Sub-brands are product or service whose character and brand values are distinct from, but related to, its parent brand. Sounds good right? When your business grows, you naturally introduce more products and services to better serve your customers. This instinctively calls for the introduction of sub-brands.

However, what your brand builds, sub-branding can destroy. Too many people think in terms of how a sub-brand extends their brand, but neglect how customers think.

In short, sub-brands can be incredibly confusing for your customers. This is the danger of sub-brands.

The common thinking for most people is to leverage the well-known core brand at the same time as they launch secondary or sub-brands to move into a new territory or introduce new products and services. For example, when Holiday Inn wanted to extend their brand by introducing a higher-end option so they came up with “Holiday Inn, Crowne Plaza.”

Sounds like a great idea in a vacuum; a hotel chain trying to gain a piece of the more lucrative upmarket sector. However, their existing brand wasn’t meant to be leveraged up.
Put another way, in the way customers thinks, did anyone ever walk into a Holiday Inn and ask the clerk at the front desk: “Don’t you have a more expensive hotel I can stay at?”

The fact of the matter was this sub-brand was dragged down by the parent brand. Customer research at Holiday Inn Crowne Plaza produced what you might have expected: “It’s a nice hotel, but it’s a little expensive for a Holiday Inn.”

Customers have a myriad of choices in today’s marketplace. Why wouldn’t they choose the Ritz, Hyatt or Marriot if they wanted a higher end option? Why would they spend all that money to stay at a Holiday Inn?
The point being is you can’t apply your own branding system to a market that sees things differently. What you see as a sub-brand, the customer often sees as a service or a product. What you see as the umbrella brand or megabrand, the customer sees as your brand.

So how do we create a sub-brand? Should we even introduce sub-brands? Sure. If the sub-brand doesn’t detract from the essence of the brand, that singular idea or concept that sets you apart and that customers know you for. As soon as you start feeling the need to leverage your brand to introduce new sub-brands you are chasing the market, instead of building your brand. Only introduce sub-brands if their idea, value, and service is in line with your brand. Otherwise, call them something different completely, and seriously consider if they are needed at all.