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I’ve been in public relations for over 15 years, and one of the biggest trends I’ve seen these days is one company, one enterprise, marketing itself as many separate entities, each with its own voice, brand, and online presence.
I’m not only talking about the big ones that have been around endlessly, with seemingly independent product lines that are a part of the same “empire,” like Nestlé, P&G, L’Oréal, and most recently Meta. I’m talking about the much smaller, independent clients that come across my desk in my boutique lifestyle companyThey, too, are increasingly adopting a multi-brand approach relatively than a single unified business identity, and in the process – each in their very own way, on their very own terms – are building their very own mini-empires.
Let’s take a closer look at why so many modern corporations select this alternative path.
One trunk vs. many branches
Think of traditional businesses as trees: when a growth initiative was launched, the idea was to strengthen the trunk, the central pillar of the business, to expand it so that it could turn out to be stronger and grow deeper roots among the goal customer base.
But the sprawling trunk is now not as attractive because it once was. Some emerging entrepreneurs now prefer to add branches to their company of origin—branches that may actually be far from the trunk, far enough away to bear their very own weight, be fed by their very own sources, and sprout their very own leaves.
It’s an approach that upends the traditional business model, not by eradicating parent corporations (there’s still only one ownership body), but by selecting to turn out to be known and promote themselves as separate offshoots that may exist on their very own. It’s essentially a strategy to maximizing market presenceand there are many explanation why so many corporations determine to implement it.
Reasons for creating separate brands
To illustrate why and how some corporations are adopting multi-branding as a substitute of centralized expansion, consider one of my clients, a fairly successful online retailer of girls’s sportswear. When it got here time to add a line of reusable water bottles… then casual shoes… then a limited line of leisurewear, that they had no interest in stamping all of their recent merchandise with the same logo, adding recent tabs to their site, and creating recent categories in their online store. Instead, they created individually named corporations for each recent enterprise (which they decided to call “partnerships”), each with its own legal entity.
It could be easier and more efficient to simply “add an extension” as a substitute of “break new ground,” but in their eyes, that wouldn’t be as effective or influential. In other words, “subsidiaries” are out; “curated” and “customized” brands designed to appeal to a specific audience are out. Here are eight explanation why:
1. Less competition
When you have multiple brands that operate independently (or at least appear to) in your industry, you reduce the competition in your sector, essentially competing with yourself. As opposed to having one well-known brand in your market, you have half a dozen, which essentially means more shelf space in a larger “shop” where you sell your goods.
2. Increased range
Likewise, by gaining more “square footage” in your market, by occupying extra space for multiple brands, you in turn gain a wider and broader reach among the people and places that provide exposure—namely, the media and news outlets that spread the word about a given outfit. Instead of one press release, each company has its own. Instead of one message, each brand sends its own messages and, as a result, establishes its own identity.
3. The Value of Diversity
When you divide your corporation into separate corporations, each one gets its own personality. That means a recent logo, a recent color palette, and a recent tagline for each separate branch of the tree you launch. “Variety is the spice of life,” they say, and the more looks and feels you have, the more likely you are to appeal to the tastes of each market segment.
4. Diverse workforce and suppliers
The advantages are not limited only to the external appearance of individual brands diversification. From inside, each recent enterprise you’re taking on could be assigned its own team and work with its own supply of suppliers. This allows you to hire specialists for the job, relatively than assigning recent duties to existing staff in which they might not excel. This allows you to mix the pool of materials and manufacturers—every little thing that applies to your corporation—specifically by brand. When you bring in recent talent, fresh perspectives, and individually designed business plans, you turn out to be a more expert and experienced machine with greater transactional leverage.
5. Avoiding the Unwanted “Corporate Climate”
Huge, powerful, and impersonal are now not a good look lately. People have begun to distrust Big Brother-style conglomerates in favor of smaller, more compact brands that promise more intimate, interactive experiences tailored to their needs and expectations. Bigger is now not higher. To avoid the dreaded judgment that they are simply a profit-hungry syndicate, fast-growing entrepreneurs now feed their individual offspring, relatively than feeding the parent company’s fame in the industry. Most of the time, buyers don’t even know (or need to know) that all of them live in the same household.
6. Possibility to reach chosen customers
One large company tries to reach a large customer base by throwing as much as they will at the table and hoping that a large number of consumers will devour it. But one large company, divided into self-sustaining offshoots, can branch out in any way they need. For example, one of my clients produces nine product lines, each completely independent of the other. But only one of those lines promotes itself as completely vegan. That brand will attract much more attention from the minority vegan population. At the same time, the other eight do not lose any of the potential non-vegan majority markets.
7. The advantage of “playing on different tracks”
Imagine a bowling alley. If a multi-lane business has 10 pins and one of them gets knocked over, all the others can fall with it. But if you set each brand on its own lane and one of those brands takes a hitthe remaining nine can remain completely straight and intact, without any collateral damage. You may even close the entire lane without affecting the others.
8. Legal and financial aspects
Finally, without delving into what is in fact a complex issue that deserves its own discussion, organising separate LLCs for, say, each subsidiary offers a lot of protection each legally and financially. The low-profit arm of the business is not in the same tax bracket as the high-profit arm. You may even be classified as a nonprofit. Compensation is based on the individual company structure, not on a single corporate organizational structure. If one brand gets sued, only that brand gets sued. The list goes on.
Suffice it to say that corporations won’t go to the trouble of making all types of separate entities just for the marketing opportunity. There are many legal and financial considerations that may make the option of individual corporations or partnerships worthwhile.
The final word on the multi-company approach
It all comes down to increased visibility. In our current era of influencers and followers, how many eyes you have on you matters the most. Visibility is what drives the current market, and a multi-brand strategy, pure and easy, increases visibility.
It does this by spreading the enterprise across multiple playing fields in multiple locations to engage more participants. It does this by positioning the enterprise not as a dangerous conglomerate threatening to turn out to be a monopoly, but by separating itself into distinct and different pieces of pie with different flavors. It’s about interacting with the largest group of individuals on the largest variety of platforms. And it isn’t just about the likely way forward for empire building. It’s quite possibly the recent model of empire building.