Micro-brands: is small beautiful or just confusing?

too many brand pebbles on the beach?It’s very encouraging to any brand specialist to see the way that businesses of all sizes have embraced the concept of branding. The internet, amongst other recent phenomena, has reduced the cost and barriers to entry for start-ups and micro businesses, which in turn has led to an explosion of micro-brands. Is this growth helpful to the brand arena in general, or to the micro-brands themselves?

Certainly, it now requires more care for any brand, existing or new to check that somewhere there is not a micro-brand that may cause confusion with your own brand, or worse, lead to unwitting infringement of IPR.

So far as small brand owners are concerned, the received wisdom was always to keep it simple. It made a good deal of sense to follow either the ‘monolithic’ or ‘endorsed’ brand models so that all your offer could draw strength from the main brand and your investment was maximised. Few would have advised a small business to adopt a distributed or ‘Unilever’ style brand strategy. However, thanks to the low cost of entry, and the opportunity to build brands with far lower cash investment (but maybe a good deal of time resource), there may sometimes be the case for an SME to consider a multiple brand strategy.

Consider the small business that has a product that can be sold into a high value sector at a premium price, but can also produce a simpler low cost version at a significantly lower price. A number of strategic options may be available:

  1. Use the flagship product to pull through sales of the cheaper product through aspiration and value transference, perhaps raising the price of the lower product.
  2. Adjust the prices of the two products to bring them closer and perhaps concentrate upon one end of the market (or maybe the middle).
  3. Concentrate energies upon the sector the with the greatest revenue potential.

To make these decisions would require a significant amount of research which could be costly and time-consuming. But traditionally, these would have been the type of options on the menu for smaller brands. Today, it is relatively simple to create two ‘dual’ brands aimed at the different sectors and ‘see what happens’. Research is done ‘on the hoof’. I know one major confectionery manufacturer who used to adopt this strategy, calculating that the cost of bringing a new chocolate bar brand into production and testing it by distribution in a limited area was far cheaper than thoroughly researching pre-launch. This sort of approach was way beyond the resources of small businesses. But, today, to test a brand concept on-line could not be simpler or cheaper.

Micro-brands may be muddying the water and making clarity of offer and proposition even more important, but for all those of us who find branding exciting and stimulating there is a lot to be learned. There may be a lot more background noise out there – but watch out for those tiny voices being heard above the din.

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