Dual branding strategy for a successful new productlaunch in China

Pong Yuen Lam a,*, Annie Chan b, Hannie Gopaoco b, Kevin Oh b,Tsz Him So a

aBusiness School, The Chinese University of Hong Kongb Ipsos Hong Kong

Business Horizons (2013) 56, 583—589

Available online at www.sciencedirect.com

www.elsevier.com/locate/bushor

KEYWORDSBranding strategy;Line extension;New product launch;Product name;Minute Maid;China market

Abstract Marketers may increase the chance of success for a new product launch byusing a sub-brand name and a parent brand name simultaneously. In this article, wereport the successful case of using two brand names–—dual branding strategy–—bypractitioners in China for the Minute Maid Orange Pulp juice drink launch. A suggestivesub-brand name helps consumers recall the key benefits and features of the newproduct. A suggestive parent brand name communicates the benefits of the productcategory. A dual branding strategy addresses the problem of using only one brandname for a new product launch. After the successful launch of the first new product bya parent brand, marketers are able to launch other new products under other sub-brand names in the future to meet different consumer needs. Marketers may use thesame parent brand to introduce different products to build scale for the brand, andare able to clearly differentiate the different product offerings under different sub-brand names. If a company acquires a brand from another company, a marketer mayposition the acquired brand as a sub-brand under the parent brand if the marketer hasdefined the business scope of the parent brand broadly enough and with a suggestiveparent brand name.# 2013 Kelley School of Business, Indiana University. Published by Elsevier Inc. Allrights reserved.

1. Branding strategies for newproducts

Marketers often conduct research to qualify theproduct concepts of new products before they are

* Corresponding authorE-mail address: howardlam@stanford.edu.hk (P.Y. Lam)

0007-6813/$ — see front matter # 2013 Kelley School of Business, Ihttp://dx.doi.org/10.1016/j.bushor.2013.05.003

launched in the market. Marketers want to createand select product concepts with higher purchaseintention scores and overall liking scores to increasethe chances of success in the marketplace. Given aproduct concept, should the brand name be sugges-tive or non-suggestive to enhance the product con-cept scores? How many names should the marketercreate for a new product?

ndiana University. Published by Elsevier Inc. All rights reserved.

584 P.Y. Lam et al.

1.1. Suggestive or non-suggestive brandnames

Keller, Heckler, and Houston (1998) have examined theeffects of a brand name’s meaning. Their findings indi-cate that compared to a non-suggestive brand name(e.g., Emporium televisions), a brand name that ex-plicitly conveys a product benefit (e.g., PicturePerfecttelevisions) produces greater recall of an advertisedbenefit claim consistent with the brand name’s con-notations. Keller et al. (1998, p. 56) state the follow-ing implication of their research findings:

Marketers may be better off adopting moreflexible branding strategies when introducingnew products by using non-suggestive brandnames if they anticipate the possibility of a laterneed to advertise additional benefit claims.Alternatively, if [the] marketer chooses sug-gestive brand names to introduce new prod-ucts, they must be willing to commit enoughtime and resources to reposition the brand if itlater becomes necessary, or must be willing tointroduce new brands or sub-brands to captureproduct positions that would be difficult toattain with existing meaning-laden brandnames. Nevertheless, such marketing maneu-vers could be a long and expensive process.

