A masterbrand strategy often involves building one strong brand across many products, allowing you to focus all of your brand building dollars on just one brand name and identity.  This has the potential of greatly simplifying the brand management process and adding clarity to your messaging and communications.  Unfortunately, a masterbrand strategy sometimes ends up milking brand equity for short term gains at the expense of long term brand building.  Here are three of the “gotcha’s” with the masterbrand approach:

  1. The broader the focus, often the weaker the brand.
    Masterbranding inevitably leads to expanding, not narrowing, what your brand stands for.  So as you put your masterbrand on an ever growing portfolio of products, you might find yourself actually diluting your brand equity and value. We believe this is what happened to the American Express brand.  That is,  I used to take pride in having an AMEX card in my wallet because not everyone could qualify for one.  But as American Express extended their brand name to all types of cards for all types of consumers, the cachet of having an AMEX card vanished.  Today, I no longer feel any compelling to reason to use my AMEX card, and end up using whatever card I can find first in my wallet.  The masterbrand strategy diminished and ultimately destroyed what made AMEX special, at least to me.
  2. The best brand names are quick and nimble, but most masterbrands tend to be big and lethargic.
    When we developed PowerShot for Canon, they were competing against some well-established competitors following masterbrand strategies.  So we focused on an important trend in the industry that the competition wasn’t leveraging: empowering users to take better pictures.  While the competition had their masterbrand plastered on every camera from small, inexpensive models to high-end professional ones, with a very mixed branding message, only Canon had the PowerShot.
  3. Masterbrands are exposed.
    Since masterbrands tend to span lots of products, bad press about a single product hiccup might tarnish the entire portfolio.  When Circuit City asked for our help to name a new automobile business, they didn’t want to follow a masterbrand strategy and call it something like Circuit City Automotive.  Instead, the Carmax brand name was ultimately selected. So, with the recent bankruptcy of Circuit City, there is virtually no negative impact on the highly regarded Carmax brand.

While masterbranding may make sense for you, it certainly isn’t a panacea.  Feel free to call us for more of our thoughts on masterbranding and other brand building and brand naming strategies.

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