Competing Brands Within the Same Company

September 21, 2004 - by Robert E. Stevens, GENESIS II (The Second Beginning) E-Mail: views@aol.com

A few months back, I received an email requesting my thoughts on "rules of engagement for competing brands within the same parent company." Specific questions included the following.

What is the strategic benefit of offering and investing in competing brands within the same product category? What are the do's and don'ts that govern how brands under the same corporate umbrella are allowed to compete? Are there any "lines in the sand?" Are internal competitors viewed any differently than external?
To what extent does the corporate parent actually foster "competition" among its own brands?

My first thought was that these questions are very much secondary questions. The first set of questions that need to be addressed deal with the status of the consumer need and the status of the current market. The first question that needs to be answered is "Is there a real consumer need for a second brand"? Without a consumer need, you do not have a market opportunity. Next, how big is this opportunity? What is the dollar market? Who is the competition? How is the need currently being addressed? How well is the need fulfilled with the current solutions?

Let's assume we have a brand in a specific product category. We should know the category technology, market, and consumers. Further, lets assume we have identified an unfulfilled consumer need in the category. We do the testing identified in the previous paragraph. If everything looks favorable, we move forward to explore the effects of the possible category segmentation. Will the new brand increase the size of the category? From what brands will the new brand acquire share? If the new brand shows promise without major damage to our current brand's share, who would not move forward with the development of the new brand? Look at the success P&G had in brand development in the package soap category.

Pre World War II, P&G had Ivory Snow and Dreft for baby care to go along with Oxydol for regular laundry. Immediately after the war they came out with Duz and, a little bit later, Bonus to counter Rinso.

In 1946 the big breakthrough was Tide (When I joined P&G in 1951, Tide was not only the leading laundry detergent but also the leading dishwashing detergent.) the first built synthetic detergent.

With the emergence of wash & wear fabrics, came All Temperature Cheer. As the front loading, tumbler washers came on the market, we developed a low sudsing detergent, Dash. With the demand for combination detergents, we introduced Bold, a detergent plus fabric softener. For the low cost market we introduced Gain which was really the selling of fragrance.

Up to this time, 1966, we had 9 laundry detergents, 1 category, 9 brands. I could go on to cite the 10 liquid laundry detergents introduced after 1972, along with Tide with Bleach, but why beat a dead horse. The point is you can develop a very good business with multiple brands in a single product category as long as there is a consumer need for each brand.

The above took place during the era of Brand Management, now that we have Category Management, will there be much less brand proliferation? I think "yes." The focus will be more on profit and not market share.

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