For instance, Procter & Gamble (P&G) marketerscreated the suggestive Chinese brand name of ‘SoftSmooth ’ to introduce Rejoice, its innovative2-in-1 shampoo and conditioner product, to HongKong and mainland China. The ability to convenient-ly obtain soft and smooth hair was a key benefit forconsumers that used this 2-in-1 product, and Rejoiceachieved market share leadership within 1 year ofits launch. However, in subsequent years, P&G couldnot easily add other new hair care products underthe Rejoice brand name. In particular, a large groupof consumers wanted healthy and shiny hair, andthese consumers preferred to use shampoo andconditioner in a stepwise fashion. On the otherhand, the key benefit of Rejoice was the conve-nience of achieving soft and smooth hair through theuse of one bottle of a 2-in-1 shampoo and condi-tioner product. Furthermore, the Chinese brandname for Rejoice suggested its ‘soft smooth’ ef-fects. As a result, P&G could not effectively reposi-tion Rejoice to offer other hair care benefits or usethe Rejoice brand to introduce profitable hair styl-ing products to ‘fix’ hair. Instead, P&G had to createanother new brand, Pantene, and heavily invest inbuilding Pantene’s brand image and its ability toproduce healthy and shiny hair. The Chinese namefor Pantene, , was non-suggestive, and was theMandarin phonetic translation of ‘Pantene.’

1.2. One name or two names?

Could we launch a new product with two names atthe same time, a suggestive sub-brand name and asuggestive parent brand name? Is this approach abetter branding strategy for practitioners than com-mitting time and resources to reposition a brandlater? A suggestive sub-brand name communicatesthe new product’s features and benefits, whereas asuggestive parent brand name allows marketers toadd other new products with sub-brand names in thefuture. If a dual branding strategy with two namesworks for a new product launch, the marketer is thenable to build the business in three strategic steps:

1. Launch and build the sub-brand to a critical massby focusing on the key attributes and benefits ofthe sub-brand;

2. Communicate the overall umbrella benefit of theparent brand; and

3. Introduce other line extensions with sub-brandnames, and continue to build scale for the parentbrand.

Consider how Coca-Cola Company marketers inno-vatively used two brand names simultaneously forthe successful launch of the Minute Maid OrangePulp juice drink in China in 2004. This new productgarnered such commercial success that it drovestrong performance for the Coca-Cola Company inChina (Coca-Cola Company Annual Reports, 2007).Minute Maid Orange Pulp also grew into the Coca-Cola Company’s 14th brand to achieve annual retailsales of more than U.S. $1 billion (Coca-Cola Com-pany Annual Reports, 2010). This brand was theCoca-Cola Company’s first billion-dollar brandlaunched from an emerging nation: China (Coca-Cola Company Annual Reports, 2010).

The organization of this article is as follows. First,we identify the key lessons that were learned fromthe successful Minute Maid launch. Subsequently,we provide insights, offer recommendations, andreport research results. We then conclude byhighlighting the study’s limitations and recommend-ing future research directions.

2. Dual branding for a successful newproduct launch: The case of MinuteMaid in China

Coca-Cola Company marketers applied innovativethinking to the launch of the Minute Maid brandin China. In 2003, the non-alcoholic ready-to-drink

Dual branding strategy for a successful new product launch in China 585

beverage market in China was large and growing.Among non-carbonated ready-to-drink beverages,tea, juice, dairy, and water had higher than averagegrowth rates. In 2003, the Coca-Cola Company al-ready had market share leadership in the carbonat-ed beverage category with four brands: Coke,Sprite, Fanta, and Smart. Therefore, a pragmaticconcern for Coca-Cola Company marketers in Chinawas the question of how many brands to launch forthe company to achieve a leadership position in thenon-carbonated beverage category.

Instead of creating several brands for the juicecategory, the marketers of Minute Maid chose to usetwo names–—a sub-brand name and a parent brandname–—to introduce the first new product. The keymarketing challenge was to ensure the success ofthe first new product. What was the first new prod-uct, and what was the best Chinese name for it andfor Minute Maid? What was the roadmap in buildingMinute Maid with a sub-brand name and a parentbrand name without creating confusion in consumercommunications?

The first new product was a juice drink featuringjuice content of 10%. The price of the beverage,logically, was less than that of 100% juice brands.Although there was a market for pure 100% juicein the metro areas of Beijing, Shanghai, andGuangzhou, 10% juice drinks comprised the biggestsegment in the category across the entire country.A 100% juice drink would be too expensive formarketers to reach the masses. The lower cost of10% juice enabled marketers to set the sales price ata level similar to that of other juice drink brands,teas, and non-carbonated beverages. However,a special, yet quite simple ingredient–—orangepulp–—was required for the brand to stand outamong the juice drink crowd and to achieve profitsin this low-margin market (Patton, 2007).

