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FASHION BRAND MANAGEMENT

ASSIGNMENT

TOPIC: Study of brand architecture and brand strategies of different

companies in fashion industry

SUBMITTED TO: SUBMITTED BY:

Anirudh kapoor (03)

Bhupendra pal singh (06)

Divya singh(09)



Brand Architecture

Architecture is the planned design of a system. It could be the planned design of a building, a piece of

software, the flow of information, or an object. Think of Brand Architecture or Brand Structure as a

brand‟s family tree or its hierarchy. It is how an organization organizes the various named entitieswithin its portfolio.

Brand architecture is not your brand strategy, your brand systems (logo, slogans, tag-lines and visual

imagery) or your brand marketing plan. It is a higher level plan of your brand eco-system, so you can

determine how to best build and scale your brand over time. Specifically, it sets out your plan to build

one brand or multiple brands. And, if multiple brands, what will be the relationship between them?

Child? Parent? Sister? Stranger?

Brand architecture addresses the following:

•Number of separately named entities,

•Criteria for becoming a separately named entity,

•Levels of relationships between separately named entities,

• Naming and other brand identity conventions for each level, and

• The nature of the relationships between the named entities at different levels.

Brand Architecture is an organizing structure of the brand portfolio that specifies the brand roles and the

relationships among brands and different Product-Market brand context.

Brand Architecture is defined by five dimensions.

1 . B r a n d P o r t f o l i o

2 . P o r t f o l i o R o l e s

3. Product Market Context Roles

4. Portfolio Structure

5. Portfolio Graphics



1) Brand Portfolio

Brand portfolio includes all the brand and sub brands attached to product- Market offering ,including co-

brands with other firms.

-Addition / Deletion in portfolio

Each brand in portfolio require related investments. So sometime pruning is also done based on brand

performance.

2) Portfolio Roles

Portfolio roles provide a tool to take systematic view of the brand portfolio.

These roles includes :

-Strategic Brand

-Linchpin Brand

-Silver Bullet Brand

-Cash cow brand

Strategic Brand

-It is the brand that represent a meaningful future level of brand in term of sales and Profits.

-It could be today „s mega brand or today „s small brand with future potential.

Linchpin Brand

-It is a leverage point of a major business area or of a future business vision of the firm.

-It will indirectly influence a business area by providing a basis for customer loyalty

Silver Bullet Brand

-It is the brand or sub brand that positively influence the image of another brand.

-It can be a powerful force in creating , changing, or maintaining a brand image.

Cash Cow Brands-It has a significant customer base leading to provide more profits

3) Product- Market Context Roles

Brand plays different roles depending on market requirement. Like

Endorser & Sub Brand Roles

-Master Brand is the primary brand of the company. While to define a specific offering , a sub brand

or endorsed brand can be used.



-The understanding and use of Endorser brands and Sub Brands is a key to achieving Clarity,

Synergy, and leverage in the brand portfolio.

i) Benefit Brands

It is the branded feature, component Ingredients , or service that augments the branded offering

-Branded Components: Compaq - Intel Inside

ii) Co Brands

‡

It occurs when brands from different organizations combines to create offerings inwhich each plays a

driver role.

iii) Driver Role

‡

It represents the extent to which a brand drives the purchase decision and defines the use experience.

-A brand with driver role will have some level of loyalty.

-A Driver brand is usually a master brand or sub brand , but Endorsers, Branded Benefits, and second

& Third level sub brands can have some driver role. When multiple brands are involved , the driver

role of each can vary from 0 to 100 %.

4) Brand Portfolio Structure

The brand in the portfolio have a relationship with each other.

-What is the logic of that structure

-Does it provide clarity to the customer, rather than complexity and confusion.

