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   krishna-agrawala Teacher
   Graduate School

   Multi-branding refers to the practice of one company having more that one brand for products in same category. Companies use multiple brands to satisfy the needs of and attract customers from different market segments. One prominent example is multiple branding is the the practice adopted by General motors to sell cars under different brands such as Buick, Cadillac, Chevrolet, Oldsmobile, and Pontiac.

   Multiple branding enables a company to increase its sale by targeting multiple segments of market. It also enables a company to counter competition from other companies. However multiple branding, when practiced inappropriately may impact the performance of a company negatively.

   The first and foremost potential problem of multi-branding is the cost. The cost of company in promoting and building brand increases as the number of brands increase. Therefore, a company must ensure that the cost of additional brands is justified by overall improved performance of the company. If the different brands are not clearly differentiated the then the customers may be confused about the quality of products represented by these brands. This will result in reduction in sale. Also some time the impact of one brand may overflow to impact the image of another brand, For example if a company selling very expensive range of perfumes to persons seeking prestige value may hurt the image of the premiere brand by introducing another brand of cheap cosmetics. Also, a new brand introduced by a company may win market share at the expense of sale of products under existing brands.

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   Posted by krishna-agrawala on Saturday July 4, 2009 at 7:46 PM