Researchers at Coca Cola’s Shanghai innovationcenter conceived of a juice drink with added piecesof orange pulp, a unique proposition that providedthe brand real differentiation in the crowdedChinese juice market (Patton, 2007). Replicatingthe Minute Maid Orange Pulp texture was not easyand afforded competitive advantage to the maker;it would take competitors quite some time to re-create. The mixing speed in the production tankcould not be too fast, or the pulp would be destroyed,nor could it be too slow (Patton, 2007). Becausethe orange pulp was such an important ingredientand proposition for the new product, Minute Maidalso challenged the traditional approach of launchingthe product under one brand name. Instead, therewere two: the sub-brand name, ‘Guo Li Cheng

,’ and the parent brand name, ‘Mei Zhi Yuan.’ ‘Guo Li Cheng ’ was a sub-brand

name in Mandarin and meant ‘fruit pulp orange.’ Thisname was suggestive of the key features and benefitsof the new product, the presence of pulp in orangejuice. ‘Mei Zhi Yuan ’ was the brand name inMandarin for Minute Maid and meant ‘good juicesource.’ This name was also suggestive and posi-tioned Minute Maid as a juice-based wellness parentbrand.

Although Coca-Cola had an excellent distributionsystem with its bottling network, the marketingexpenditures for any new product required businessjustification. Practitioners within the company hadto convince–—via product concept research findings,new product financials and, preferably, successfullead market results–—bottlers to launch the newproduct in their territories. The launch of a juicedrink with 10% pulp with two names in China wasinnovative, and there was no precedent from othercountries for practitioners to present to bottlersthere. In fact, not all of the bottlers launched thenew product in the first year of the launch; only4 out of 30 chose to bottle Minute Maid Orange Pulpin April 2004. The bottlers only allocated the mediaweight that was recommended by the professionalmedia agency for a new product launch. Minute MaidOrange Pulp was just one of many new products/brands for bottlers in China. In a franchising system,the bottlers (franchisees) did not have to agree withthe Coca-Cola Company (franchisor) about whichproducts to launch or how much to spend on adver-tising. In practice, Coca-Cola could not force bot-tlers to spend enormous amounts for advertisingover and above what a professional media agencywould recommend. Despite all these challenges, thepractitioners within Coca-Cola had to ensure successof the first new product, Fruit Pulp Orange by GoodJuice Source.

Therefore, the marketers of Minute Maid priori-tized their efforts to promote Fruit Pulp Orange byGood Juice Source in the first year of the productlaunch, 2004. The marketers wanted consumersto remember and recall the unique benefits andfeatures of the new product: the fruit pulp. Hence,they put ‘Fruit Pulp Orange’ in a bigger fontsize than ‘Good Juice Source’ on the packaginglabel. They created a proprietary bottle design witha pulp orange shape in the upper part of the bottle.In television advertising, they put forth only FruitPulp Orange and did not mention Good Juice Source.Although advertising law in China did not allowmention of competing brands, the marketers ofMinute Maid ingeniously created a competitive mes-sage with the sub-brand name of Fruit Pulp Orangeas follows: Not all juice drinks were the same; FruitPulp Orange uniquely contained real fruit pulpthat felt great in your mouth. This message clearly

586 P.Y. Lam et al.

communicated the similarity (juice drink) and thedifference (the fruit pulp).