-Does the logic promote synergy and leverage

-Does it provide a sense of order, purpose, and direction to organization-There are 03 approaches to discussing and presenting portfolio structure.

a) Brand Grouping: Segment, Product, Quality, Design

b) Brand Hierarchical Trees:

c) Brand Range: How far should they be stretched across markets and Products



5) Portfolio Graphics

-It includes brand logo, Color, Visuals, Packaging, shape etc.

-Size and placement of type face of brand also identify the role of brand as Master or Endorser or Sub Brand.

Brand Architecture Objective

-Create Effective & Powerful brands

-Allocate brand building resources

-Create Synergy

-Achieve Clarity of Product offerings

-Leverage brand equity

-Provide platform for future growth

Brand Architecture Audit

-Business Analysis

1) Brand Architecture

- Brand Portfolio

- Portfolio Roles

-Product - Market Context Roles

-Brand Portfolio Structure

‡

2) Managing the brand Architecture

-Criteria of Adding /Deleting brands

-Is it reviewed periodically

-Management process of visual presentation of Brand

Brand Strategy:

It is defined as a long-term plan for the brand including a determination of key audiences and an

understanding of what those audiences need to know about the brand and experience. This should

precede all other marketing, including naming, as everything should flow from the brand strategy.

An analysis of company strategies reveals six models in management of brand-product relationships.

Each model denotes a certain role for the brand, its status as well as its relationship with the products

which the brand encompasses:



-The product brand

-The line brand

-The range brand

-The umbrella brand

-The source brand

-The endorsing brand

These strategies are responses to the market. They may be structured along two axes, according to

whether the value sought by the brand relates more to power and stature on the one hand, or

personalization, differentiation and identity on the other.



The Product Brand strategy

It is widely known that a brand is at the same time a symbol, a word, an object and a concept: a

symbol, since it has numerous facets and it incorporates figurative symbols such as logos, emblems,

colours, forms, packaging and design; a word, because it is the brand name which serves as support

for oral or written information on the product; an object, because the brand distinguishes each of the

products from the other products or services; and finally, a concept in the sense that the brand, like

any other symbol, imparts its own significance – in other words, its meaning. The product – brand

strategy involves the assignment of a particular name to one, and only one, product (or product line)

as well as one exclusive positioning. The result of such a strategy is that each new product

receives its own brand name that belongs only to it. Companies then have a brand portfolio that

corresponds to their product portfolio.

The line brand strategy

Deglaude Laboratories launched a product brand, Foltene: a single product associated with a single

benefit, the regrowth of hair. A strong TV advertising campaign made the market explode and Foltene

became the leader with a single product and a 55 per cent market share. They should have remained

thus, but consumer logic prevailed. Bald people were not looking for a single product. They wanted

an all-encompassing service, a total care routine. They wrote asking that shampooing be combined

with the Foltene treatment. In 1982 Deglaude launched a mild shampoo (which was later subdivided

according to hair type) followed by a daily-use lotion. All this was by way of response to customerdemands.



It should be clear that the line involves the exploitation of a successful concept by extending it but by

staying very close to the initial product (eg Capture liposomes or the Foltene principle). In other

cases, the line is launched as a complete ensemble, with many complementary products linked by a

single central concept (for Studio it was allowing youngsters to do their own hair and give themselves

a „look‟). The eventual extension of the line will involve only the marginal costs linked to retailers‟

discounts and to the packaging. It does not need advertising. It should be compared to the marginal

number of consumers that could be won. As one can see, the line brand strategy offers multiple

advantages:

i) it reinforces the selling power of the brand and creates a strong brand image

ii) it facilitates distribution for each line extension

iii) it reduces launch costs.

The disadvantages of the line strategy lie in the tendency to forget that a line has limits. One should

only include product innovations that are very closely linked to the existing ones. On the other hand,

the inclusion of a power ful innovation could slow its development.

The range brand strategy

Campbell‟s Soup, Knorr, Bird‟s Eye and Igloo all propose more than 100frozen food products. But

not all range brands are this extensive. The Tylenol range now covers a number of different products.

