If you are in the process of adding a new service or product, do you introduce it into the market under your existing brand or do you market it under a completely new brand? The reasons for creating a new brand may be valid, but then again, they may not. For instance, creating a new logo takes a few weeks at most, but establishing a new brand can take years. And there is no guarantee of success. Also, when we talk of years, we also mean spending all those additional resources to ensure that the perceptions formed by the customers truly reflect the brand’s values. So the greatest problem with launching a new brand is that it has to be built from ground up.
Let’s look at the advantages of introducing your new product or service under your existing brand. The biggest advantage is that all the hard work has been done. All you need to do is to have your product or service ride on it. Also, managing just one brand is so much easier than two. There are some other possible benefits – rationalization of your marketing dollars, greater operational efficiencies as well as utilization of the same distribution channels. However, there are definitely times when a new brand becomes necessary. Otherwise, things may actually end up being detrimental to the existing brand. So when does it make sense to add a brand?
The biggest reason for adding a new brand is that the product or service is very different from the existing one. Another very valid reason is if your company is entering another geographical market such as a different country. Cultural sensitivities may necessitate bringing in a new brand as well. If market segments are very different, it might make sense to offer a new brand to prevent alienating customers from either segment. In such cases, the need to create new brands far outweighs the costs of starting from scratch and as pointed above, can preserve the sanctity of the existing brands as well. Hence, when it comes to a decision about adding brands, it is best done on a case by case basis.
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