Published by MBA Skool Team, Published on June 19, 2011
What is the common between brands D’Cold, Moov or itchguard. They come from the same company, Paras Pharma ltd. Consider another brand Mr. Muscle, it comes from company called SC Johnson. Most of the people are aware of the brands but very few people know the name of the company which these brands come from. This is what separates product branding from corporate branding.
In product branding strategy, the product works as a promise to the customers, who will achieve special qualities by using the product than when using a similar kind of branded or non-branded product. Through its product/s, the company normally sends a message to its customer that by using its product/s one can not only attain satisfaction in terms of quality, but also achieve a higher social class. So to say, the product could be used to communicate and relate to a particular segment of society.
The product stands distinct from the company and the consumer relates to the product rather than the company. Any incident that tarnishes the company’s image does not affect the product’s image. For example company’s CEO may get accused of assault or bad behavior on fellow co-workers. This may lead to dramatic drop in company’s image but will not affect the product sales as people do not associate the company with the product.
Corporate branding on the other hand uses company’s name as a product brand name. It tries to create product brand recognition by leveraging corporate brand equity. LIC is a typical example of corporate branding, where each of its products are marketed under LIC brand, for example LIC’s Komal Jeevan, etc. Asian Paints which used to follow product branding earlier with its products like tractor emulsion, ace, have recent brands like Asian Paints Royale, Asian Paints Utsaav having advertisements leveraging brand Asian Paints rather than individual products. The flip side of corporate branding is that if the quality of one product in the brand family is compromised, it could reduce sales of all the others. Corporate branding can take advantages of economies of scope by using one advertisement for several products. In case of new product launched by company, it can lead to faster acceptance by the target audience as the people are already familiar with the family name. A corporate branding strategy is generally useful when the company is already established brand in the market and people trust that brand. One of the trusted brands in Indian Market is Tatas which have multiple brands in multiple sectors leveraging the brand Tata. Often established companies, especially in technology segment, launch products of either little or no innovation, without meaningful features in the consumers’ eyes. Consumers will associate the ‘lesser’ products with the company brand and hence they will be more receptive to the marketing message.
Drawback of corporate branding strategy is product may not be treated individually which may reduce focus on product’s unique characteristics. Also people may start relating company’s name with the product category. The biggest example of this is Xerox. People still refer photocopying as Xerox oblivious of the fact that Xerox is the company’s name.
Amul is a unique case where product and brand are the same. P&G, HUL and nestle, all of them use product based marketing. HUL and P&G are known for launching regional centric brands without any noticeable connection with its brand in other countries. They have following this mantra for more than fifty years. On the other hand, companies like Sony, Apple leverage their long established trust while communicating about their brands under one family.
Whether its product branding or corporate branding, its quality of product of that ultimately defines success of the product. Product branding or corporate branding are just strategies which strengthen the product positioning.
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