Range brands bestow a single brand name and promote through a single promise a range of products

belonging to the same area of competence. In range brand architecture, products guard their common

name (fish à la provençale, mushroom pizza, pancakes with ham and cheese in the case of Bird‟s

Eye). In the Clarins cosmetic range, products are named „purifying plant mask‟, extracts of „fresh

cells‟, multi-tensor toning solution, day or night soothing cream, etc. Range brand structure is foundin the food sector (Green Giant, Campbell, Heinz, Whiskas and so on), equipment (Moulinex, Seb,

Rowenta, Samsonite)or in industry (Steelcase, Facom). These brands combine all their products

through a unique principle, a brand concept, as shown in illustration.



1) The brand can easily distribute new products that are consistent with its mission and fallwithin the same category. Furthermore, the cost of such new launches is very low.

Umbrella brand strategies

Under the term „umbrella brand‟, we find in fact two modes of implementation in companies, the first

relatively liberal towards products and subsidiaries, the other exercising real control. We shall

examine both in turn: the first is in reality a house of brands, the other a branded house.

The flexible umbrella brand

The flexible umbrella brand The flexible umbrella brand The flexible umbrella brand The umbrella

brand strategy is characterized by a single brand level: the products are not given a daughter brand.

They may possibly be given codenames, but only with the aim of identifying them in catalogues or

price lists. Philips televisions are known as „televisions‟ (whereas Sony‟s is known as a „Trinitron‟),

Philips razors are known as „razors‟, and so on.

Unlike the product brand, where a brand relates to a single product and vice versa, the case of Philips

underlines that here the umbrella brand covers several product categories, both figuratively and in

reality. This is the principal advantage of this strategy, moreover: offering a common umbrella, a

common name, to a highly diversified range.



The aligning umbrella brand (master brand)

This is the second version of the umbrella brand. At first glance, in formal terms, nothing

distinguishes it from the previous version: the company still accepts only a single brand for the whole,

and consequently imposes descriptive names for the products and services or divisions and branches.

Here we find sub-brands. In practice, however, a gulf separates these two out workings of the

umbrella brand. Here the parent brand is mistress: it provides not just a name, but a frame of reference

behind which everything should align, in order eventually to become the embodiment of it, the living

spokesperson. Here the brand is the surrounding framework. This is the clearest example of what we

call a „branded house‟.

Source brand strategy

This is identical to the umbrella brand strategy except for one key point – the products have their own

brand name. They are no longer called by one generic name such as eau de toilette or eau de parfum,

but each has own name, eg Jazz, Poison, Opium, Nina, Loulou, etc. This two-tier brand structure,

known as double-branding, is shown in illustration.

Garnier for example wanted to become a source brand and abandon its previous endorsing brand

strategy. This is a delicate process for it means moving from patchwork to unity.



The Endorsing Brand Strategy

Everyone recognises famous car brands such as Pontiac, Buick and Chevrolet in the United States or

Opel in Europe. Next to their logos and to the signs of the dealers of these brands we always see the

two letters: GM. It is obviously General Motors, the endorsing brand. Again, what is the link betweenthe cleaner Pledge, Wizard Air Freshener and Toilet Duck? They are all Johnson products. The

endorsing brand gives its approval to a wide diversity of products grouped under product brands, line

brands or range brands. Johnson is the guarantor of their high quality and security. This having been

said, each product is then free to manifest its originality: that is what gives rise to the different names

seen in the range.

The illustration symbolises endorsing brand strategy. As one can see, the endorsing brand is placed

lower down because it acts as a base guarantor. Furthermore what the consumers buy is Pontiac or

Opel: they drive choice. General Motors and Johnson are supports and assume a secondary position.



ARVIND MILLS

History

The Lalbhais reasoned that the demand for fine and superfine fabrics still existed. And any Indian

company that met this demand would surely prosper. The three brothers, Kasturbhai, Narottambhai

and Chimanbhai, decided to set up a mill to produce superfine fabric. Next they looked around for

state-of-the-art machinery that could produce such high quality fabric. Their search ended in England.

