Protect your identity! This is the imperative that branding agencies drill into their clients. Brand identity is a key driver in building consumers’ brand perceptions and contributes to brand equity. Brand equity is the value derived from consumer perception of the brand rather than from the product or service itself. High brand equity can translate to higher sales volumes, profitability and selling price if a brand or company is sold. Here are a couple of examples to demonstrate the importance of brand equity:
- The Coca-Cola brand alone is estimated to be worth $83.8 billion.
- The Mercedes-Benz brand alone is estimated to be worth $21.79 billion (1).
Brand identity encompasses the overall look and feel of the brand, from marketing communications to packaging and product design to retail locations. A central, and arguably the most important, element of the brand identity is the brand logo. Below are summaries of how three leading companies have chosen to manage their brand identities.
Daimler Group: Completely Separate Brands
Daimler Group owns Mercedes-Benz, one of the world’s most respected luxury brands. It also owns Smart – an entry-level economy car. These two brands have completely different identities with no common identifier. Let’s take a look at some of the reasons why it makes sense for these to be separate brands.
The lineup of Mercedes-Benz automobiles covers a wide range, from entry-level models starting around $31,000 through top-of-the-line AMG models that top out around $264,000 when loaded with optional features. By contrast, Smart starts at $14,650 and tops out around $20,000. While there may be some overlap in potential target buyers of low-end Mercedes-Benz and high-end Smart models, it is probably a safe assumption that the vast majority of the brands’ target audiences do not overlap.
Beyond their varying levels of price sensitivity, I would argue that there is an even greater disconnect in the consumer’s self-expressive benefits of driving Mercedes-Benz versus Smart. The tag lines for each of these brands are good indicators of how their respective owners probably like to be seen.
Mercedes-Benz: The Best or Nothing
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Smart: Urban Mobility Has Evolved
Putting a Mercedes-Benz badge on a Smart car would dilute the luxury status of the Mercedes brand. On the flip side, an economy-level Mercedes-Benz is not likely to resonate with consumers who view themselves as evolved urbanites. Completely separate identities allow each brand to maintain its distinct brand position and brand promise to its target audience.
Nike: Sub-Brand With Master Brand as Endorser
A second example of brand identity management is Nike’s Tiger Woods brand. Nike has a very strong brand and highly recognized brand identity. It also has a long history of sponsoring professional athletes. When Nike inked its deal with Tiger Woods, Nike’s golf line was in its infancy. In this instance Nike took the approach of creating a separate identity for the Tiger Woods brand, with the Nike “swoosh” as more of an endorser brand. The result gave Nike’s golf line credibility by putting the emphasis on the fact that the (then) best golfer in the world used their products. Their approach paid off in the apparel segment as Nike Golf is one of the leading golf apparel lines in the world.
Of course, branding that relies on a single person can have its own pitfalls – as evidenced by Tiger Woods’ descent from his personal and professional pinnacle. On the one hand, Tiger’s current reputation has likely diminished the value of the Tiger Woods brand within Nike. However, the degree of branding separation has probably insulated the Nike brand as a whole from negative perceptions of Tiger Woods.
Oakley: Same Master Brand With Multiple Identities to Resonate With Different Audiences
Oakley, now owned by Luxottica Group S.p.A., is probably best known for sunglasses, although Oakley started out by selling motorcycle grips made from a patented material. They soon began selling goggles and sport sunglasses. Today Oakley sells sunglasses, goggles, apparel and accessories in sport and lifestyle segments. Some of Oakley’s segments are very different from each other. For example, women’s lifestyle sunglasses have a completely separate look and feel from the men’s street and skate apparel.
Oakley has chosen to use multiple logo versions at the same time. They all draw on Oakley’s primary logo below, the easily recognized stylized “O.” That logo can be found across the spectrum of product types and styles.
Some female-oriented products feature the script logo that has an adaptation of the Oakley “O” and a more feminine, but not too girly, script font for the remainder of the product name.
A third logo is more geared toward the men’s skate and street segment. It also has an adaptation of the “O,” but in this case the mark is more squared off and masculine-feeling.
While the target audiences for each of these logos are different, they have enough in common to justify using the same brand name. After all, Oakley buyers are all retail consumers of high-quality products that blend performance and fashion. These logos support the overall brand identity, yet the customization adds appeal to specific target audiences.
As demonstrated by these examples, there is no one right way of protecting brand identity. A company’s overarching brand strategy should guide the brand architecture and decisions on how to market the products or services in a company’s portfolio. Growth, market clarity and brand protection all factor into determining the most appropriate brand architecture. Here are some of the questions to consider:
- Perceptions of the master brand. Is there a strong master brand that already resonates with target audiences? Or is there a need to create a sub-brand that is more suited to a particular target audience and/or product offering?
- Similarity of target audiences. Will the same people be exposed to the different brand identities? And do you want them to know the brands originate from the same company? Will the architecture make sense to the customers/the market?
- Differences in price point or brand promise. Is the master or existing brand at a price point that is much higher or lower than the potential sub-brand? Do the products have very different or unique value propositions? Can the sub-brands help support each other?
The list above is not exhaustive, but if you ask yourself these questions, the answers will help guide the brand architecture.