Study blog: Brand architecture

What are different brand architecture strategies?

A number of brand architecture models have been developed in recent years, though most of them have their roots in the seminal brand work of Dr. David Aaker. Dr. Aaker coined the terms “branded house,” “house of brands,” and endorsed brands, which are three different types of brand architecture approaches. While other brand architecture examples exist (i.e., some talk about a “monolithic,” “endorsed,” and “freestanding”), the basic concepts are the same, relating to how near or close brands should be managed perceptually, and all should be considered in developing and managing your organization’s brand architecture strategy. (Equibrand.com)

Brand architecture is the logical, strategic and relational structure for your brands or put another way, it is the entity’s “family tree” of brands, sub-brands and named products.

"“Branded house” implies that most or all products and services provided by that organization primarily bear the organization’s brand name. FedEx, Google, Coca-Cola and Virgin for example.

Branded House (also called a monolithic brand) emphasizes a single master brand, which sits over of the other brands within an organization. This is a particularly good option when the products are in the same category or offer a similar set of benefits. The basic concept is to “put more wood behind” the arrow, essentially gaining economic leverage by investing at the master brand level, and then using product names or descriptors to call out product-level attributes. BMW and Mercedes are examples of the branded house approach.

2 “House of brands” implies that the organization’s products and services bear a wide variety of brand names as opposed to the organization’s brand name. The Kraft Heinz Company, General Motors, PepsiCo and Procter & Gamble for example.

House of Brands (also called freestanding brands) are designed to stand entirely on their own in the marketplace. This allows an organization to develop a portfolio of brands, each with a unique brand positioning tailored to a particular product or market segment. General Motors — and its family of brands — is considered a house of brands example.

3" Endorsed Brands" fall somewhere in the middle. Here, brands are combined in such a way that one is designed to work in concert with the other. There are numerous examples of this strategy: Think Courtyard By Marriott, Polo by Ralph Lauren, Microsoft Windows, and the like. Brand endorsement indicates the linkage but also creates some distance between the two brands. Endorsed brands make the parent brand relevant or at least increases its awareness to the market served by the endorsed brand.

When and why to use different brand architecture models?

The purpose of brand architecture is to addresses each of the following:

•       What the overarching branding approach is – master brand, brand/sub-brand, endorsed brand, stand alone brands, including or some combination of these

•       How many levels of branding should exist

•       What types of brands exist at each level

•       How brands at different levels relate to each other, if at all

•       Decision rules for creating new brands

•       Which brands’ identities are dominant and which ones are recessive

•       What types of names the organization uses – coined, associative descriptive or generic descriptors – and in which circumstances (usually controlled by decision rules)

•       Which brands are features in each and every media, vehicle, situation and circumstance (e.g. business cards, stationery, product catalogs, website, shipping boxes, vehicle signage, employee uniforms, building signage, etc.)

Organizations often find themselves at a stage in their development in which the number of brands and named products that they are managing has gotten out of control. This could be due to a series of mergers and acquisitions or the continuous growth of new products and services over time. These organizations find that their portfolios of brands and other named entities have gotten too difficult or expensive to manage. Frequently, there are no naming standards. Each new product or service is named as it is created, with no view to the overall picture. And sometimes, employees are creating variations or new versions of existing brands for entities and programs such as internal training programs, company picnics or employee reward programs. If some or all of this applies to your organization, you likely need help clarifying and simplifying your branding structure.

Here are the reasons a company might want to maintain different brands or sub-brands:

•       If there are channel conflict issues, especially if key customers who resell to the end consumer want to offer something different from competitors.

•       If the same (or very similar) products are sold at different price points – separate brands or sub-brands create more distance between the offerings.

•       If one set of products are upscale or premium, while the other are standard or value products.

If one brand appeals to a very different market segment with different needs from the other brand (making the messaging different).

The advantage of using fewer brands or a singular brand is marketing efficiency in brand building and customer communication.