The best technology of that time was acquired at a most attractive price. And a company called

Arvind Limited was born.

Arvind Limited started with a share capital of Rs 2,525,000 ($55,000) in the year 1931. With the aim

of manufacturing the high-end superfine fabrics Arvind invested in very sophisticated technology.

With 52,560 ring spindles, 2552 doubling spindles and 1122 looms it was one of the few companies in

those days to start along with spinning and weaving facilities in addition to full-fledged facilities for

dyeing, bleaching, finishing and mercerizing. The sales in the year 1934, three years after

establishment were Rs 45.76 lakh and profits were Rs 2.82 lakh. Steadily producing high quality

fabrics, year after year, Arvind took its place amongst the foremost textile units in the country.

In the mid 1980‟s the textile industry faced another major crisis. With the power loom churning out

vast quantities of inexpensive fabric, many large composite mills lost their markets, and were on the

verge of closure. Yet that period saw Arvind at its highest level of profitability. There could be no

better time, concluded the Management, for a rethink on strategy. The Arvind management coined a

new word for it new strategy – Reno vision. It simply meant a new way of looking at issues, of seeing

more than the obvious and that became the corporate philosophy. Thus in 1987-88 Arvind entered the

export market for two sections -Denim for leisure & fashion wear and high quality fabric for cotton

shirting and trousers. By 1991 Arvind reached 1600 million meters of Denim per year and it was the

third largest producer of Denim in the world.

In 1997 Arvind set up a state-of-the-art shirting, gabardine and knits facility, the largest of its kind in

India, at Santej. With Arvind‟s concern for environment a most modern effluent treatment facil itywith zero effluent discharge capability was also established.

Year 2005 was a watershed year for textiles. With the muliti-fiber agreement getting phased out and

the disbanding of quotas, international textile trade was poised for a quantum leap. In the domestic

market too, the rationalizing of the cenvat chain and the growth of the organized retail industry was

likely to make textiles and apparel see an explosive growth.

Arvind has carved out an aggressive strategy to verticalize its current operations by setting up

worldscale garmenting facilities and offering a one-stop shop service, by offering garment packagesto its international and domestic customers. With Lee, Wrangler, Arrow and Tommy Hilfiger and its



own domestic brands of Flying Machine, Newport, Excalibur and Ruf & Tuf, Arvind set its vision of

becoming the largest apparel brands company in India.

Journey of arvind mill

2010

Arvind launches The Arvind Store, a concept putting the company‟s best fabrics, brands and bespoke

styling and tailoring solutions under one roof. Arvind launches its first major Real Estate projects.

Arvind becomes one of India‟s largest producers of fire protection fabrics.

2007

Arvind expands its presence in the brands and retail segment by establishing MegaMart – One of

India‟s largest value retail chains.

2005

Arvind creates a unique one-stop shop service on a global scale, offering garment packages to reputed

national and international customers.

1997

India‟s largest state-of-the-art facility for shirting, gabardine and knits is set up at Santej.

1991

Arvind emerges as the third largest manufacturer of denim in the world.

1987-88

Arvind enters the export market for Denims with a dual focus - Denim for leisure and Denim for

fashion wear.

1980

Arvind records highest levels of profitability. The new strategy – „Reno vision‟, points at changing the

business focus from local to global, towards a high-quality premium niche market.

1934

Arvind establishes itself amongst the foremost textile units in the country.



1931

The inception of Arvind Mills Limited at the hands of three brothers - Kasturbhai, Narottambhai and

Chimanbhai Lalbhai

Arvind is amongst a few organizations worldwide with a portfolio of brands that are as distinctive andrelevant across diverse consumers. At Arvind, brands work across multiple channels, price points and

consumer segments. The expanse of the Arvind brandscape is spread across the Indian market with

around 273 standalone brand stores in addition to 975 counters selling through key accounts and

multibrand outlets across India.

