Umbrella brand
Risks

A major risk of utilizing umbrella branding is that it may result unsuccessful in promoting new products if the company does not have a strong brand equity. Secondly, the consumer's experience with one umbrella branded product may affect their perception of other products and services falling under the same corporate umbrella as well as the brand itself. Consequently, if one umbrella branded product does not satisfy the consumer's expectations, the other products sold under the same brand are also likely to suffer. Thus, the company might result in a negative brand equity (also known as brand equity dilution). Thirdly, umbrella branding is only beneficial when promoting relatable products through which consumers could recognize the brand. For instance, the Starbucks brand is associated to coffee-related products and therefore consumers would mainly recognize the brand on products related to the specific market. Lastly, cannibalization (reduction in sales volume due to the introduction of a new product by the same company) may result when related products are introduced under the same corporate brand as internal product competition will lead to consumers choosing between products from the same brand, stunting future investment into product creation of the same product line under the corporate umbrella.
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