After 12 months in the first four leading marketsin China–—Shanghai, Hangzhou, Nanjing, and Xian–—Minute Maid achieved the number one or two posi-tion in ACNielsen market share in each of these fourmarkets (Patton, 2007). As a result, all of the otherbottlers wanted to launch Minute Maid in 2005.However, in the same year, a competitive Taiwanesebrand, Kang Shi Fu, finally figured out how to pro-duce a juice drink with pulp. In the first few monthsof Kang Shi Fu’s launch of its juice drink with pulp,Minute Maid debuted new advertising and integrat-ed marketing communications at retail stores with anew message: Not all juice drinks with pulp were thesame; Fruit Pulp Orange from Good Juice Source hadsoftly extracted sunny pulp. In other words, themarketers at Minute Maid started to communicatethe source and goodness of the pulp from Good JuiceSource, Minute Maid. The point of reference was ajuice drink with pulp, and the point of differencewas the Good Juice Source’s pulp.

In 2007, Minute Maid Orange Pulp’s unit casevolume grew more than 60% in China; it becamethe number one juice drink brand in key metropoli-tan markets (Coca-Cola Company Annual Reports,2007). In 2008, the Coca-Cola Company introducedMinute Maid Orange Pulp to five new markets out-side of China, and the unit case volume for the brandincreased more than 40% in China (Coca-Cola Com-pany Annual Reports, 2008). Globally, the Coca-ColaCompany was the market leader in juices and juicedrinks (Coca-Cola Company Annual Reports, 2008).

In 2010, after successfully building scale andachieving a leadership share in the juice category,the Coca-Cola Company used Minute Maid, GoodJuice Source, as the parent brand and launchedanother sub-brand, Guo Li Nai You , toenter the smoothie (juice plus dairy) category inChina. ‘Guo Li Nai You ’ was a sub-brandname in Mandarin and meant ‘fruit pulp premiummilk.’ Because the marketers had already estab-lished a strong parent brand in Minute Maid, spend-ing required to launch Guo Li Nai You by Minute Maidwas less than it would have been to launch theproduct with a completely new brand name. Dis-playing all Minute Maid products on shelves in super-markets was also more eye-catching than displayingmultiple juice drink brands. A new sub-brand prod-uct from an established parent brand could increasetrade confidence and consumer interest in tryingthe new product. Thus, dual branding could be onestrategy to the point raised by Tauber (1981):Launching a new product/brand is time consumingand needs a big budget to create awareness topromote a product’s benefits.

3. Insights, recommendations, andresearch results

In this section, we offer insights, recommendations,and research results pertinent to the question ofKeller and Lehmann (2006, p. 749): ‘‘For new-to-the-world products, what should be the relativeemphasis on building the brand versus establishingand growing the category?’’ Our answer is to use asub-brand name for the product’s benefit and aparent brand name for the category’s benefit.

A suggestive sub-brand name may offer two im-portant advantages (Keller et al., 1998). First, evenin the absence of any marketing activities, thesemantic meaning of a suggestive sub-brandname should enable consumers to infer certainattributes or benefits. Second, the suggestivenessof a sub-brand name should facilitate marketingcommunication efforts designed to link correspond-ing product attributes or benefits to the sub-brand.

For a new product launch to be successful, mar-keters must ensure consumers are aware of thebenefits that make the product unique versus com-peting items. Marketers must also highlight thebenefits, attributes, and reasons why potential cus-tomers should try the new product of a sub-brandand switch from what they currently buy. Thesedifferences should be meaningful and appeal to alarge consumer segment; niche products need notapply. If marketers are able to successfully build thebusiness of the first sub-brand, they may thereafterlaunch others under the same parent brand. Hence,the parent brand name should ideally have a broadenough meaning to allow marketers to add new sub-brands in the future in the same or related catego-ries. The sub-brand name should be memorable toconsumers so that the marketers are able to buildsub-brand awareness and also remind consumersabout the benefits and attributes of the new sub-brand, to entice them to try the product.

