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Social Media And Branding: The Benefits Of An Umbrella Brand

March 14, 2019

One amazing fact about social media marketing is that markets and brands can move and scale with incredible speed. Most social media brands are created to position and market a particular product.  The scale of the market makes it evolve and reposition. Think of the car industry of years back: two great giants of this era were Henry Ford of the Ford Motor Company and Billy Durant who created General Motors. Both understood that the original market would depend upon low price. Durant also felt that the low price should also have variant brands to target different groups. Henry thought that price was the key and he created a world class brand in the Model T. For a time, Henry’s bet was the correct one.

The market evolved over time. As the decade of the 1910’s progressed a middle class developed. With more resources available, people began to want more than just a low price in a car. The variance of income created different targets for the car. This created the necessity for the car to be branded in different ways. Luckily, for GM, Billy Durant had created these different brands. In the General Motors model, Chevy was the entry level for low-income people. Pontiac was the next level. This is for people who start a job and start receiving early career promotions. For the mature mid-career there is the Oldsmobile. For those people know on the fast track there is the Buick. Finally, for the people who have made it, there is the Cadillac.

I think the GM model is the model that modern social marketing should follow. Different income groups define their products in a different manner. The brands help them define themselves. This is the beginning of what is called the “umbrella” brand. This is several brands of the same product, under the roof of one company. It is this strategy that allowed General Motors to overcome a seemingly insurmountable lead by Ford in the 1920’s to become the pre-eminent brand in cars. What are the benefits to having an umbrella brand in relation to having just one big brand like the Model T.

As in the case of General Motors, a big benefit is MARKET GROWTH. There is strength in numbers. With many brands, like the GM family, there is constant engagement with the General Motors brand, instead of the singular General Motors “car”. As in the GM case, no one brand can control the entire market. This is the genius of Albert Sloan. It was Albert Sloan that has taught marketers the importance of targeting, segmenting, differentiation, and branding. This is in clear contrast to Mr. Ford’s assertion that you can have any color you want as long as it is black.

Multi-brands PREVENT BRAND EXTENSION. In 1923, there were many car companies, most with one brand. By having multi-brands, Mr. Sloan was able to consolidate the market and to dissuade the smaller struggling companies not to extend their brand and to get out of the market, allowing General Motors to concentrate on Ford.

Multi-brands PROTECT THE BRAND IMAGE. Everyone knows that Chevy, Pontiac, Olds, Buick, and Cadillac were General Motor brands. Each of the cars contributed to the GM image. Ford’s singular brand in the Model T worked against Ford. Because it had only one brand, Mr. Sloan was able to portray the Model T as a brand “built by farmers for farmers”