BRAND STRUCTURE OF ARVIND MILL

Own brand

Mainstream

Zxcalibur gant

Flying machine

Licensened brand

Bridge to luxury

USA 1949

Energie

Joint venture brand

Bridge to luxury

Tommy Hilfiger

Popular brand

Ruf & tuf

New port university

Premium brand

USPA

Arrow

Izod

Lee

Wrangler



Popular brand

Cherokee

Mossimo

BRAND ARCHITECTURE OF ARVIND MILLS

ARVIND BRAND PORTFOLIO IS UNMATCHED IN INDIA

DIVISION OF ARVIND

DENIM

Shuttle looms for Selvedge denim

Name selvedge and Stretch selvedge

Unique Fibers like Excel, Jute, Silk, Linen

Natural Indigo and Vegetable dyes

Unique concept products like Indigo voiles & Handspun denim

Organic, BCI & Sustainable denim



The denim facility at Arvind is accredited with ISO 9001, ISO 14001, OEKOTEX 100, GOTS, and

Organic exchange standard. Our labs are certified by NABL (ISO 17025 certification) and customers

like Levi‟s, Lee, and Wrangler etc.

WOVEN FABRICS

Arvind has been well poised as a leading manufacturer of super fine fabrics in India. An

uncontested market-leader in the manufacture of voiles, Arvind still continues to manufacture the

traditional fabric for both domestic and international markets. The legacy of Arvind transcends

from the olden days into a golden future with a production capacity of 36 million meters per

annum. Arvind‟s voiles are primarily used as blouse materia l and are sold in the domestic market

through an impressive network of around 150 dealers, reaching over 5000 retail outlets

throughout India. High quality Swiss voiles are exported to Switzerland, Sri Lanka and countries

in the Middle East.

KNIT FABRIC

Arvind‟s knits department has an annual knitting capacity of 5,000 tons. The knits vertical has a

fabric dyeing capacity of 5000 tons per annum and yarn dyeing capacity of 1800 tons per annum.

Basic knits:

Jersey, Pique, Rib, and Interlock

Specialty knits: Yarn-dyed, Auto stripers, Jacquards, and Stretch fabric

Fibres: Cotton, Excel, Viscose, Modal, Polyester

Finishes: Mercerization, Brushing, Peaching, Aero-finish.

Marks & Spencer – Eddie Bauer – Zara – Josepha Banks

GARMENT EXPORT

Bottoms: 7.2 million pieces of jeans per annum

Formal & Casual tops: 6 million pieces per annum

Knit tops: 3.6 million pieces per annum

Gap Inc – Patagonia – Tommy Hilfiger – Quicksilver – Brooks Brothers – Silver Jeans – Calvin

Klein – FCUK – Pull & Bear – Jack & Jones – Energie – Esprit – S.Oliver – Mexx – Sisley –

Benetton – Coin



MEGA MART RETAIL

The Megamart stores range in size from 2000 sq ft to 65000 sq ft. The larger stores are called Big

Megamart and there are 6 such stores across Bangalore, Chennai, Pune and Mumbai. The smaller

formats spreads across the country are 205 in number. Megamart is expanding rapidly and is

expected to be a Rs. 1000 cr chain within the next two years.

The brands sold exclusively in Megamart include:

RUGGERS - SKINN - ELITUS - DONUTS - KARIGARI - MEA CASA - AUBURN HILL

BAY ISLAND - COLT - LEISHA- EDGE

ARVIND STORE Over a 1000 different fabric styles across shirting, suiting and denim

Leading apparel brands such as Arrow, US Polo & Flying Machine

Arvind Denim Labs (ADL), a bespoke denim concept offering customized washed denim

- a first of its kind in India and perhaps the world

Arvind Studio – A styling and tailoring solution to rival the best brands in the world

