Brands can use a masterbrand strategy to position a brand or launch a new variant, manage a large portfolio or bring its purpose to life. It is a strategy increasingly used by the biggest FMCG companies. Brands should not let growing portfolios dilute the masterbrand equity or take away focus from its strategic priorities.

Definition

A masterbrand is a dominant, overarching brand that serves as an anchor point for all its various products, brands and services. Examples of masterbrands include General Electric, Virgin, Coca-Cola, Disney, Diageo, Unilever and P&G.

A masterbrand strategy is one that creates campaigns or executions at the total brand level, designed to impact the whole of the brand’s portfolio, as opposed to a particular sub-brand, variant or product.

Key insights

1. Ecosystem brands are some of the most valuable masterbrands

The winning formula for brands is now less about what they offer, and more about creating a customer-centric and market responsive ecosystem around their core offering to better satisfy real human needs. Effective ecosystem brands are defined by revenue rather than costs and creation of new markets rather than market share. Such brands have therefore moved away from price to focus on better quality, convenience, speed, and relevance which in turn translates to deeply connected and long-lasting relationships. While some brands, such as easyGroup, have simply followed a brand extension route, the most successful have become an ecosystem offering an interconnected set of products and services that enables users to fulfill a wide range of needs in one integrated experience. Digital brands are the best examples – three of the five most valuable brands in the world (Google, Microsoft and Amazon) are ecosystems – but Lego and Disney show how offline brands can also deliver on this front. Three identified competitive advantages stand out with such ecosystem brands: they excel at delivering personalisation; they deliver long-term loyalty; and they enjoy greater return on ad spend than any other brands.