Flagship brand can be defined as a forerunner brand in a company’s portfolio that almost defines the major source of its revenue, cash flow, core identity and prestige in the market. This is the brand that a company would vigorously defend in the market to safeguard its present and future. This is the brand that a company would spend its core promotion budget for.
In many cases, flagship brands can become synonymous to a company’s identity. Nestle’s “Maggie”, ACI’s “Savlon”, Unilever’s “Lux” could be such examples. Many stakeholders, specifically retailers, would refer to Nestle as “Maggie Company”. For others, Unilever is known as Lux company. Advantages of developing and sustaining a flagship brand are many. First, line extension of an established brand could be easier, with less promotion budget to worry about. Of course, not sacrificing or diluting the existing image of the brand itself.
Second, without a flagship brand, a company would become extremely vulnerable to competition when attacked from all fronts by its rivals. Flagships usually have almost untouchable image in the market that is easy to defend.
Third, sometimes renowned brands launch supplementary “fighter” brands to offset attacks from cheaper national or store brands. Fighter brands are meaningful as long as the flagship exists in the market. For example, cell phone brands like Nokia and Samsung have introduced cheaper lines to fend off competition from cheaper generic Chinese phones. Without the existence of flagship brand, in other words, if a company fails to establish a flagship in the market, all fighter brands would turn out to be fighters defending nobody!
Fourth, flagship brands automatically elicit trade or middlemen cooperation. Distribution and reward policies can be crafted in company’s favor when flagship brands exist. It is all about the inherent capability to negotiate when there is a flagship in your portfolio. In other instances, push sales to retailers can take place for lesser known or new brands from the same company by tagging-in the sales of flagship with that of the new brand. It can also happen without tagging-in sales, simply by capitalizing on the confidence of retailers on the flagship and pairing the same confidence with its new siblings.
It turns out that, without a flagship brand, it would be extremely difficult to create and sustain a core competitive identity in the market. If you have not thought of investing in one of your company’s brands with a view to achieving this end, it is high time you thought about it.