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.
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.
1. Streamlining portfolios to fewer, stronger brands creates more elastic mega-brands
Many more elastic brands exist today, spanning multiple diverse categories (from traditional brands like Virgin, Ralph Lauren, Honda and Yamaha, to more modern technology brands like Amazon, Google and Microsoft). The effectiveness and efficiency of such mega-brands is highly appealing, especially in today’s constrained budget environment. The challenge, however, is to not spread oneself too thin and to truly deliver on the brand promise in each and every category. Crafting the brand promise to be rich and meaningful enough – yet also well differentiated enough – across a brand’s potential product portfolio is essential. In general, brands with a more abstract meaning can cross many categories because their brand promise is not rooted in specific product functionality. For example, Virgin’s promise of “satisfying unmet customers’ needs” is potentially relevant to almost any category.