Although the multi-brand strategy has many advantages, but also there are many limitations.
(1) With the introduction of new brands, its net contribution to the market rate Jiangcheng a marginal decline trend. Economics of marginal utility theory tells us that as a consumer of the increase in consumer goods, the goods were diminishing marginal utility of the trend. Similarly, for an enterprise, with the increase in brand, the new brand-to-business market marginal contribution rate is off the trend of diminishing. This is due to the limited resources within the enterprise, to support a new brand is sometimes necessary to reduce the estimated cost of the original brand on the other hand, enterprises in the creation of new brands on the market because competitors will be the resistance without achieving the desired results They will address the new corporate brand launch a similar competitive brands, or intensify the existing brand marketing efforts. In addition, another important reason is that as companies in the same online brand products increased between the brand will inevitably erode each other's market. In the sudden expansion of the market difficult, it is difficult to imagine the new brand to attract consumers are all competitors customers, or has never used the product, especially when the product differentiation smaller, or the same product Online different brand positioning difference not significant, this brand eroded among the phenomenon is particularly significant.
(2) brand promotion cost more. Enterprises to implement multi-brand strategy, it means that limited resources can not be allocated to the profitability of the few strong brands, brands need a long-term, a huge publicity budget. For some enterprises, it is elusive.