When embarking on your entrepreneurial journey, it can be challenging to decide which branding strategy to adopt for your products or services. One effective strategy that many successful companies use is endorsed branding. So, what exactly is endorsed branding?
An endorsed branding strategy is a branding strategy used by a company to strengthen the brand equity of a range of products or services through brand association and brand endorsement, thereby leveraging the overall brand equity, promise, and positioning of the master brand.
Now let’s take a deep dive into what endorsed branding is, the advantages, disadvantages, and cover some examples in detail. Ready? Let’s go.
What is Endorsed Branding?
Before we get into endorsed branding, feel free to check out our post on the different types of brand strategies where we cover the basics of product branding, line branding, range branding, umbrella branding, and endorsed branding. Now let’s get back to endorsed branding.
Endorsed branding is a strategy used by a company to strengthen the brand equity of a range of products or services through brand association and endorsement, thereby leveraging the overall brand equity, promise, and positioning of the master brand.
In this strategy, each sub-brand is independent but is endorsed by the master brand, providing it with additional credibility and recognition.
Endorsed branding involves creating sub-brands that maintain their own unique identity while also carrying the endorsement of the master brand. This endorsement serves as a quality assurance mark and leverages the master brand’s established reputation.
The sub-brand benefits from the master brand’s recognition and trust, while still having the flexibility to develop its own brand promise, positioning, and target market.
One of the key aspects of endorsed branding is the dual branding approach, where the sub-brand name is prominent, but the master brand endorsement is clearly visible, usually in a secondary position.
This strategy helps in creating a connection between the sub-brand and the master brand, enhancing the perceived value and trustworthiness of the sub-brand.
Examples of Endorsed Branding
Here are a few examples of companies that utilize an endorsed branding strategy successfully.
Nabisco
Nabisco uses an endorsed branding strategy where each of their respective brands has its own strategy, positioning, and promise while enjoying an endorsement from the Nabisco master brand.
| Master Brand | Endorsed Brands |
|---|---|
| Nabisco | Belvita, Chips Ahoy!, Nutter Butter, Oreo, Rice Thins, Ritz Crackers, Teddy Grahams, Toastettes |
Nestle
Nestle uses a mix of brand strategies for their portfolio of brands that fall under the master brand. The following sub/endorsed brands fall under Nestle’s master brand, following an endorsed branding strategy:
| Master Brand | Endorsed Brands |
|---|---|
| Nestle | Smarties, Kit-Kat, Milo, Milky Bar, Pure Life Water, Nesquik, Coffee-Mate |
Marriott International
Marriott International employs an endorsed branding strategy for its various hotel chains. Each hotel chain operates independently but is endorsed by the Marriott master brand, which adds to its credibility and brand value.
| Master Brand | Endorsed Brands |
|---|---|
| Marriott | Courtyard by Marriott, Residence Inn by Marriott, Fairfield by Marriott, SpringHill Suites by Marriott, JW Marriott |
PepsiCo
PepsiCo uses an endorsed branding strategy for many of its beverage and snack products. Each product brand maintains its unique identity while being endorsed by the PepsiCo master brand.
| Master Brand | Endorsed Brands |
|---|---|
| PepsiCo | Gatorade, Quaker, Tropicana, Mountain Dew, Lay’s, Doritos, Tostitos |
Pros of Endorsed Branding
Let’s look at some of the advantages of an endorsed branding strategy.
Leverage Master Brand Equity
All the sub-brands leverage the brand equity of the master brand through endorsement. This means that new products can benefit from the established reputation and consumer trust in the master brand, making it easier to gain market acceptance.
For example, a new product launched under the “Kit-Kat by Nestle” brand can quickly gain consumer trust due to its association with the well-regarded Nestle brand.
Easily Introduce New Products
Companies can relatively easily introduce new endorsed brands into the market and leverage the brand equity of the master brand. This allows for quicker market entry and reduced marketing costs.
For instance, Marriott can launch a new hotel chain with the endorsement of the Marriott name, ensuring that it is perceived as a quality option.
Cross-Selling Opportunities
Cross-selling opportunities are always available to help market new products and brands. When consumers trust the master brand, they are more likely to try other products endorsed by the same brand.
For example, consumers who enjoy Oreo cookies might be inclined to try other Nabisco-endorsed products like Ritz Crackers.
Flexibility in Branding Strategies
The master brand remains flexible to use different branding strategies on different products. This allows for tailored marketing and branding approaches for specific sub-brands while maintaining a cohesive overall brand image.
For example, PepsiCo can market Gatorade with a focus on sports performance while promoting Quaker as a wholesome, nutritious food brand.
Cons of Endorsed Branding
Let’s look at some of the disadvantages of an endorsed branding strategy.
Weak Brand Equity
Companies with weak brand equity will find it difficult to successfully introduce new endorsed brands. If the master brand is not well-regarded or lacks recognition, new products will struggle to gain traction in the market. This can hinder the overall growth and success of the brand.
For instance, a lesser-known brand attempting to use an endorsed branding strategy may not achieve the desired market penetration due to insufficient consumer trust.
Negative Brand Associations
Negative brand associations will spill over into endorsed brands and negatively affect consumer perception. If one product under the endorsed brand faces criticism or a scandal, it can tarnish the reputation of all products endorsed by the same master brand.
For example, if a food safety issue affects one of Nestle’s endorsed brands, it could potentially impact consumer trust in their other endorsed brands like Kit-Kat and Smarties.
Market Cannibalization
Market cannibalization is an issue as similar endorsed brands compete for market share. When multiple products under the same endorsement target the same customer base, they can end up competing against each other, which can lead to reduced sales for each product.
For instance, multiple flavors of Gatorade might cannibalize each other’s sales rather than expanding the overall market share for PepsiCo.
High Marketing Cost
While leveraging the master brand’s equity can reduce some costs, each endorsed brand still requires significant marketing investment to establish its unique identity. This can lead to higher overall marketing costs compared to a single master brand strategy.
For instance, Marriott needs to promote each of its endorsed hotel chains individually to ensure they stand out in the market.
Conclusion
Endorsed branding allows companies to leverage the strength and recognition of their master brand while providing sub-brands with their own unique identity and market positioning. This strategy can facilitate easier market entry and foster strong brand loyalty, but it also requires careful management to avoid potential pitfalls such as negative spillover effects and market cannibalization.
Understanding the advantages and disadvantages of endorsed branding can help you make an informed decision on whether this strategy is right for your business. By strategically managing the brand and ensuring high standards across all endorsed products, companies can successfully implement endorsed branding to enhance their market presence and consumer trust.
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