting the market, allowing General Motors to focus on Ford.

Multi-brand PROTECTS THE BRAND IMAGE. Everyone knows that Chevy, Ponitac, Olds, Buick, and Cadillac were General Motor brands. Each of the cars contributed to the image of GM. Ford’s singular branding on the Model T worked against Ford. Because he only had one brand, Mr. Sloan was able to portray the Model T as a brand “built by farmers for farmers.”

Dean Hambleton

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