ENGINEERING

The Anup Engineering Limited (established in 1963), is the flagship Engineering Company of the

Lalbhai Group, and is a subsidiary of Arvind Limited. It is an accredited ASME “U” & “NB” stampand ISO-9001: 2008 certified company, conforming to specified standards. Anup has extensive

experience in working with critical metallurgies like low temperature CS, NACE/HIC, low alloy,

stainless steel, duplex, super duplex, monel, cupro nickel, etc. Anup is approved by IBR, CCOE &

TDC certifications, and works closely with and under the surveillance of renowned national and

international inspection agencies like Lloyds, BVI, DNV, EIL, Toyo Engineering, UHDE, and TUV

etc

TELECOM

Syntel is a division of Arvind. With more than a million users as on date, Syntel has a dominant

position in the Business Communication Solutions landscape offering a range of Analog and Digital

EPABX based enterprise communication solutions for SMEs and leading Corporates.

Some of our esteemed clientele includes:

Wipro, Whirlpool, Ashok Leyland, Blue Dart, Sahara Airlines, The Indian Armed Forces, State Bank

of India, The World Bank, ICICI Lombard, etc.

REAL ESTATE



INNOVATIVE FABRICS

MULTIPLE GROWTH ENGINE TO DRIVE ACCELERATED GROWTH



RAPID EXPANSION OF DISTRIBUTION OF BRAND IN DEPARTMENTAL STORE &

MULTI RETAIL OUTLET



LOUIS VUITTON MOËT HENNESSEY

History

The LVMH group was founded in 1987 as a result of the merger between Moët Hennessy and LouisVuitton, which served to create the world leader in luxury goods.

LVMH inherited a long history, and brings together noble professions, with deeply-rooted traditions

and a unique combination of internationally renowned brands.

The companies which form part of the champagne, spirits and leather goods division are over a

century old, and some were established more than two centuries ago. Moët & Chandon dates back to

1743, Veuve Clicquot Ponsardin to 1772, Hennessy to 1765; Johan-Joseph Krug founded his

establishment in 1843, while Château d'Yquem and its wines go as far back as 1593. The House of

Louis Vuitton was founded in 1854.

In perfumes and cosmetics and in fashions, the companies, sometimes created more recently, have

cultivated their international standing over a number of years. Guerlain goes back to 1829, Christian

Dior to 1947. Givenchy was founded in 1951, and launched its perfumes in 1957.

So in fact it was a series of successive mergers, motivated by the affinity of their core businesses,

which led to the establishment of the LVMH group.



Aegis of LVMH



Types of brand architecture

There are three key levels of branding:

Corporate brand, umbrella brand, and family brand - Examples include Virgin Group andHeinz. These are consumer-facing brands used across all the firm's activities, and this name is

how they are known to all their stakeholders – consumers, employees, shareholders, partners,

suppliers and other parties. These brands may also be used in conjunction with product

descriptions or sub-brands: for example Heinz Cream of Tomato Soup, or Virgin Trains.

Endorsed brands, and sub-brands - For example, Nestle KitKat, Cadbury Dairy Milk, Sony

PlayStation or Polo by Ralph Lauren. These brands include a parent brand - which may be a

corporate brand, an umbrella brand, or a family brand - as an endorsement to a sub-brand or

an individual, product brand. The endorsement should add credibility to the endorsed sub-

brand in the eyes of consumers.

Individual product brand - For example, Procter & Gamble‟s Pampers or Unilever's Dove.

The individual brands are presented to consumers, and the parent company name is given

little or no prominence. Other stakeholders, like shareholders or partners, will know the

producer by its company name.

A recent example of brand architecture in action is the reorganization of the General Motors brand

portfolio to reflect its new strategy. Prior to bankruptcy, the company pursued a corporate-endorsedhybrid brand architecture structure, where GM underpinned every brand. The practice of putting the

"GM Mark of Excellence" on every car, no matter what the brand, was discontinued in August, 2009.

