Searing brands

Procter & Gamble, the company that gave birth to the very idea of brand management, has embarked anew on an endeavor where it seeks to leave its parental imprimatur on its numerous progeny. The Financial Times reports on a recent company wide initiative on British television to "recognize, celebrate and thank" mothers when, per the FT report, the real motive was "to showcase the US consumer goods group as parent to 50 household brands, such as Ariel detergent and Duracell batteries." The article notes that it is the first time that P&G had sought to link its name to its many products in the UK making it "something of a laggard". The long acknowledged leader in that area has been Nestlé S.A. of Switzerland which has been using its name across its some 6000 odd brands for over two decades.

The FT report notes that  the proponents of corporate branding "say it is a means of transferring all the good qualities of trust and reliability across an entire portfolio, be it from chocolate bars to cat-food or stock cubes to face creams." Maybe so, but the Swiss food behemoth has stumbled on more than one occasion in its zeal to stamp its brand on its product and beyond as was the case a couple of years ago in China. In a near Goebbelsian effort at searing its name on consumers quite literally from infancy onwards, Nestle set about "branding" babies at birth in some Chinese hospitals with wrist bands with the company's name and logo on.

Proponents of the latest efforts at "parenting" brands by P&G, Nestlé and consumer giant Unilver hope that the new initiatives will bring about "advantages (that) spill over beyond relationships with consumers to retailers and even employees.  The FT says that "P&G’s own research in other markets would certainly appear to bear this out. It claims that similar corporate branding ads in the US, China, France and Brazil helped consumers understand the link between P&G and its individual brands and as a result increased their propensity to buy its products." An ancillary and perhaps also significant benefit according to some agencies is that "a corporate brand is the best platform to help monetise more touchy-feely initiatives, be it sustainable sourcing, helping farmers in emerging markets or donating part of profits to clean water supplies in Africa."

Recently, service industries such as airlines and hotels too have had their share of corporates seeking to promote the umbrella parent brand. Wyndham, a relatively new moniker for a collection of a range of hospitality products in virtually every segment of the hotel industry is actively promoted along with the progeny's brand. French lodging giant Accor has been doing the same for decades and has certainly reaped handsome dividends through, if nothing else, by cross selling and being all things hospitality to consumers across economic lines. India's Jet Airways has for some years now offered economy (Jet Konnect) and "full service" brands often on the same sector.

The move by such majors across industries to assert parentage  is nevertheless fraught with perils should something go wrong with any one of the offsprings or even the parent. Such was the case with Toyota not so long ago. A misstep of the kind that happened to the Japanese car giant can (and did) have repercussions across all brands owned by the "parent". As the FT article noted it "can just so easily backfire and tarnish the whole portfolio if something goes wrong as happened with Toyota, the world’s biggest carmaker by sales, when it suffered a mass recall last year."  Another potential downside is when the "children" are spun off as part of corporate divestitures and the succeeding entity stumbles in delivery and service while consumers continue to associate the brand with the erstwhile parent. It may well be better to ensure the health and vigor of each product or service rather than let them ride on the coattails of the parent. Human parents of successful offsprings could perhaps attest to that.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.