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4 Ecommerce Branding Strategies Every Entrepreneur Must Know

While ecommerce becomes more and more competitive, entrepreneurs are in need of understanding the best brand strategies that are used by the top brands in the world to compete in this ever changing and ever competitive world of ecommerce.

In this article we will explore what the most common brand strategies are and why they are used by the big brands. 

First, most entrepreneurs don’t understand what branding is. They think it is a logo or some color palette applied to your website, business cards, etc. But in order to understand these brand strategies you must first understand fully what a brand or branding actually is, which is much more than just a logo.

Marty Neumeier Quote

Understanding thisis far more important than understanding how to market your products. Because marketing cannot exist without the first having branding. Both coexist in a delicate yet expandable circle of life, but branding is the first step. 

As an example when flying, the airplane will be marketing, but knowing you will land safely is branding. If you had distrust on whether or not you will make it safely, then you wouldn’t get in the airplane. And thus no one will buy tickets and so the company cannot exist. 

Another example of branding is how people choose to consume a drink that has 44 g of sugar per can and tons of chemicals to create an artificial flavor and zero health benefits yet it is consumed everywhere all year long with a brand valued at $83 Billion. I am talking about Coca-Cola. Well, this is because Coca Cola is happiness and creates a satisfaction to being thirsty. 

Coca Cola is nothing other than what people say it is. 

This is how things as simple as a drink can become a Fortune 500 company. 

So now, you got a brand and are now trying to figure out ways to expand your reach, to understand powerful brand strategies that can help you in your journey to becoming more successful. Well look no further, here are 4 main strategies that will make your brand’s reach go much further. 

Multi-Product  / Line Extension  

As the name states, this is when a company has multiple products that are covered under the umbrella of this same brand. 

Brand line extension or product line extension is beneficial especially when products are related to one another. 

Let’s look at a good example of a well-known mainstream cleaning brand such as Clorox. 

Colors Bottle

They have a huge variety of products within this brand. But all products have one purpose in common: cleaning and disinfecting. 

Clorox Products

When brands have a common product line theme they are likely to gain recognition. They niche down to one specific purpose, their brand strategy is clear, their message is simple and they are easy to gain recognition.

The benefits of brand product line extension is on brand equity return, lower promotion costs and growing brand awareness. 

Brand Extension 

The brand extension strategy also known as brand stretching is a marketing strategy in which a known brand enters a whole new market using the same brand. Brands use this strategy to increase and leverage brand equity (defined as the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself.)

Product line extension adds equity in a product line’s depth whereas brand extension adds equity in a brand’s reach. 

Brand Strategy

An example of a Brand Extension will be Canon. A well known company that makes cameras. But they created a Brand Extension to printers. 

canon printer and camera

When this is done incorrectly it can stretch a brand very thin. An example of this is Sony.  

Movies

It used to be that Sony was known for one thing: a good brand for TVs and certain electronics. But now Sony uses its brand on most of its products: from electronics, to music, video games consoles, financial services, professional solutions, movies, music, etc. So if I were to ask you today, think of Sony and tell me what comes to mind. If you are a millennial, perhaps TVs and some electronics, but if you are a Gen Z or Gen Alpha perhaps you can’t really pin point one thing or perhaps each will have a different idea. 

Sorry Sony, you need to rethink your brand strategy.

Multi-brand

Multi-branding is a marketing strategy which is used for different purposes. One is to launch multiple brands which target the same market competing with each other. 

Example of this is Crest and Oral-B belong to the same parent company: P&G. By having 2 different brands owned by the same company competing in the same market they limit the possibility of any further competitors. 

VW brands

Another reason for multi-branding will be in the car industry where each car carries their own brand names. For example Volkswagen owns not only their line of cars but also Audi, Ferrari, Bugatti, etc. All cars do the same (they will drive you from point A to point B). Some will do it faster and in a more luxury ecosystem.  Each Volkswagen sub-brand targets a different type of public: those who like sports, those who like luxury, those who like sedans or SUVs, etc. In this way, Volkswagen is literally targeting every possible subdivision within the car market. 

 

New Brand 

What happens when a brand that has created a wide variety of products and even brand extensions but wants to extend their reach to other markets? They create a new brand which is then controlled by a Parent Company. This is by far the most costly brand strategy since this means high costs on advertising and marketing to get the brand off the ground.  

For example, everyone or mostly everyone loves ranch dressing. And the favorite ranch dressing is from Hidden Valley who created this recipe in the 1950s. 

Hidden Valley Ranch

They have a wide variety of products which all have something in common: ranch dressing and some variation of the same flavor.

ranch dressings

But did you know that Clorox and Hidden Valley ranch dressing are cousins? They both are controlled by the same parent company: The Clorox Company. 

The Clorox Company has actually many brands: Burt’s Bees, Natural Vitality, Hidden Valley, Pine Sol, etc.

Again, how can you market ranch dressing, potent disinfectants and a baby/beauty product line in the same company? 

Having new brands is a common approach for large companies or for growing companies who want to enter into different markets.

However, large corporations nowadays, instead of starting something new, just acquire other brands and add them as part of their line. For example Amazon purchased Whole Foods in 2017. Disney acquiring Pixar in 2006, Marvel Entertainment in 2009 and Lucasfilm in 2012.

Thanks for reading this article. Please share with anyone that is looking to create a real brand that can stand on its own.

Principium Studio is a branding agency with over 5 years of experience in the ecommerce world. We have launched hundreds of brands successfully (including 7+8-figure sellers) and we love to take on new challenges!