umbrella brandinga MARKETING tactic which involves a firm selling completely different products or different versions of the same general product under the same BRAND NAME. The attractions of umbrella branding are that it enables the firm to capitalize on the ‘goodwill’ accruing to an existing brand to facilitate the introduction of a new product and also ‘spread’ the cost of promoting a related group of brands. Buyers who have found the existing brand to be satisfactory will be ‘reassured’ the new product will also be satisfactory Umbrella branding thus increases marketing effectiveness and can reduce both the initial launch cost and the subsequent advertising and promotional unit cost of supporting the brand.
Hoover, for example, used its original ‘Hoover’ vacuum cleaner brand name to effect entry into the washing machine and other electrical products markets. Likewise, ‘Nestlé’ has employed the ‘Nescafé’ brand name to extend its coverage of the instant coffee market through new brand launches: Nescafé Gold Blend, Nescafé Blend 37, Nescafé Cap Colombia, Nescafé Alta Rica, Nescafé Decaffeinated etc. See ECONOMIES OF SCOPE.