Hence, marketers will need a sub-brand namethat is suggestive of the key benefits and attributesof the new product, and a parent brand name that issuggestive of the category’s benefits. Dual brandingstrategy may be one answer to the question of Kellerand Lehmann (2006, p. 749): ‘‘What should be builtinto a pioneer brand to retard future competition?’’By investing in the sub-brand name of ‘Fruit PulpOrange’ during the first 2 years of the product’slaunch, the marketers of Minute Maid successfullyowned pulp and retarded future competitive entry.By pairing the sub-brand name with the parentbrand name on the packaging label and in-storecommunications, marketers were able to graduallyincrease brand awareness of the parent brandamong consumers of all products in the category,

Dual branding strategy for a successful new product launch in China 587

and thereby own the category benefit of juice-basedwellness.

In 2009, China’s Ministry of Commerce rejectedCoca-Cola’s attempted acquisition of Hui Yuan, aChinese market leader in the 100% juice marketsegment. If this acquisition had been successfuland if the Coca-Cola Company had continued touse a dual branding strategy for Minute Maid,Coca-Cola marketers could have used Hui Yuan asa sub-brand of the Minute Maid parent brand. In thisscenario, the Chinese name for Minute Maid–—‘MeiZhi Yuan,’ which literally translates as ‘good juicesource’–—would have provided positive connotationsfor Hui Yuan. Furthermore, the second Chinesecharacter for ‘Hui Yuan’ and the third Chinesecharacter for ‘Mei Zhi Yuan’ are the same; thischaracter means ‘source’ in English. Thus, market-ers could join the Minute Maid and Hui Yuan brandnames if Coca-Cola’s acquisition of Hui Yuan even-tually succeeds.

A dual branding strategy is an important strategicchoice for chief marketing officers to consider. It ismuch more difficult to merge two companies andtwo brands than to add a sub-brand under a suc-cessful parent brand. If marketers consistently in-troduce new products as sub-brands and build theparent brand into a large mega-brand, then thesemarketers may be able to successfully introducebrands that are acquired from different companiesas sub-brands of the acquiring company’s mega-brand.

Although the Minute Maid case provides usefulinsights, practitioners may nevertheless want toconsider more actionable advice on whether usingtwo suggestive names is better than other namingalternatives in a dual branding strategy. Therefore,we conducted research by following the suggestionof Dolan (1992). We used a concept test to quanti-tatively measure consumers’ reactions to differentproduct/brand concepts and screened multiple

Table 1. Five product concepts

Concept One Two

Number of names Two names Two names

Parent brand name Suggestive Non-suggestive

Sub-brand name Suggestive Suggestive

Parent brand name—English

Xiang Su Ke Li

Parent brand name—Chinese

Sub-brand name—English

Potato‘‘Zero’’ Chip

Potato ‘‘Zero’’ Chip

Sub-brand name—Chinese

‘‘ ’’ ‘‘ ’’

concepts to identify the best one. In terms of prod-uct categories, we followed Keller and Aaker (1992)and chose foods that could be eaten as snacksbecause respondents are expected to have purchaseand usage experience. For the Chinese parent brandnames of the experiment, we followed the approachof Zhang and Schmitt (2001), using fictitious namesto minimize any familiarity and prior knowledgefactors. The Chinese stimulus names are presentedwith Chinese characters in the experiments. Weinformed all of the respondents that the studyinvolved brand names, and that the names mightbe used for actual products in the future and mightappear on packaging and promotional materials. Wealso emphasized the Chinese name in larger, boldtypeface.

For the new product concept in English, refer toAppendix 1 at the end of this article. There are fiveproduct concepts (Table 1) for the different brand-ing strategies. We have developed two suggestivesub-brand names for the branding strategy of using asuggestive sub-brand name and a suggestive parentbrand name. For the first product concept, wetested the sub-brand name of ‘Potato Zero Chip’(‘ ‘‘ ’’ ’). For the third product concept, wetested the sub-brand name of ‘Zero Potato Chip’(‘‘‘ ’’ ’). By testing two suggestive sub-brandnames instead of only one, we were able to obtainmore empirical support that the research finding isnot due to the uniqueness of one particular sugges-tive sub-brand name.

