13 Individual Branding Advantages and Disadvantages

Individual branding may be a reference to one of two distinctive forms of branding.

It may be a reference to flanker brands, individual product branding, or multi-branding. In this strategy, each product offered to the market is given a brand name that is not connected to the existing brands already offered by an organization. One company controls multiple brands with unique names, identities, and images, making it possible to create demographic-specific pricing or marketing strategies.

It may also be a reference to branding developed by individuals to promote themselves in some way. Tiger Woods, Roger Federer, and many other professional athletes use individual branding to promote their work, create new revenue streams, or offer a specific point of focus for advertisers and retailers. Freelancers would also use individual branding to promote themselves to potential clients.

For the purpose of this comparison, the advantages and disadvantages of individualized product branding will be evaluated. Here are the key points to consider.

List of the Advantages of Individual Branding

1. It reduces the influences of a corporate identity.

When individual branding is pursued for multiple products, then it allows a corporation to position its brands in several different ways. It is no longer constrained to a single demographic that is based on the corporate identity. Every product is able to develop its own identity, brand message, and personality. To the consumer, that means the product brand develops a life of its own. That reduces the over influence that a corporate identity offers when that is the point of emphasis instead.

2. It allows each brand to develop its own marketing strategy.

Because each product is offering its own brand message, it can develop its own strategy to market itself to specific demographics. There are no connections to a central brand or other products, which means a company can target a specific audience without influencing the impact of their other products in some way. Different images and messages can be used to reach specific consumers that may not be attracted to the other products or brands offered by a company.

3. It creates an opportunity to develop multiple product grades.

One of the biggest advantages of individual branding is the ability to create products of various quality levels within the same company structure. Each brand is able to target a specific audience that is attracted to the value proposition being offered at every quality level. The lower quality products are not going to weaken the image of higher quality products, even though the same company sells both, because each relies on the reputation of its own brand to generate sales.

4. It allows a company to serve customers in different ways.

When individual branding is used, consumers can be served in different ways by each brand being offered. An example here is PepsiCo, which offers a number of food and beverage brands to consumers. There are 22 billion-dollar brands under the PepsiCo umbrella. Consumer who are focused on healthy eating decisions are served by the Naked, Sabra, or Quaker Oats brands. Consumers focused on snacking my look at the Ruffles, Lays, or Cheetos brands. Although these are all PepsiCo, consumers still get specific needs met despite having very different needs from one another.

5. It unties the reputation of a company with its products.

When individual branding is being practiced, then the failure of a single brand will not hurt the local, national, or global reputation of the company. Using PepsiCo as an example once again, the lemon-lime branding of Slice was an initial success when competing with 7-Up and Sprite in the 1980s. After a few good years, its market share dropped by a full percentage share in just 12 months. By 2003, the branding had failed, and PepsiCo replaced it with a new brand: Sierra Mist. Although Slice ultimately failed, PepsiCo could rebrand the product to continue selling it successfully.

6. It can build multiple levels of consumer loyalty.

The modern consumer builds relationships with the brands they enjoy the most. These relationships are seen as beneficial, which generates loyalty to the products being offered over time. When a consumer is attracted to multiple brands under the same company umbrella, it becomes possible to build multiple levels of loyalty with a single consumer. That creates the potential for long-term repetitive sales, which ultimately leads to a healthy, growing organization.

List of the Disadvantages of Individual Branding

1. It may cause the home company to become unstable.

When individual branding is being practiced, there will be one product which is more successful than all the rest. There will also be one brand that is not as successful as all the other ones. This can create instability within the company. Those involved with the successful brands may be viewed as having more power within the organization, even though all brands might be profitable. Over time, this can lead to employee conflict, market conflict, and consumer confusion.

2. It doesn’t “fool” all consumers.

Some consumers are skeptical of the individual branding process. They recognize the advantages companies receive from it, which causes them to question the quality of the products being offered. They will still associate one brand failure with the other brands because they recognize the home organization of all brands. That means there will be some consumer loss experienced in other brands, even if a rebranding effort is eventually successful.

3. It creates divisions within certain markets.

PepsiCo sees this negative with their potato chip brands. Some customers prefer to purchase Ruffles, while others prefer to purchase Lays. Although these brands target unique sub-segments of the potato chip market (ruffle-cut chips vs standard-cut chips), both are sold on store shelves throughout the United States, Canada, and the rest of the world. By splitting the overall market into sub-segments, there is always a risk that the market will become permanently divided, causing the company to spend twice as much to generate similar results to having just one branded product present.

4. It creates a risk for market cannibalization.

When a company introduces a new brand into the marketplace, there is a good chance that they will negatively affect the market for any existing brands they have in that space. Although the goal may be to target specific demographics that are not attracted to an older product, the new product will still steal sales from the existing consumer base. That means the performance of a new brand may be overstated, while the impact to an older brand may be understated, as consumers simply shift from the old brand to the new one.

5. It requires multiple brand creation costs.

Although there is individualization available when this type of branding is used by an organization, there is also the disadvantage of multiple branding costs. You must invest cash into each brand being developed for the products being offered to the market. That means you have unique advertising and sales promotion costs which are associated with each product instead of having one basic cost associated with the home organization. You are effectively managing multiple small businesses with individual branding instead of one large business.

6. It creates more risks for new product launches.

If your home company has an established brand and reputation, then you can launch new products under the same banner with a reasonable level of success. If the value is good and the product solves problems for consumers, then it will gain the attention it requires to maintain its sales volume. When using individual branding, each new brand being introduced must find its own recognition. It does not have any consumer loyalty associated to it. The market will not acknowledge the new product unless the marketing message is able to make a positive impact.

7. It requires more human capital.

If an organization is juggling multiple brands under the same umbrella, then it will require more human resources. It will require more technical resources. There will be a higher demand level for internal and external funding sources. Although this may provide more jobs and support wage growth in an economy, it also requires a certain level of talent and skill which may not be available to every corporation.

The advantages and disadvantages of individual branding apply to all businesses. Large corporations tend to experience the most advantages as multiple brands work together to generate multiple revenue streams. Small businesses may not have the capital available to start multiple brands. Introducing any brand to a new marketplace entails risk. Having more brands creates more risk in this area. At the same time, each brand stands on its own, which allows a home company to maintain itself, even if product failure occurs.