Recently, we were approached by a marketing director of a high profile boutique luxury real estate marketing firm that is the market leader in their area, with an important question that we hear quite often:   

“Higher priced homes in our marketplace are not selling very fast.  We see the opportunity to sell a high volume of lower priced homes in surrounding neighborhoods.   Should we create a new brand for this market segment or keep the same brand?”   

There is a risk of keeping the same brand name when you change the identity of your services.   The owners of the lower priced homes may feel intimidated by your brand which is already associated with higher priced homes.  The owners of the higher priced homes may feel like you have diluted the quality of “their” brand.   There may be no intention of being pretentious on anyone’s part, but brand perception plays a very important role in the listing process and in the referral process as well.

The entire exercise of personal or company branding or product branding is to achieve top-of-mind status in a specific category of business or a product category. The brass ring of branding is to be totally identified with a category. The grand prize is being the “category killer” like Scotch Tape. The crowning glory is having your brand name become a verb that literally means that category like “to Xerox” (copy) or “to Fed-Ex” (ship overnight), or “to Google” (search on the internet).

Why would you want to blur a brand that is so sharply defined and associated with a specific category when you can easily create a new brand name for the new category?  It just does not make good business sense.  But, if you create a sub-brand be sure to stake your claim as the best brand in the new category so your sub-brand can become top-of mind in that category.

This week we were sent a few bottles of wine from a Napa Valley wine club to which we belong.  Unbeknownst to us, this famous winery created a sub-brand with a new name.   They basically rebranded the wines that they were already producing and we were enjoying from the adjacent area, Alexander Valley. Previously, these wines had the same brand name as their Napa & Sonoma Valley wines.  We thought there was some mistake and were pre-disposed to tasting an inferior wine, just because of the brand name change.  

There was a breach of trust that occurred because there was no bridge in the communication that endorsed the new brand.   All that was necessary was a very simple statement, something like this: 

“We felt that our wines from the Alexander Valley had a distinct set of characteristics due the special micro-climate there and these wines merited their own label”

The key to serving multiple price points is definitely to create a separate brand name or a sub-brand. But, that does not mean that your sub-brand should be perceived as sub-par.


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