SUB-BRANDS ARE TRICKY.

A pervasive part of branding and brand design is the sub-brand, and dealing with them is tricky at best. In many ways, creating a sub-brand is like getting into a fight with yourself. Let’s outline an example: a restaurant chain has been established for more than ten years, with quality recognition and customers willingly paying price premiums for the experience. Now, the chain wants to enter the fast casual sector, so they create a smaller version of their larger, more established restaurants. These smaller versions offer popular items from the original menu, at a cheaper price. In order to avoid confusion, the management team decides to append the word “Express” to the sub-brand name. Sounds like a plan, right?


Well yes, it’s a plan, but it’s fraught with customer confusion problems. Let’s go over them. The first is an issue with brand recognition—you would think it would be a good idea to take a well-established brand name and just add “Express” to separate it from the original while keeping the brand equity you've worked to build. But, really what this does is create confusion and dilute the original brand. The stark reality is that you can't have it both ways. This leads to a number of messaging problems and difficulty handling customer expectations. For example, taking popular menu items and putting them on the fast casual menu might seem like a good idea. But, that also creates issues because if we assume that the reason for the original brand’s success is the quality of their product, then in order for customers to be satisfied, the quality of the product offered in the sub-brand must at least meet the original. That’s a tough proposition when you have young cooks in the sub-brand, and experienced professionals in the original. Also, making the prices cheaper to mitigate the difference between the brands never makes up for the difference.


The answer in this situation is to create a completely different brand that carries a similar philosophy to the original brand. In other words, create a new name, different décor, and different offerings, but still keep the same spirit. You can then let public relations or even plain word-of-mouth make sure that people know that the original brand is behind it so that you can create the same endorsement without the confusion. This way, the new brand is free to be whatever it wants without the preloaded expectations of the original brand.


A good example of this can be found in Gap and its fellow Gap Inc. subsidiary, Old Navy. As Gap adopted a more upscale image in the 90s, Target responded by trying to rebrand as a less expensive alternative. Gap responded by creating Old Navy, whom no one would mistake for Gap “Lite” or Gap “Express” from a branding or product perspective. This is despite the fact that Old Navy stores started out as Gap Warehouse. That was quickly changed to avoid all the reasons I’ve stated in this article. These differences allow Gap Inc. the flexibility to manage pricing in Old Navy without having to worry about people making direct comparisons to the Gap. The bottom-line: it’s usually a good idea to treat sub-brands as completely separate ventures—in this crowded marketplace, trying to get customers to create subfolders in their heads is next to impossible.

 
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