A leading global research agency conducted field-work in Shanghai and provided statistical significancetests at the 95% confidence level. The researchersconducted 500 online interviews and randomlyassigned respondents to one of the five concepts.The key research results are summarized as follows:

� Using one suggestive brand name will lead tosignificantly higher purchase intent and overall

Three Four Five

Two names One name One name

Suggestive Suggestive Non-suggestive

Suggestive

Xiang Su Potato‘‘Zero’’ chip

Ke Li

‘‘ ’’

‘‘Zero’’ Potato Chip

‘‘ ’’

588 P.Y. Lam et al.

liking scores in product concept tests than usingone non-suggestive brand name.

� Using two suggestive names will lead to signifi-cantly higher purchase intent and overall likingscores in product concept tests than using onenon-suggestive brand name.

� Using two suggestive names will lead to signifi-cantly higher purchase intent and overall likingscores in product concept tests than using asuggestive sub-brand name and a non-suggestiveparent brand name.

4. Conclusions, limitations, and futureresearch directions

When marketers decide to use only one brand nameto launch a new product, choosing a suggestivebrand name will lead to higher purchase intentand overall liking scores in product concept teststhan using a non-suggestive brand name. If market-ers use a dual branding strategy, they should use twosuggestive names. A dual branding strategy allowsmarketers to use the parent brand name to launchother products in the future without having toreposition the brand. If P&G marketers in the1980s had considered dual brand strategy, theymight not have launched four shampoo brands inChina; namely, Rejoice, Head & Shoulders, Pantene,and Vidal Sassoon. Because ‘Rejoice’ in Chinesemeant ‘soft and smooth,’ Rejoice could not offerhair styling products to ‘fix’ hair. P&G had to investa huge marketing budget to build a new brand,Pantene, (with non-suggestive brand name) to offershampoo, conditioner, and hair styling products.

We do not, however, recommend that marketerssimply choose a dual branding strategy for all oftheir new products. Situations exist in which mar-keters must create different brands and brand im-ages to appeal to distinct groups of targetconsumers. For example, a sports drink brand aimedat individual achievers may not be appropriate forconsumers who like to socialize with their friendsthrough leisure sports. Consider the case of PepsiCoin China, which positioned Gatorade as a perfor-mance sports drink for individual athletes and otherconsumers who sought greater levels of personalathletic achievement. By contrast, Danone posi-tioned Mizone as a flavored water drink that con-tained added vitamins and minerals, and wasdesigned for most consumers to quench their thirstafter engaging in leisure exercise with friends. Themarket share of Mizone flavored water was muchhigher than that of Gatorade because the formerhad a larger target demographic segment and

projected a brand image that was more relevantto the majority of consumers. Mizone flavored waterand Gatorade sports drink are two different prod-ucts, with different brand images; they appeal todifferent consumer groups. It is interesting to notethat when Danone used Mizone as the brand tointroduce a new product to compete with Gatorade,the Mizone sports drink had very low market shareand was not successful.

There are limitations of this study. The MinuteMaid success may only be applicable to fast-movingconsumer goods. The research conducted for potatochips is also within a fast-moving consumer goodscategory. Will the findings of this research be appli-cable to slow-moving industrial goods when buyersplace greater importance on a product’s functionalattributes? Practitioners for slow-moving industrialgoods should consider using dual branding strategyand report their findings.

Another limitation of this research is use of theChinese language. Will there be similar results whenthe brand names are in English, Japanese, or otherlanguages? One key difference between naming inChinese and in English is sequencing of the groupand the individual. The Chinese put their names inthe order of family name, then given name. There-fore, the Chinese call their prime minister Wen JiaoBao, rather than Jiao Bao Wen. Wen is the familyname; Jiao Bao is the given name. Conversely,Americans put their given names, or first names,before the family name. Thus, for Minute Maid, theChinese call it Good Juice Source, Fruit Pulp Orangerather than Fruit Pulp Orange by Good Juice Source.Researchers may want to investigate whether thedifferences between the Chinese and Americans innaming conventions or preference will affect theirreactions to the sequencing of sub-brand and parentbrand.

