Live Issue: Do ‘black sheep’ subs affect parent brands?

Jagadeesh Krishnamurthy finds out what happens to the equity of brands when sub-brands fall on bad days

Live Issue: Do ‘black sheep’ subs affect parent brands?

P&G embarked on its ‘Thank You, Mom’ global campaign surrounding the Olympics in a bid to showcase the several successful brands under its roster. Closer home, companies like Murugappa Group and Aditya Birla Group have been rolling out campaigns that focus on the parent brand. While the benefits of building an umbrella brand are quite obvious, there will be always be the other side of the coin where the negativity surrounding another sub-brand could well impact other sub-brands under the same parent.

“There is a line of thinking about why do you want to lead with the corporate brand where you can have a situation where one of the brands might have issues that would affect another. I think that the more enlightened perspective is that a strong corporate brand can be a strong halo for any number of product brands. You cannot really hide from that fact anymore because consumers are more savvy today than before and they know if the company is the maker of this or other brand,” says Glenn Osaki, president, MSLGroup Asia. 

Arun Iyer, national creative director, Lowe Lintas, points out that umbrella branding works in two ways. He explains, “One, when the corporate brand wants to announce that they own all these successful product brands, and secondly, when there is a relatively new product brand that requires the support of the corporate brand to establish itself as a bigger brand.”

Highlighting the case of Kingfisher (where the airline brand is in financial trouble), Ramanujam Sridhar, chief executive officer, brand-comm observes that when things were fine, they were tying together their disparate businesses with ‘King of Good Times’. He adds, “Whatever businesses they were into – be it the alcoholic beverage, airline or even the cricket team, it somehow fell into the philosophy of ‘You have a good time with the brand’.” Sridhar believes that the problem surrounding the brand is not intense here, as the beer drinker is very different from the Kingfisher flyer. There might not be a major overlap.

Meanwhile, Sanjay Tripathy, executive vice president - head marketing, products and direct channels, HDFC Life, points out, “When you are promoting a parent brand, the sub brands definitely get benefits, especially when there is a direct linkage between the two. Though Kingfisher and Royal Challengers are different brands, the common linkage is Vijay Mallya, and he is the brand connecting all the sub brands. Both the personal brand and the company brand rubs off on each other. So, if one of the brands is not doing well, it is bound to impact the other.” He was also quick to point out that in this case the sales of beer are not bound to be affected by the negativity surrounding the airline business as the former is present in a completely different category and the brand has been established over many years.   

Sharing a similar point of view, Lowe Linta’s Iyer says, “I don’t think the problems Kingfisher Airlines face will affect the beer brand. The beer brand has been built on taste over the years, and so I don’t think people are going to suddenly going to stop drinking it because there is a problem with the airlines. I don’t think, in this specific case, it will impact at all.”

Pratap Bose, chief operating officer, DDB Mudra Group, points out that beer becomes an impulse purchase if the consumer loves that brand. “However, the implication can just be the reverse when the circumstances (surrounding the negativity) are different at the parent company level. For instance, when a brand that I use is embroiled in a controversy surrounding animal cruelty, then as a person who is an environmental activist, morally I can feel disgusted with the product and the whole branding and valuation of the brand goes for a toss.”



PR agency head

Glenn Osaki, president, MSLGroup Asia

“I don’t think that fear of something happening negatively on one brand is a reason not to support the corporate brand. Because, in reality, if there is an issue that’s happening and people know it is from a corporate brand that I know and trust, they will be a little bit more forgiving. So, you really cannot lose by building a strong corporate brand and in those instances that you have crisis is when you need that extra halo.”



Media agency head

Pratap Bose, chief executive officer, DDB Mudra Group

“One situation can be where the mother brand is going in for a new brand identity that is overarching, and enveloping the other brands might be a positive step because the equity of the mother brand far outweighs the small brand, and therefore the credibility of the smaller brand becomes bigger and better. You could also have a situation where the sub brand is stronger than the mother brand, and therefore any blanket branding attempt at a corporate level sometimes doesn’t rub off well on the smaller brand. ”



Creative agency head

Arun Iyer, national creative director, Lowe Lintas

“Any negativity surrounding the product brand is definitely going to rub off on the group company too. There is no running away from that. And, the converse is also true. So, for instance, if there is a big corporate group which has a lot of stature and respect, sometimes one could use the existing values to correct the problems that have come into the brand.”



Brand consultat

Ramanujam Sridhar, chief executive officer, Brand-Comm

“It all depends on your overall brand strategy. In the sense that, there is clearly a determined effort to build the brand before you get into the line extensions. Normally consumers don’t really care for the company of origin simply because,  for them the brand has its own equity, value and importance in their lives.

The larger reason for corporate signoffs during ads for sub  brands is to help them reach out to the investors community.”




Sanjay Tripathy, EVP - head marketing, HDFC Life

“It is important for every brand to create stronger relationships with the customer, as it  will mitigate the risk of the negative rub off from the other brand. Every brand has to stand on its own. Being under an umbrella brand has its own advantages, but the idea is to use the parent brand’s values to strengthen the brand in the initial phases yet be independent. This will immensely help during a crisis when the concerned brand can stand on its own right.”

Campaign India

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