Wireless Branding

Multiple branding is a common practice in all large, consumer-oriented corporations. Whether it is the seemingly countless household products sold by Proctor & Gamble or the many lines of automobiles sold (or recently retired) by General Motors, they not only market products under many brands, these products even compete with each other. The wireless carriers in Canada do the same, with the latest entry being the rumoured chatr by Rogers Wireless.

Since this practice of multiple brands may on the face of it seem both bizarre and counter-productive it is worth a look. After all, they are businesses so there must be an advantage to the practice. In particular, there are reasons why the big three wireless carriers -- Bell, Telus and Rogers -- all do it (Fido, Koodo, Solo). Roger's chatr will merely be the latest to appear on the scene. These brands are, as one outfit irreverently calls them, pseudo-MVNOs.

Just as with P & G and GMC, the brands they market often share the same factories, business structures and components, only differing in style and presentation. That is, they differ in their marketing. The wireless carriers' brands are the same: once you've bought your phone and service contract, you use the same networks as the carriers' primary brands, and suffer under the same customer service, billing practices, and contract terms and conditions. Indeed it's worse than with cleaning products and cars since with those there is at least a chance that there are some small differences among the branded products.

There are three key reasons, in my view, why corporations follow the multi-branding marketing strategy:

1. Illusion of choice - Consumers like choice. In a market where there is only one choice, even if that service or product is of decent quality and offered at a fair price, it will be treated with suspicion and attract attacks, whether or not those attacks are justified. Carrying the costs of multiple brands (and the costs are many) shields large corporations with a monopoly or dominant position in their market. People are not blind to the tactic, yet it is good enough to successfully deflect criticism in many cases. All it takes is a different line up of phones and service plans to complete the illusion.
   
   
2. Corporate aversion - We tend to celebrate the sudden emergence and success of upstart companies. We do this since we tend to identify with or envy their success, knowing that in our economy and society that, with a little luck and skill, we could each do the same. However when these companies then grow to be massive and ubiquitous we become uncomfortable and suspicious with them, just as we do with any large, dominant corporation or institution. For example, Google and Apple. Right or wrong, the public's reaction is pretty typical. By distributing their public image across multiple brands, much of this animosity can be defused by the corporations.
   
   
3. Market dilution - If I give you a coin and you flip it, there are two possible outcomes. Label each side with the name of a large wireless carrier, such as Rogers and Bell. Now I give you a six-sided die and to the other sides I add four more names: Solo, Fido, chatr and Koodo. You now have six possible outcomes when you roll the die, or at least you might think so. Let's now go further to an octagonal die, to which we've added Wind and Public Mobile. Roll the die and there is just a 1-in-4 chance you'll get one of the new entrants. That is market dilution. It's all completely transparent yet -- in concert with the illusion of choice -- it reduces the marketing effectiveness of the new entrants. All these brands are more than just names, as they must be to achieve dilution, and therefore include distinct advertising campaigns and retail channels. A naive, inattentive or rushed user is thus more likely to encounter an incumbent when shopping.

Roger's intention with regard to the final point -- market dilution -- seems fairly clear, as the following article extract indicates:

Analysts suspect that the brand will toss confusion into the crowding Canadian marketplace by adding yet another new option in addition to the three new entrants and four existing budget “flanker” brands owned by the incumbent wireless carriers. BCE Inc., for example, owns both Solo Mobile and Virgin Mobile Canada, while Rogers’ already owns Fido, and Telus Corp. has Koodo Mobile.

There is also a sense that Rogers will use the brand only in places where the company faces fresh competition from new entrants – such as Wind Mobile, Mobilicity and Public Mobile, and later cable companies launching wireless services – and not in areas where it would simply be providing consumers with a lower-cost option to its existing services.

Multiple branding strategies don't always succeed, but very often they do. With an increasing number of market commentators and media now ready to point out the translucent relationship of many wireless brands to their corporate owners -- to distinguish them from truly distinct brands with their own networks -- there is a good chance that, over the long term, consumers will see through the tactic more often. This does not mean that the new entrants will win consumers' business, only that they will stand a better chance of competing on their merits.