There are many links to be made between marketing strategy and business strategy. Today, I’d like to talk about a very specific situation. The launch of an important product that extends the company’s range of products and services.
When we talk about the success of a product in the marketplace, it’s easy to think immediately of marketing actions: advertising, promotions, public relations and so on. But these are just the tip of the iceberg. What lies beneath is a profound link between a company’s overall business strategy and its marketing strategy. It’s a key relationship that determines the success of any launch. Particularly when a new product seeks to distinguish itself while fitting into the brand’s architecture.
In this article, we’ll explore how these two strategic concepts intertwine. And what role brand architecture plays when a company wants a new product to take on a life of its own, while remaining true to the brand’s DNA.
Business strategy: the foundation of the global vision
Business strategy is the overall direction a company takes to achieve its global objectives. Mergers and acquisitions, opening up new markets, new offerings, up-selling, cross-selling (upsell, crossell), etc.
Whether you’re a manufacturing company looking to conquer new markets, or a technology firm looking to innovate, business strategy sets the roadmap. It defines the targets to be reached, the resources to be mobilized and the means to be used to get there.
When introducing a new product, it is essential to ensure that it supports and reflects the overall vision. However, some companies choose to give a product its own identity, often to capture a specific market segment. This is where the concept of brand architecture comes in.
Marketing strategy: the engine of execution
While business strategy sets the broad outlines, it’s marketing strategy that takes over to implement them. Marketing’s role is to ensure that the new product’s value proposition is well understood. But also that it resonates with the target audience. This means segmenting, targeting and positioning. Identify relevant market segments. Target ideal customers (ICP). Position the product uniquely in relation to the competition, and address our buyer personas in the right way.
Let’s take a concrete example: a manufacturing company wants to launch an innovative new device. On the one hand, the business strategy aims to position itself as an industry leader in innovation. On the other, it wants this new device to evolve as an independent product, without depending too much on the parent identity. The marketing strategy will have to juggle the management of this dual identity. This will ensure that the company retains its image of innovation, while allowing the product to “live its own life”.
Brand architecture: creating a distinct identity without severing ties
Introducing a new product with its own identity raises the question of brand architecture. This term refers to the way in which a company structures and organizes its brands, sub-brands or product lines. There are several models of brand architecture. Choosing the right model can be crucial when seeking to launch a new product while allowing it to evolve autonomously.
The three main types of brand architecture are :
1. The umbrella brand. All products share the name and identity of the parent brand. Think of Apple: the iPhone, iPad and Mac are all distinct products. But they all benefit from the power and notoriety of Apple.
2. The hybrid brand (affiliated, endorsed). The parent brand remains visible and acts as a guarantee of quality, but each product retains its own identity. An example is Nestlé with its KitKat sub-brand. Nestlé guarantees quality, but KitKat remains a separate entity.
3. The independent brand. Here, products are totally autonomous, with little visible link to the parent brand. A typical example is Procter & Gamble (P&G), whose products such as Tide, Gillette and Pampers each have a distinct identity.
In the case of a company wishing its new product to have “a life of its own”, it could opt for a hybrid brand or an independent brand, depending on the extent to which it wants this product to benefit from the parent company’s notoriety. Striking the right balance: when should a product break free from the parent brand?
Striking the right balance: when should a product break away from the parent brand?
Let’s take a fictitious example of a technology company specializing in management software. It launches a new product: a Software as a Service (SaaS) talent management solution. The question is: should the new product be branded or given its own identity?
In some cases, letting the product evolve independently is a good idea if you want to avoid being perceived as too focused on a particular domain. It can also enable the new product to appeal to a wider audience, without being limited by customers’ perception of the parent brand. For example, if this software company is perceived as a specialist in inventory management solutions, it might be preferable to create a new identity for this talent management solution so that it is perceived as a dedicated solution.
However, by retaining some link with the parent brand (via a hybrid branding model), the company still benefits from its credibility and reputation. This can accelerate customer confidence in the new product, while enabling it to develop relatively autonomously.
Launching a product your own way: the importance of agility
One of the mistakes companies often make is to think that marketing strategy is fixed once defined. In reality, marketing – especially when launching a new product – must remain agile. The market is constantly evolving, competitors are adjusting their offers and buyers are changing their behavior. So it’s essential to adopt an approach of continuous testing and optimization, while keeping long-term business objectives in mind. We’ve seen companies backtrack after several months on the market.
Let’s say our technology company launches this new talent management product with an independent brand. But it finds that the product isn’t getting the recognition it was hoping for. It may decide to adjust its strategy and strengthen the association with the parent brand to take advantage of its strong brand image.
Measure performance and adjust plans
Finally, it’s essential to measure product performance against objectives. Key performance indicators (KPIs) such as customer acquisition, conversion rate or independent brand awareness will provide valuable signals. If these indicators fall short of expectations, it may indicate a misalignment between business and marketing strategy, or a need to readjust brand architecture.
All too often, smaller B2B companies tend to neglect this aspect of the launch. This is because the costs involved in development and launch leave no room for the research associated with implementation follow-up.
The link between business strategy and marketing strategy is crucial. Especially when introducing a new product that has to live its own life. Brand architecture then becomes a powerful lever to enable this product to stand out while benefiting from the strengths of the parent brand. Whether you opt for an umbrella, hybrid or independent brand, the key is to remain aligned with the company’s overall objectives, while adopting an agile approach to respond to market realities.
Marketing strategy: conclusion
Looking to fine-tune your marketing strategy to maximize the impact of your new product? Our strategic marketing experts are ready to support you. Contact us today for a personalized consultation and discover how a targeted marketing strategy can propel your product and brand to success. Let us help you turn your marketing vision into concrete, measurable results.
