Too many brands beneath one roof?

Centrica seems keen to continue adding brands to its portfolio of household and motoring services. But observers argue that its lack of a single umbrella brand is confusing to the public.

I t came as a surprise last week when the head of marketing for British Gas Trading (BGT), Colin Woodcock, resigned after being with the company for barely two months (MW October 12)

Earlier this year, Centrica, the holding company of BGT, lost the AA group marketing director, Bob Sinclair, after the company reshaped itself as a provider of household services ranging from home and car to personal finance (MW January 13).

Is the departure of Woodcock indicative of further upheaval at Centrica, which seems to be in a constant process of adding new brands and new services?

The company was once concerned only with gas supply, but has branched out into everything from electricity to insurance and financial services, plumbing and roadside services.

Centrica already has three strong brands – BG, the principal brand for its energy range, AA, the brand for a range of services for motorists, and Goldfish, its financial services brand – and is now about to launch a fourth: British Gas Communications, which will offer telecoms services. Later this year, it plans to launch a bank, to offer everything from current accounts to mortgages and pensions.

British Gas has yet to appoint a replacement for Woodcock and the company says that its energies are currently focused on the launch of its telecoms business. More new appointments are expected later this year.

Losing top marketers at the same time that it is developing a broad range of services relating to many of the basic necessities of life does not seem a wise policy, at least to industry observers. Many seem to feel it is time to create an umbrella brand for all Centrica’s varied products.

“Centrica has some very good, strong products and brands, but it does not seem to be pulling them all together. For customers, this can be quite confusing, since there is no inter-linking of these brands,” says an industry source.

In fact, the Centrica business model targets as much cross-selling as possible of its British Gas brand and its other brands. Outside gas, Centrica does not involve itself in delivering actual services, but acts purely as a retailer.

Underlining the fact that the company is still perceived as a utility gas business, another former British Gas Trading insider says: “The company is certainly huge, which is why there is going to be lots of movements within the structure. Like any rapidly growing, diverse organisation, Centrica will have a struggle to manage it effectively.

“And because it has been chopped up into various elements, it is not structured from the customer point of view.”

A spokesman for British Gas disagrees: “In essence, British Gas is a sort of umbrella brand. The brand itself has not been ‘chopped up’ and remains consistent, with the exception of the addition of the word ‘Communications’ for our new telephone product.”

Meanwhile, British Gas is said to be adding energy customers at a net rate of 30,000 to 40,000 a week. Analysts have said that BGT’s 23 million UK customer base, and its national brand recognition, might make it an impregnable new competitor in the household telecoms sector, where former monopoly BT still carries 80 per cent of home calls.

The company seems to believe that the more goods and services it sells, the more “sticky” the customers get. An insider remarks: “British Gas is certainly the leader in the market, and the fact that Centrica is drawing on the strengths of the brand name and launching other services, like telecoms, is a good strategy. But the trouble is that something as huge as Centrica does not give freedom to its marketers within its various brands.”

The industry seems to concur with the principle of being a one-stop-shop providing energy, banking, financial, home and road services, and heating installation and maintenance.

An insider adds: “Centrica will always cross-sell within its brands, but at the same time will keep its brands separate.”

The head of brand for British Gas Trading, Susan Brooks, says: “British Gas is the one-facing brand for our ‘Mr and Mrs consumer’. So from the customer’s point of view, the relationship is with the brand. How we deliver the individual products marketed under the brand is of no real relevance to our consumers.”

Brooks maintains that the addition of telecoms to the principal brand, British Gas, will lead to an even stronger brand identity. She adds: “As a company, we know our customers want more and more from us, and that is what we endeavour to provide. Even our new advertising for introducing our telecommunications services explores the fact that we are adding to our portfolio of existing products.”

The new ad, created by BMP DDB, plays humorously on the fact that a company known for gas is now providing a telecoms service.

Given the structural changes at Centrica, there has been speculation about an imminent consolidation of its media buying. According to the source: “Companies as large as Centrica look towards centralising their buying.”

Centrica’s roster media agencies include BMP OMD for British Gas, Zenith Media for AA, and Manning Gottlieb Media for its Goldfish brand. Centrica, however, denies this.

The company adds that while adding a whole lot of services and products to its “strong brands”, it would continue to concentrate on building affinity relationships between the brands.

A source concludes: “In principle, with the number of brands and products it is offering at the moment, Centrica should appeal to customers as a one-stop shop.

“But, at the moment, that does not seem to be happening – there are too many varied services being offered. At some point, Centrica might need to look again at its entire structure to get the desired response from consumers.”

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