In the late ‘90s and early “aughts”, brewing giant MolsonCoors was under siege. Its long running market share battle with Labatt’s was, for all intents and purposes, over. Molson won. But now sales of its most popular brews were under assault by a legion of smaller microbreweries that were popping up everywhere.
Consumer preferences were starting to shift away from mainstream beers to microbrews, which created an existential crisis for Molson executives.
Back in 2000, I was a junior account manager at Molson’s agency of record. The challenge we faced was how to change this narrative. Molson’s product was seen as old, boring and out of touch with the new generation of consumers. We needed to change that tune.
The answer, in Molson’s case, was to change the conversation altogether. Molson introduced a new brand – Rickard’s – to the market, and positioned it directly against the newer craft beers.
Molson didn’t have a huge marketing budget to launch the new brand – at least by beer industry standards. We had to go a bit guerilla with this launch. I hit the road with a Molson Brewmaster for a West Coast media tour. We drop-shipped thousands of cases of free beer to radio stations and morning shows everywhere.
The end result? One of the most successful new product introductions in the company’s history. And our strategy of pairing beer with food and flavors endures to this day.
I bring up this distant memory because I see so many parallels in the discussions we have today with real estate brokers. Companies whose brands have seemingly plateaued for all kinds of reasons are now staring down new entrants who are peeling off share both at the high end and entry level.
Traditionally, real estate brands have addressed differing consumer needs by going in one direction: up-market.
The most prevalent way to do this has been to create new extensions of their brands to focus on the luxury category.
This is what marketers call umbrella branding – the extension of a single brand name over the sale of two or more related products. In the consumer packaged goods (CPG) world, think Coke Classic and Coke Zero. Or Bud and Bud Light.
In real estate, think Coldwell Banker and Coldwell Banker Previews or RE/MAX and the RE/MAX Collection.
There are lots of good reasons to engage in an umbrella branding strategy. You can aim the sibling brands at different customers and needs, but still draft off the reputation and awareness of the brand parent.
The downside, of course, is without genuine distinctions between the brands, the consumer ultimately cannot differentiate between the two and, depending on the final execution of the brand extension, you run the risk of damaging the entire family if it’s botched (think “New Coke”).
The second way is to do what Molson did – to run a family of brands and introduce a completely new brand to service an emerging segment. By the way, this tactic is not uncommon in the world of cars (Scion, Toyota, Lexus), travel (Aloft, Westin, St. Regis) or fashion (Old Navy, Gap, Banana Republic).
And while building a new brand can be a very expensive proposition, it does give you a blank slate to work from in terms of crafting your new brand’s positioning.
One tried and tested shortcut here is to acquire a brand that already owns the market you are coveting. You see this over and over with true CPG brand managers: like when SC Johnson acquired Mrs. Meyer Clean Day cleaning products, or when Unilever bought Ben & Jerry’s Ice Cream.
Acquisition gets you into new categories of consumers you aren’t serving, quickly.
Again, we have seen this in the upper end in real estate. For example, Ebby Halliday in Dallas acquired Dave Perry Miller and still runs it like a separate brand. Virginia-based broker Long & Foster has done much the same with its luxury niche brand W.C. & A.N. Miller in D.C.
But I sense these companies are the exception not the norm.
A “family of brands” strategy is becoming an increasingly viable approach for more and more big brokers. Too many are watching the world change around them and wondering what to do.
As a brand and marketing agency, we are currently helping several of them explore the possibilities.
Extending a real estate brand’s reach it not just about new price points, but also new experiences. I’ve written before about Snake People Real Estate and I think it applies now more than ever.
Molson showed me how a company can identify and react to a change in conditions by bringing to market a premium offering that played to the shift in consumer expectations.
I hope to see it again soon.