Having a strong brand yourself? Well, that’s great, but let’s discuss the usefulness of external brands. I often encounter companies that have strong positions within their own markets who tend to beleive that they don’t need other brands. Mega-brands like Ikea, Wal-Mart etc. might benefit out of a strategic point of view from using their own brands as a so-called branded house – or monolith – on many products. But if you watch them carefully you’ll see that not even these huge companies rebrand everything. A Coke is still a Coke within an Ikea or Wal-Mart superstore and so it should be.
No matter how strong brands Ikea and Wal-Mart are, they still are (only) company brands, and such brands can be loaded with a lot of value, one of them proabaly ”cheap”. But hardly values that are great for a product like a coke. You don’t buy Coke because it’s cheap. Many companies have company brands loaded with values such as reliability, good service etc. but no matter how strong these values are, they cannot replace the values of a narrower, dedicated product brand. Product brands should be crafted towards a specific target audience and their specific needs and wants. Self-branding products like Ikea and Wal-Mart do limits the ability to position your brand and often it limits you to price competition. That on the other hand is exactly the right thing for Ikea and Wal-Mart, but it might not be the right thing for you unless your brand is about being a low-cost alternative in a highly competitive market.
A potential car buyer for a brand new Porsche is perhaps interested in buying it from a company with a good reputation and great customer service. But that’s unlikely to be the reason why the customer wants that specific car in the first place. If values like reliability and customer care were most important, he’d buy a Toyota. The other values loaded into the brand of Porsche – youth! – speed! – excitement! – etc! – are what is at play here. And what’s more: they make this customer pay a lot more for his car than his neighbour did for the Toyota. Great brands make us step outside the box of rational thinking and let us… well… live!
So: don’t mix the idea of a strong company brand with the need of strong product brands. These are different things, both of them good if used in a proper manner.