One of the questions that many companies grapple with is which level of branding they should use. The main choices are:
Corporate branding is where the corporate name is the brand, and here the products tend to be described more in alpha numeric or letter terms, and not have distinctive brand names. Such is the case with BMW. Corporate branding gives each product the strength of the corporate brand values and positioning, and saves a great deal on advertising and promotional spend. It builds up the strength of the corporate brand and its financial value. Corporate branding is very appropriate to those companies engaged in service industries, as their products are more intangible in nature. When consumers cannot see the product, the company brand name helps give them an assurance of quality, heritage, and authenticity.
Product branding is where each individual product has its own brand name and resources. With this strategy, the company name is either totally or virtually absent. It gives each brand the opportunity to have unique values, personality, identity and positioning. As a consequence, this approach implies that every new product the company brings on to the market is a new brand, and can be positioned precisely for a specific market segment. Product branding makes it easier for the company to evaluate brand performance and worth, and makes for better resource allocation decisions. Moreover, if the product is a flop, or is involved in a marketing disaster, the bad news does not attach itself to the company name. Product branding is costly though, as advertising and promotion costs cannot be shared, and its success depends on the product itself having a sustainable competitive advantage and clear positioning in the marketplace.
House or endorsement branding uses both ideas, and the corporate name is placed alongside the product brand name. This allows the product brand to assume its own identity and positioning, but draw strength from the values of the corporate brand, and give consumers the assurance, in many cases related to quality, of the corporate brand. There are a variety of ways in which this can be achieved, with the corporate brand in lesser or greater prominence. House branding helps with the introduction of new products, where it can be very difficult to break into mature markets without the endorsement of a strong and credible corporate parental brand name. One possible disadvantage is where the product is not favourably received and causes damage to the parental brand name.