This chapter is from the book
This chapter is from the book
This chapter is from the book
Independent Brands
In today's corporate world, it is typical for companies to be structured around a number of divisions, in which each division has largely independent operations and is responsible for its own profits. Sometimes, each division is actually a distinct brand. In this case, the kinds of products that the different divisions sell can be similar, but the brands sell merchandise targeted at a specific customer base. An example of this is Williams Sonoma Corporation, with brands such as Williams Sonoma, Pottery Barn, and West Elm. Another well-known example is Gap Inc., whose brands include The Gap, Old Navy, Banana Republic, and Piperlime.
The reason for companies to own multiple brands is that it increases their total market presence because each brand division has its own customers. In addition, each brand is frequently targeted to a particular segment of the market, such as high-end goods or value-priced merchandise.
In some cases, with an aggressive acquisition strategy, a parent company can find itself in the position of owning many dozens of largely independent selling enterprises. Each time a new company is bought, that company becomes yet another division within the structure of the parent company, and in many cases this new division preserves its old brand and operates largely independently from other divisions.
Brand Perception
Although all these sellers are actually part of a single company, from the point of view of customers, they are frequently perceived to be unrelated to each other. For example, customers of Macy's would be confused if typing www.macys.com were to redirect them to www.bloomingdales.com. Even though both of these sellers are owned by the same company, the customers perceive them as being distinct.
Because of this perception, the two sites must behave completely independent of each other. For example, customers would be surprised if, having placed an order on the Macy's site, they could see that order on the Bloomingdale's site. In fact, if any of the personal information that they had on one of the sites were to show up on the other site, these customers would be concerned.
Therefore, having a separate site for each brand is not only beneficial to the business, but is actually necessary simply to avoid customer confusion.
Brand Image
There is another reason for each brand to have a different site: to preserve brand image and identity. Generally, brand image is maintained not only by the different products available for sale, but also by the style of the site and the images presented. A site designed for teenagers would likely use brighter colors and more graphic images than a site designed for mature shoppers. It would be impossible to maintain such brand identity if a single site were to be used for selling the products of all the brands.
Another important reason to maintain separate sites for different brands is that this approach enables the brands to create appropriate advertising and run marketing campaigns that are most suitable for each brand. For example, advertising designed for value-priced merchandise might focus on featuring low-priced offers, whereas advertising designed for high-end products would be more focused on quality and prestige.
Depending on the products sold on each site, the marketing campaigns of each brand might also be timed with different holidays in the year. For example, a back-to-school campaign might not be applicable to jewelry, whereas a site focused on tools might not be running a Mother's day special.