There are no absolute rules that apply in all brand architecture situations, however here are some simple rules of thumb:

•    The simpler the system the better

•    Ideally, there are no more than two levels of hierarchy

•    The system should be flexible enough to address all current and anticipated branding situations

•    The dominant brand should be the one you most intend to build over time

•    Sub-brands should be created sparingly, however they can be built to make the main or parent brand more relevant to new customer segments

•    When an existing brand can be used, new brands should not be created

•    Careful thought should be put into at what level taglines are used

•    Many organizations have evolved to brand/sub-brand systems with some provision for flexibility and variation

•    More and more organizations are trying to build and leverage their corporate, parent or organization brands as a way to save money when marketing products and services

•    Only brands that (a) are highly differentiated, (b) will be maintained for at least several years and (c) will be supported by significant marketing resources over time should have coined names

•    Brand architecture should be designed with external audiences in mind. It should not be designed to reflect legal entities or internal organization structure.

•    Sub-brands should be developed to meet the needs of different market segments. This requires a deep understanding of those segments.

Managing brand architecture

(http://www.slideshare.net/CarolPhillips/brand-architecture-toolkit-final22509/23-BRAND_AMPLITUDE_LLC_AUGUST_2015)

In developing and managing brand architecture strategy, there are at least four key components to consider: 1) brand architecture audit; 2) brand architecture principles; 3) brand architecture models alternatives; and 4) the brand naming decision tree.

Brand architecture audit

A brand architecture audit is a necessary starting point to define the “as is” or current state of your organization’s brand architecture. Depending upon the size and complexity of your organization, this can be a fairly simple or very elaborate exercise. The brand architecture audit should focus on two key areas: business performance and brand structure.

• Business performance involves assessing the performance of the various products and brands within the brand portfolio, in terms of sales, profits and growth potential. Which brands and products contribute the most to your business today and in the future?

• Brand structure involves understanding — from the eyes of your customer — how they experience the current brands and product today, across all the various brand touch points. This involves auditing and then visually representing how customers experience your brand — including logos, website, advertising, collateral material, at-retail, etc. Practically speaking, this can be done in a conference room or using a brand touch points wheel. Is the brand architecture visual depiction clear, consistent and logical or do opportunities exist to improve the structure?

Once you complete the “as is” assessment step, it’s time to consider and develop a set of brand architecture principles to guide strategic decision-making.

Brand architecture principles

Brand architecture principle development should serve as the foundation for developing alternative brand architecture frameworks. This is a critically important, though often overlooked step, in developing a clear, consistent brand architecture. As questions arise in managing brand architecture — should we add a brand, delete a brand, establish a brand-driver relationship — it’s necessary to have a set of principles to guide decision-making. Importantly, brand architecture principles development should precede brand architecture examples and alternatives development. Before you consider whether a “house of brands” or a “branded house” is the right approach, you need to establish a set of criteria, specific to your organization, to guide development.

Here is a sample:

Sample Brand Architecture Principles

• Identify and invest in the fewest number of brands needed to meet business goals. Today, that is Brands A, B and C

• Create new brand(s) only when a business case (including target customer insight) has been proven and necessary multi-year support has been confirmed

• Minimize the proliferation of sub-brands by using endorsed brands, product extensions or product descriptors

• Maximize understanding and minimize confusion by using descriptive or generic terms for product extensions or product descriptors

The above principles would tend to favor a more streamlined brand architecture (with fewer, stronger brands). Another set of principles may call for a greater number of brands. The key point however, is that brand architecture principles should be established before brand architecture alternatives development, considering the brand architecture strategy factors discussed prior.

Brand Architecture Framework Alternatives

Once the brand architecture audit and principles have been defined, it’s time to develop alternative architecture models and frameworks. This is where you consider the “boxes and sticks” approach to brand architecture across a variety of brand architecture examples. What alternatives exist for determining the strategic, relational structure for all products and brands in the portfolio? Again, depending upon the size and complexity of your organization, an almost limitless number of options may exist. Therefore, at least initially, our brand consultants and clients will develop and draw on a brand architecture template to jointly develop a limited set — typically three to five alternatives — that are strategically sound and distinctively different from each other.