“Voicemail” question “Is launching a new brand from the same company more preferable than franchising?”

We have a voice in question from an anonymous listener “Is launching a new brand from the same company more preferable than franchising?”

These are two distinct topics, and I am not quite sure how they relate. Unfortunately, it was an anonymous sender. The listener who sent the ‘voice’ question did not leave a name or email address.

Let’s see. Let me tackle this as two questions. The first one is “Launching a new brand from the same company.” If the new brand is not targetting a different customer, then that should be no problem. I assume the new brand is still on-brand with the company’s overall branding.

However, if the new brand being launched is targetting a different set of customers, it’s best to launch the new brand as another company.

For example, when the Toyota Motors directors decided to go after the luxury class of automobiles, they knew they could not launch the new brand of cars under the ‘Toyota’ banner.

The Toyota brand stood for quality and affordability. The target market is the middle class and lower middle class. Coming out with a luxury brand of cars would confuse buyers. The target market of the new vehicles is the upper class of buyers. These target customers will not likely buy ‘Toyota’ cars for personal use. They are after prestige and luxury.

So as not to confuse their existing ‘Toyota’ market and their target luxury market, the car manufacturer decided to create a separate branding and company for it. So they came out with the Lexus brand of cars. Lexus was made to go after the market of Mercedez Benz and BMW. They offered the same luxury level of automobiles with reliability and high quality at more affordable pricing that Japanese manufacturers are known for. So one conglomerate is coming up with two brands of cars.

Now, let us discuss the second topic – franchising. I don’t have enough context to reply correctly. Hopefully, the listener that sent the question will be able to read this and send a follow-up question. Please provide a little bit more context so I can properly reply.

In the meantime, have a good day, everyone, and be safe.

If you have a question in mind, please send your question via the link below.


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