Should I have specific segmented brands or one brand that does all at different price levels?
All markets have different performance and cost needs. Should we have multiple product brands - i.e. low cost/low performance and mid/high or have one brand that can stretch across multiple performance levels and price according to options? It makes sense to economize the product manufacturing chain but, what is everyone's experience when consolidating a full portfolio into a single brand lineup?
Totally depends on your product and consumer behavior, like if you are selling t-shirts of different price levels, you need to create separate brands. Here you need to make the consumers brand savvy. But if you are selling service, you can go with one brand. The clients will look for quality and pricing comes later.
There's a saying: "When you market to everyone, you market to no one." Unless you are Coke, Pepsi, Tide...or Prilosec.
Some things to consider:
ONE who are your clients and what are they buying from you now?
In general, you can either: niche by customer profile (the brand serves the customer, and can have a wide variety of products: imagine a store for runners, or AARP). Or, you can niche by type of product/service, and have a product that serves a variety of customers at different price points: imagine a liquor store, or a jewelry superstore.
There's no right of wrong.
My personal preference is to continue to serve existing clients, getting to know them very well, and coming out with new products and services that they value. So, I prefer to niche by customer profile. That said, there is value in diversification, which is why I have 3 target markets. It is usually smart to avoid putting all your eggs in one basket.
TWO what is your/your company's skill set and sweet spot? Who are existing competitors and likely future competitors...and their offerings? Rarely do the two options listed in your question have similar margins. If you have had success with a low volume high margin brand, it's hard to imagine that you'd want to go to a high volume low margin product. It's a whole different animal, and the skill sets needed to start up and maintain each are different.
THREE consider whether or now there is any synergy between the possible products/market segments..or will one possibly hurt the other? With the internet and social media, it's very hard to keep brands/products out of view of customers and prospects. It's very helpful when there's at least some unifying theme or thread.
Hope this helps!
"The Business Quarterback"
There are advantages to highlighting price levels visually through package design when you have similar products under one brand. It is important to make it easy at retail for the customer to choose the right product for their needs. In most instances I recommend clients use one brand. There are instances when the brand image in one category would be harmful in another market segment or the packaging message doesn't work for every shopping area. Knowing the pain and what resonates with the different consumer markets goes a long way in directing whether you can use one brand across all segments or your need a sub-brand or market specific packaging. For instance, I have a client with a product that can be used by a diverse audience from home improvement to crafts. It needs unique packaging for at least two target audiences to properly call out the benefits. Trying to meet the needs of all waters down the impact and looses sales.
Hello Andrew, based on my observations, it is important that you first take a look at your potential market segments. A Brand is a very very powerful medium for your business to grow. It is what helps others identify themselves with you. So, to break it up be meaningless as it can diminish the cumulative effect which a single brand brings with it. What you can do is to sub-brand your products for different segments and let the parent brand be your overall business driver.
I advocates to view business in a business model manner, i.e. build of the business + the working model of each function (e.g. marketing, sales, finance, operation ...) + business environment (include customers + competitors).
Specific to this question, with the base understanding of the business model, I look my market in more detail to check whether it is sustainable. Than it is not the brand that matter, it is about whether your solutions (present and future) serve the market. From the different market segments, you may brand each segment differently if each segment has significant differences. However if there is not much differences between segments, you need to review the sensibility. In the nutshell, there is no certainty approach.
You should play the numbers to derive the NPV or expected value of different options (a single brand or multiple brands) so that you can form some expectations if you choose option 1, 2 or 3. With the numbers, scenarios, options, and your big picture of the business model, you will able to align your thinking from top to bottom, from past-present-future, and inside out.
To go from small to big a key strategy is often to establish a brand with a clear identity and purpose. Unless you are starting out trying to be a megabrand where you can have everything recognize consumers are going to connect to their experience with a product they buy not with all that you sell. You can also look at having parent/child kinds of identities with brands where if you establish a strong parent identity, (ie high quality professional) you can offshoot a child (lower market, etc). Trying to make a brand mean many things is really tough...keep it simple and if all products have a similar market identity then they will fit in a single portfolio.
Your Brand should solve a specific problem for a specific niche or class of people. If you have multiple visions/missions -- Like - you are a Health Coach --- and you sell your own brand of peanut butter -- those are separate brands. Within each separate brand - you should have a product funnel strategy that leads your target client up your product/service pricing structure. Normally people start off with free samples - to allow the target client to get to know you (like a first date). You may offer a complimentary discovery health session for your coaching; and free samples of your peanut butter for your other brand. Then you create some low, mid, high end offers for each separate brand.
If you only want to sell your coaching and peanut butter to High-Profile, Affluent clients (that's your target client) -- then you advertize, market and visit only the places where the High-Profile, Affluent people are. And your price points are selected to match the budgets of your target niche/clients.
Hi, it all depends on your products portfolio and targeted audience. Your offer might benefit with segmetation and after free initial offer, you could follow with accesible range and differentiate from VIP offer. Although your products might be similar, the added benefits are the key to distinguish the offer. So in simple words it makes sense to differentiate the products accordingly to their benefits and cost of production and brand every group of products for specific segment of market with a different name. When you try to establish brand communication funnel, don't forget to focus on one group of products at the time as different quality of low cost products might affect brand advocacy for premium customers.
Always from experience know your cost basis so a larger order can show a lower price without the quality being affected...Important that you know your costs and best lot size for pricing your products
Honestly, it would be irresponsible for someone to give advice either way. Its a really complex decision, and neither path is right or wrong. Depending on the product, the offering, the industry, the target market, and your business model the answer is going to change one way to another.
The simplest way of putting it is that if clients are going to buy multiple products from you in a single year, then don't segment the brand. If they are only going to convert on one in a few years or a lifetime, then it makes more sense to segment. But truly a lot more information is needed to give advice worth anything.