In the run-up to the IPO, the company adopted a multiple brand corporate invisible brand architecture

structure. The company's familiar square blue "badge" has been removed from the Web site and

advertising, in favor of a new, subtle all-text logo treatment.



Strategic Considerations

Deciding what strategy to pursue in structuring the company brand portfolio depends on the answer of

a number of strategic issues. According to the article Brand Architecture: Strategic Considerations,

the issues to consider include:

Audience Diversity What are the target segments for your brand? Is the brand focused on just

one audience or must it appeal to many?

Product/Service Offerings How are other brands in the portfolio positioned and targeted?

Are some of your brands complementary, competitive or incongrue

Competitive Context What are competitive branding practices? How do customers view the

marketplace? Do your brands help you stand out and grab market share?

Brand Equities Do you have brands with a particular following or a unique heritage or equity

must be carried forward?

Geographic Needs How consistent are needs/preferences across cultures and markets?

Strong local brands might not work in other countries. Not every brand can “travel”.



Organizational Structures Who is accountable for branding practices and standards? What

are the political realities behind brands in your portfolio?

Ownership Does the organization have legal control over its brand? You‟ll have less leeway

with licensed brands.

Sources of Growth What businesses and brands are expected to drive future growth for your

company? Are they helping you pursue your strategy?

Purchase Criteria How do people buy your products? Do they ask for products by brand

name or do they ask for a generic name or your company brand name? Do your brands make

buying easier? How much do people want or need your brands?

Brand Performance How do brands perform against desired attributes? Is their positioning

clear and effective?

Brand Role What is role of brand in fulfilling the business model? How important is the

brand in driving awareness or creating loyalty?

Channels What channels and distribution methods are available and how are they used across

the brand portfolio?

Company Specific Issues What considerations are specific to your company or industry?

What might be technically correct might not be feasible in the reality of your company.

Sometimes theory has to bow to practicality.

The Multiple Brand Model

Many companies opt for Multi Brand Strategy in order to generate economies of scale by using the

basic advantages of the strategy. But it cannot be denied that Multi Brand Strategy can fail due to poor

management and due to adoption of unprofitable business models.

Multi Brand Strategy refers to a marketing strategy under which two or more than two similar

products of a firm are marketed under Different Brand names. In most of the cases, these products are

competing ones and are marketed under the Brand Names which are completely unrelated.

Several companies take up this Multi Brand Strategy, as the strategy offers some advantages:

First of all, by adopting Multi Brand Strategy, a company can obtain greater space in the market,

where little space is left for the competitor business houses.

Secondly, by promoting similar products under different Brand Names, a company can fill up the

Price Gaps and Quality Gaps of the target market. In this way, the market can become saturated with

the similar products of the same company.



In every market, there are some customers who frequently change brands in order to experiment with

products of different brands. By adopting the trick of Multi Brand Strategy, a company can serve

effectively to these Brand Switchers.

When a company undertakes Multi Brand Strategy, the managers of the company are bound tooperate efficiently as internal competition is generated at a high degree.

The decision of a company in adopting Multi Brand Strategy, depends on the success of the initial

brand. If the initial brand becomes successful, then through franchising and retailing, a company can

develop a second brand without generating much expense. The Franchises can promote both the

primary and secondary brand through same advertisement. The marketing department of the

company, can market the different multi brand products just in the way an agency works for multiple

clients. All these advantages of Multi Brand Strategy can generate economies of scale.

But, it should be mentioned here that, in spite of all the advantages of Multi Brand Strategy, there are

risks too which can challenge the success of this kind of strategy. It has been observed that, in most of

the cases, Multi Brand Strategy fail because of poor management and wrong choice of business

model.

is a favorite of strong brand managers in decentralized companies. You can market independent

brands to address discrete audiences. Acquiring and divesting companies is relatively simple, with no

loss of brand equity. This approach has risks, too. Investors don‟t always re cognize the scope andvalue of such companies – Cendant was not able to realize the true value of its business following this

approach. Cross selling is much more difficult. Supporting many brands is expensive and time

consuming.



