The first branding strategy decision is whether to develop a brand name for a product. Today, branding is such a strong force that hardly anything goes unbranded. So called commodities do not remain commodities. A commodity is a product presumably so basic that it cannot be physically differentiated in the minds of consumers. Over the years, a number of products that at one time were seen as essentially commodities have become highly differentiated as strong brands have emerged in the category. Some notable examples with brand pioneers in parentheses are: coffee (Maxwell House), bath soap (Ivory), flour (Gold Medal), beer (Budweiser), oatmeal (Quaker), pickles (Vlasic), bananas (Chiquita), pineapples (Dole), and even salt (Morton).
Assuming a firm decides to brand its products or services, it must then choose which brand names to use. Four general strategies are often used:
* Individual names: This policy is followed by General Mills (Bisquick, Gold Medal flour, Nature Valley granola bars, Old El Paso Mexican foods, Pop Secret popcorn, Wheaties cereal, and Yoplait yogurt). A major advantage of an individual names strategy is that the company does not tie its reputation to the product. If the product fails or appears to have low quality, the companyâ€™s name or image is not hurt. Companies often use different brand names for different quality lines within the same product class. Delta branded its low fare air carrier Song in part to protect the equity of its Delta Airlines brand.
* Blanket family names: This policy is followed by Heinz and General Electric. A blanket family name also has advantage. Development cost is less because there is no need for â€œnameâ€? research or heavy advertising expenditures to create brand-name recognition. Furthermore, sales of the new product are likely to be strong if the manufacturerâ€™s name is good. Campbellâ€™s introduce new soups under its brand with extreme simplicity and achieves instant recognition.
* Separate family names for all products: This policy is followed by Sears (Kenmore for appliances, Craftsman for tools, and Homart for major home installations). If a company produces quite different products, it is not desirable to use one blanket family name. Swift and company developed separate family names for its hams (Premium) and fertilizers (Vigoro).
* Corporate name combined with individual product names: This sub-branding policy is followed by Kellogg (Kelloggâ€™s Rice Krispies, Kelloggâ€™s Raisin Bran, and Kelloggâ€™s Corn Flakes), as well as Honda, Sony, and Hewlett-Packard. The company name legitimizes, and the individual name individualizes, the new product.
The first two strategies are sometimes referred to as a â€œhouse of brandsâ€? and a â€œbranded house,â€? respectively and can be seen as representing two ends of a brand relationship continuum, with the latter two strategies as being in between and combinations of the two. Two key components of virtually any branding strategy are brand extensions and brand portfolios.