Tamimi Energy Branding Strategy Case Solution
Tamimi group of companies is one of the renowned groups of Saudi Arabia, which has been providing its services in many sectors for more than 50 years. Tamimi energy holding company owns nine companies along with three joint ventures, which are working in different fields, including power generation, water, gas, oil, utilities and renewable energy. Tamimi energy holding company is one of the subsidiary companies of Tamimi group, which was established in 2017.(Energy, 2019)
Tamimi energy holding company was established in 2017, and it is in a growing phase. Tamimi energy holding company has to formulate its new branding strategy in order to cope up with its competitors. Tamimi energy has to decide what type of brand architecture it should apply to its growing business, whether all its subsidiaries should be branded separately or branded under one brand name; “Tamimi Energy”.
Tamimi energy holding company owns nine subsidiary companies and three joint ventures. The company was established in 2017, hence it is in growing phase and its structure is not mature yet. Additionally, Tamimi energy holding company is not well known in the Saudi Local Market. Tamimi energy holding company has to formulate its new branding strategy and has to decide whether all its subsidiaries should be branded separately or branded under one brand name i.e. Tamimi Energy. Moreover, non-availability of marketing departments or the marketing representatives of the parent company in any subsidiary of Tamimi energy has made the situation worse. (Alpe, 2013)
Tamimi energy holding company can adopt one of the following effective branding strategies, such as; House of Brands, Branded House, Endorsed Brands, Sub-Brands or Hybrid, in order to run its operations smoothly. A complete detailed analysis has been performed in order to analyze that which strategy is best for Tamimi energy to adopt. (DA Aaker, E Joachimsthaler , 2000)
House of Brands
House of brand strategy includes a wide portfolio of brands. It suggests that every subsidiary company has to set its own brand and its positing, without consulting its parent company. It depends on subset branding without considering primary branding. Unilever and P&G are using house of brand strategy for their products, which allows them to enjoy different positioning for their different products. (See appendix 2 for real role model for house of brand strategy) (S Laforet, J Saunders, 1999)
House of brand strategy is a unique strategy that offers many advantages. It helps in targeting different market segment, and helps to increase the viability. Each brand fights on its own, without damaging other brands or parent company’s positioning. It minimizes the risk of failure in launching new products with new brand over primary company.
House of brand strategy requires huge investment and resources, because each product has different brand name with different features. All products spend on marketing of their brands. Also, it creates confusion between brands, such as:Which company does this brand relate to or which company owns the brand?(See appendix 6 for Pros & Cons of Branding Strategies)
Branded house strategy is also called the one firm brand strategy. In this strategy, the parent company uses its own name for branding all of its existing subsidiary products. It uses one logo, one marketing strategy, similar positioning and similar target market. Apple and Google are using branded house strategy for their products, which allows them to market their all products under one umbrella. Such as, Apple’s products iPhone, iPod, iTunes and Mac, all are marketed under Apple brand. (See appendix 1 for real role model for branded house strategy)(L Muzellec, MC Lambkin, 2009)
Branded house strategy facilitates all of the products with similar positioning. All subsidiary products can enjoy same positioning, budget, branding and positioning. If Apple launches its new product, people will build a strong product’s image ultimately, because of its prevailing unique positioning. It increases the efficiency and requires less budget. Additionally, it helps in reducing the competition, and reduces the chances of greater risks for new products, because of an already built customer trust.
Its biggest associated disadvantage is its goodwill. If the brand is publicly known for lower cost provider, and then if they want to launch a new product with different features, public will not accept it because of its existing brand positioning. Furthermore, if the parent brand is weak, it will badly affect the new product’s positioning.(See appendix 6 for Pros & Cons of Branding Strategies)
Hybrid brand strategy is one of the mixes of two strategies; the house of brand and the branded house. It offers unique brands for each subsidiary product, along with using the parent company’s brand name too. Pepsi-Cola and Coca-Cola are two main examples of hybrid brands. They both use their initial company brands,while offering different products. (See appendix3 for real role model for Hybrid Brand Strategy)(SP Douglas, CS Craig, 2001)
Hybrid brand strategy offers unique positioning for different brands, and also helps in achieving the brand loyalty of parent company.It increases the efficiency and requires lesser budget.(See appendix 6 for Pros & Cons of Branding Strategies)
It can weaken the image of a newly established brand because of the weak positioning of the parent company’s brand. Moreover, like Pepsi-Cola has different taste and positioning as compared to Coca-Cola and it has gained more less loyal customers in some countries, but less loyal customers in other countries. Hence, their new brand or product will only be successful in those countries in which they have loyal customers.
Mechanism for selecting Brand Strategy
After giving due diligence to all the branding strategies discussed above, and analyzing the current situation of holding and subsidiaries companies thoroughly; it is revealed that Tamimi Energy should adopt the House of Brands strategy. The reason behind it is that this brand architecture proves to be a stronger base of the success for those companies that have a variety of products and services in their portfolios.
The strategy is also workful for Tamimi, because it has nine subsidiaries with a separately established market of each, in the Saudi Local market. Almost all the subsidiaries are known for their work in industry,which is a plus point for the holding company to capture a large market share cost effectively. Positioning all the subsidiaries as a separate brand will give them a different feel and look for their separate target audience, and it will also widen the reach of the brand. It also provides a safety shield for the holding company.In case of bad reputation of any single brand of the holding company or any other subsidiary the company will not be affected by it. The successful implementation of this brand strategy is being enjoyed by Unilever and P&G.Unilever and P&G use house of brand strategy, because of their huge product portfolios……………..
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