Growth strategies in the luxury industry: the case of LVMH

Growth is extremely difficult to manage in luxury companies, as they have to strike a balance between

raking in the profits versus maintaining an exclusive aura around the brand and goods sold. Empirical

research in literature shows that multi-brand companies dominate in the luxury industry from adimensional point of view and all together retain a higher market share than mono-brand companies.

Also, there seems to be no significant difference in terms of economic performance between mono-

and multi-brand companies operating in different business segments of the luxury sectors. So, why is

the general trend in the luxury goods industry towards the consolidation and the promotion of multi-

brand conglomerates? The immediate answer lies in the importance of the intangible components of

luxury goods: in order to maximize the company dimensions and allow it to achieve a dominant

position in the market without destroying the brand equity, companies must accept the limits of brand

extension and move to the next step, i.e. brand portfolio; therefore the intangible components strongly

influence the decision to grow through the external acquisition of brands because of the need to find a

balance between the firm‟s necessity to grow and exclusivity, which creates high value for the finalcustomer.

LVMH, known as the luxury industry best player, has managed to formulate and execute this strategy

successfully. Headquartered in Paris, LVMH Moët Hennessy – Louis Vuitton is world leader in the

luxury sector with a unique portfolio of over 60 prestigious brands. The sustainability of its strategy of

growth through brand acquisition is mainly due to the following reasons:

Ability to grasp the sector specificities of the brand;

Creation of a balanced and attractive brand portfolio;

Management of the brand portfolio not just with a logic of maximizing financial results in the short

term but also with a logic of creating symbolic value for customers in the medium/long term;



Ability to acquire the adequate managerial to tools to reach an appropriate balance between brand

autonomy and integration, search for synergies and maintenance of the brand identity.

The resilience of the multi-brand strategy during the last financial crisis has shown its capability not

solely confined to managing cyclical patterns of luxury goods during good times but also to be able to

weather through extreme periods of down turn. LVMH as a group managed to recover from the crisisremarkably also because sales from a division or market could cross-subsidize losses made in another.

The diversity of LVMH‟s business allowed the possibility of LVMH to free resources to meet new

challenges and also take on emerging opportunities whereas other competitors in the same industry

were barely surviving. LVMH took advantage of this period to expand into the hotel industry, a move

indirectly strengthening specific brands in its portfolio. Also, despite facing a complex market,

LVMH has been able to discover the peculiarities of the Chinese consumer by leveraging on its

existing brand capabilities and also developing new competences together with local Chinese

managers. Up till date, LVMH has successfully managed the acquisition and positioning of the

Chinese brand Wenjun, one of China‟s top traditional spirits distilleries, because of the organization‟s

ability to adapt and learn. Accordingly, despite failed attempts at multi-channel marketing via theinternet, LVMH shows no slowing down when it comes to e-shops and has recently launched separate

e-stores for Kenzo and Loewe, two of the brands it owns. The point here is that, with an era of hyper-

competition and rapid change, LVMH as large as it seems, is nimble when it comes to learning,

adapting and reacting to contemporary challenges.

Overall, with LVMH‟s fundamental values propelling it forward, and financial bottom lines

restricting its parameters and overall direction, there is no doubt that LVMH has mastered the art of

the multi-brand strategy. Although, this must be said with caution, that this strategy is not for the faint

hearted or simply any aspiring conglomerate. Competitive advantages such as material scale

advantage, a stellar brand portfolio, balanced categories of goods and a wide geographic exposure are

built up over a long period of time, led by a strong leadership.



REFERENCES

http://www.answers.com/topic/brand-architecture#ixzz1snKPXroX

www.lvmh.com

www.arvindmills.com


http://www.arvindmills.com/

http://www.arvindmills.com/


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