In practice, it is difficult for marketers to create asuggestive name and legally register the name be-cause names that may be registered are unique andcannot be too generic. Thus, marketers have toexplain to the company lawyer that as long as theparent brand name can be registered legally, thereis enough protection for a brand. Why must sub-brand names be registered? In the case of MinuteMaid, although the competitor, Kang Shi Fu, mayalso launch and name the product ‘Fruit PulpOrange,’ consumers may nevertheless choose theFruit Pulp Orange by Good Juice Source; that is,Minute Maid. Marketers may also create a uniquefont type for ‘Fruit Pulp Orange’ and register thefont type to help differentiate. A good suggestivename for a product feature is difficult to create, andmarketers should not simply give up the name be-cause it cannot be legally registered.

Dual branding strategy for a successful new product launch in China 589

Appendix 1. New product concept(in English)

After working for a long time, you need somerest.

The new potato chip is crispy and delicious, but itdoes not contain any fat and salt (0% fat, 0% salt).

It is produced by a patented baking process.Without adding any oil, it nevertheless has acrispy texture. It also has specially added min-erals that are essential for the human body andgive it a delicious, slightly salty taste.

Try the new [branding option] now.

Company: An international company.

Brand: [Branding option]

Sub-brand: [Branding option]

Product: Potato Chips

Weight: 50g

Price: RMB3

Marketers may consider the example of Apple,which has famously launched the iPod, iPhone, andiPad, among others. While these three products aredifferent, all of them have ‘i’ at the beginning oftheir names. All three also have similar looks andfeels in terms of design, user friendly interface, andthe unique iTunes software from Apple. One seeseach name as having two parts: ‘i’ and ‘Pod’ foriPod; ‘i’ and ‘Phone’ for iPhone; and ‘i’ and ‘Pad’ foriPad. Both parts are quite suggestive. The key ad-vantage of this naming approach by Apple is that itenables practitioners to create one suggestive namewith two suggestive parts to allow for registration ifthe name has not been previously conceived of andregistered by another company. Thus, Apple mayregister iPod, iPhone, and iPad. Although Apple paida huge sum of money, U.S. $60 million, to anothercompany in mainland China in 2012 to buy theiPad trademark for use there, iPad is a trademarkthat may be legally registered.

The effect of the company name probably alsoaffects the success of a new product with a suggestivesub-brand name and a suggestive parent brand name.Using the example of Minute Maid again, what wouldhappen to the product concept test scores with andwithout mention of the Coca-Cola Company’s name inthe product concept? Although the advertising ofMinute Maid in China did not mention that it was aproduct of the Coca-Cola Company, on the back labelof the Minute Maid Orange Pulp juice drink, there wasa small line that indicated it was manufactured andproduced by the Coca-Cola Company.

If mentioning the company name is not usefultoward enhancing the image of a new product,marketers should skip it. For example, after P&Gacquired a high-end cosmetics company, SK-II, in theearly 1990s, P&G did not market SK-II as a brandunder P&G’s company name; it simply was not alogical or beneficial declaration. Finally, if thefounder of a company launches a new product fora new company, should the company name be sug-gestive or non-suggestive? Should the name of thecompany be broad enough, based on in which busi-ness the company wants to be? Alternatively, shouldthe founder focus on ensuring the success of the firstnew product by the company, and change the com-pany name later when there is a business require-ment to do so? For example, Apple changed itscompany name from Apple Computer, Inc. to AppleInc. to expand its business definition.

We hope that this article inspires practitioners torethink the branding process when they launch newproducts. We close with the Chinese saying forparents who are naming their newborn babies:‘‘Do not worry about the inborn heritage of yourbaby; worry about the consequence of giving your

baby a bad name.’’ Parents may give their baby aChinese name that means ‘work hard,’ and the childmay try to meet the expectations of the parents byworking hard rather than working smart. Every new-born baby has a given name and a family name.Should a new product have a sub-brand name and aparent brand name?

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