Sub-Brands: A Way For Legacy Brands to Reach New Audiences
Connecting the Dots is a monthly series that examines research-driven trends and how insights from one industry translate across others.
Introduction: Why Sub-Brands Are on the Rise
Right now, legacy brands are facing a familiar obstacle: how to stay relevant to new audiences without alienating their original customers who made them legacy brands.
Younger audiences want personalization and digital-first experiences. They tend to prioritize cultural relevance. Meanwhile, older audiences who may have been customers for decades expect consistency. They tend to prefer when brands keep the status quo and prioritize reliability.
For many established legacy brands and organizations—especially in complex industries like utilities, healthcare, financial services, and franchising—using one brand to meet all expectations often results in dilution rather than growth. Which is why sub-brands are becoming a popular strategic solution.
Done right, sub-brands allow organizations to experiment, modernize, and target new segments without risking core brand equity. However, when done wrong, they create confusion, internal competition, and fractured experiences.
Real Example of Sub-Brands Done Right
Marriott International & Aloft Hotels
Marriott International is a legacy brand that knows one brand cannot serve every traveler. As younger generations entered the market and guest expectations evolved, Marriott faced that familiar legacy brand obstacle. How to appeal to the younger generation without alienating the older one. The launch of Aloft Hotels became a strategic answer—one that allowed Marriott to expand its reach while protecting the equity of its core brands. Here’s how they did it:
The initial step in creating a sub-brand is defining the audience that isn’t reached by the legacy brand. In this case, Marriott identified a younger, design-conscious traveler who valued experience over luxury and technology over formality. Rather than morph their existing brands to appeal to the new audience, Marriott decided that a different mindset—and aesthetic—was required.
Aloft was launched as a standalone lifestyle sub-brand with its own tone, design language, and guest experience. While a distinct brand, it benefited from Marriott’s operational standards, loyalty program, and reputation. Because Marriott was already a brand name that consumers recognized, they were more likely to trust Aloft from the get-go.
Aloft allowed Marriott to compete in a new market without eroding the equity of its existing core brands. The sub-brand attracted new customers into the Marriott ecosystem, many of whom later engaged with other Marriott properties as their needs evolved. This allowed the whole legacy brand to grow without alienating its customer base.
Source: POV for Sub-brands Across Our Industries
Connecting this to your industry
Utilities
Utilities have immense customer bases with vastly different priorities. While some customers prioritize environmentally friendly projects, others prioritize affordability or reliability. To avoid annoying customers with messaging they don’t care for, different sub-brands can present differing messaging preferences without losing trust.
Healthcare
Healthcare systems often use sub-brands to break up their large variety of services. When urgent cares, wellness centers, hospitals and virtual care services are broken up into sub-brands, it’s easier for patients to understand the system. This allows for the many different audiences within a healthcare system to get the messaging and branding most relevant to their needs.
Financial Services
There is a hidden potential for sub-brands within the financial services industry. Due to a rising audience of younger customers with specific needs that vary from older audiences, sub-brands can generate brand loyalty. Financial services can create sub-brands that rise to the needs of this new audience, from financial education services to digital and community-based programs and beyond. When new customers trust the sub-brands, they’re far more likely to be loyal to the brand as a whole.
Franchise Systems
With sub-brands, franchises can test new formats, menu items, service models and customer experiences while maintaining their overall brand. This is especially important in the franchise world as sudden systemwide change can overwhelm both customers and franchisees. When done well, sub-brands can expand franchises and extend their reach.
From our team
“To me, the strength of a sub-brand is its ability to leverage the equity and trust from the parent brand while still being able to find its own personality and direction.”
Conclusion: Sub-Brands Aren’t Shortcuts—They’re Systems
Creating a sub-brand can be a powerful tool for legacy brands to capture multiple audiences. However, sub-brands require the same amount of care and delicacy as their legacy brand.
Each sub-brand needs a clear role, audience and purpose. They must flow with the legacy brand’s story while having a unique identity that allows them to appeal to the audiences they’re created for. To benefit from the association, they also must live up to the legacy brand’s reputation. For true success, sub-brands must work within the ecosystem of the shared parent brand. This requires a lot of balance and coordination, which can be a struggle for any brand.
Don’t miss the next connection
Get monthly insights on what one industry can teach another.
About REGROUP
REGROUP is a woman-owned, full-service marketing agency helping complex brands find truth, build trust and power growth through our brand + performance solutions. With over 40 years of experience, we are people first and committed to using business as a force for good.
