In today’s highly competitive business landscape, a robust brand strategy is crucial for any organisation, especially large conglomerates that bear a family name. A well-defined brand strategy can not only establish a strong market presence, it can also mitigate potential conflicts, ensure consistency, and protect the brand’s legacy.
The Need for Brand Management Policies
For conglomerates, a brand is much more than a logo or a name. It is a representation of trust, reputation, and a promise of quality to consumers. The absence of a clear brand management framework can lead to disputes, fragmentation of brand equity, and reputational risks, making it imperative for businesses, especially family-led enterprises, to implement structured brand management policies, which clearly define ownership, usage, and licensing terms.
Risks of Not Having a Brand Policy
Without a well-defined brand policy, businesses expose themselves to several risks that can affect their operations and reputation:
- Legal Disputes: Undefined ownership of trademarks can lead to conflicts between stakeholders, including family members, resulting in prolonged and expensive legal battles and lost business opportunities.
- Brand equity Dilution: Inconsistent use of the brand across different entities or sectors can confuse customers, erode trust, and diminish brand value.
- Reputational Damage: Negative actions even by a single stakeholder can tarnish the entire brand, impacting consumer trust and shareholder confidence.
- Fragmentation of Brand Equity: In the absence of centralised ownership, competing factions might use the brand differently, weakening its collective strength and market perception.
- Operational Inefficiencies: Misaligned branding strategies across verticals can hinder marketing efforts and lead to lack of synergy between business units.
- Loss of Goodwill: Years of investments in building a brand’s reputation can be undermined if disputes or mismanagement arise, leading to significant loss of goodwill.
- Consumer Confusion: Undefined usage of the brand by different fragments of the business, led by different factions can cause consumer confusion.
Case Studies: Lessons from Industry Leaders
India has several examples of conglomerates that have successfully navigated the complexities of brand management, showcasing effective strategies to unify, protect, and expand their brand presence:
Tata Group
The Tata Group exemplifies centralised brand management. The “Tata” trademark is owned by Tata Sons, the holding company, which licences it to subsidiaries across sectors, such as steel, automobiles, and IT services. This strategy ensures consistent brand representation and safeguards the brand’s intellectual property.
Aditya Birla Group
The Aditya Birla Group employs a hybrid strategy, combining the corporate brand with individual product identities. While the overarching “Aditya Birla” name represents the group’s commitment to excellence, subsidiaries such as Louis Philippe and Peter England operate with distinct market presences. All trademarks are centrally owned by Aditya Birla Management Corporation Private Limited, ensuring alignment and protection across its ventures.
Reliance Industries
Reliance adopts a diversified strategy, where each business vertical operates under its unique brand identity, such as Jio (telecommunications) and Reliance Fresh (retail). While benefiting from the credibility of the Reliance name, this approach allows each vertical to cater to specific market segments with tailored branding.
The Lodha Case
The recent legal dispute involving the Lodha brothers highlights the importance of clear brand ownership and usage policies.[1] The case revolves around disagreements over the rights to use the Lodha name as a brand. Macrotech Developers, led by Abhishek Lodha, filed a petition in the Bombay High Court to prevent entities associated with his brother, Abhinandan Lodha, from using the “Lodha” brand name. The petition underscores the significant goodwill associated with the “Lodha” name, citing revenues exceeding ₹91,000 crore and marketing investments of ₹1,700 crore between FY14 and FY24.
While the outcome of this case is yet to be determined, it serves as a reminder for all businesses — especially those with familial ties — to prioritise their brand management policies. Having clear policies in place can help avoid conflicts that threaten the very equity the brand has worked to build and ensure that the family legacy is preserved for future generations.
Guardrails for Effective Brand Management
To avoid conflicts and protect brand value, conglomerates should establish the following guardrails:
- Centralised Ownership: All trademarks and brand-related intellectual property should be centrally owned by a holding company or trust. This ensures clear accountability and prevents misuse.
- Defined Usage Policies: Establish comprehensive guidelines for brand usage, specifying who can use the brand, under what circumstances, and for which business activities.
- Family Governance Agreements: For family-led enterprises, create agreements that clearly define roles, responsibilities, and decision-making processes related to the brand.
- Licensing Frameworks: Implement licensing agreements for subsidiaries or related entities to ensure consistent use and quality control.
- Conflict Resolution Mechanisms: Develop internal mechanisms for resolving disputes, minimising the risk of prolonged legal battles.
- Periodic Audits: Conduct regular brand-usage audits across business verticals to ensure compliance with established policies.
- Succession Planning: Prepare for future transitions by clearly defining how brand ownership and usage will be handled, in the event of leadership change.
Conclusion
For conglomerates, particularly those with family-associated names, strategic brand management is not a luxury — it is a necessity. Establishing centralised ownership of trademarks, aligning brand usage with corporate vision, and implementing proactive brand policies can prevent conflicts and ensure the brand’s longevity.
[1] Billionaire Lodha brothers clash over brand rights, Bombay HC to hear case | Company News – Business Standard
