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Brand Architecture

Definition of Brand Architecture

Brand Architecture is a system that organizes brands, products and services to help an audience access and relate to a brand. A successful Brand Architecture enables consumers to form opinions and preferences for an entire family of brands by interacting or learning about only one brand in that family. An established Brand Architecture is an important guide for brand extensions, sub-brands and development of new products. It will also provide a road map for Brand Identity development and design, and remind consumers of the value proposition for the entire brand family. It also provides the maximum brand value by fully leveraging both corporate and sub brands.[1]

In the field of brand management, brand architecture is the structure of brands within an organizational entity. It is the way brands within a company's portfolio are related to, and differentiated from, one another. The brand architecture should define the different leagues of branding within the organization; how the corporate brand and sub-brands relate to and support each other; and how the sub-brands reflect or reinforce the core purpose of the corporate brand they belong to. Often, decisions about brand architecture are concerned with how to manage a parent brand and a family of sub-brands – managing brand architecture to maximize shareholder value can often include using brand-valuation model techniques. One may regard the designing of a brand architecture as an integrated process of brand building through establishing brand relationships among branding options in the competitive environment. The brand architecture of an organization at any time is, in large measure, a legacy of past management decisions as well as of the competitive realities brands face in the marketplace. Before the term 'Brand Architecture' was coined, the strategic model that gave rise to this - showed all 5 levels of what was termed 'Brand Bonding' by authors Mihailovic and De Chernatony and the full paper can be seen here: https://link.springer.com/article/10.1057/bm.1994.14. The strategic advantage of brands 'shifting gears' between the 5 are clearly outlined in the paper but essentially the Brand Bonding Spectrum has the HOUSE BRAND at one end and PRODUCT BRAND at the other. Inbetween one finds a power balance between the two as L'Oreal tends to do e.g. L'Oreal + Studio Line[2]



Creating a Strong Brand Architecture[3]

The purpose of brand architecture is to make your offerings clearer, not more convoluted. There are 3 simple steps toward defining a sound, intuitive brand architecture: Research, Strategy, and Migration.


Creating Brand Architectur

  • Research: The best brand architecture starts with research on brand awareness, brand loyalty, and associations. Only with research can you know how your audience understands (or doesn’t understand) your key offerings. Research data will tell you which brand architecture type will best support your business strategy. It gives you the information you need to parse your offerings or divisions in a way that makes sense to those you serve. Research includes qualitative initiatives comprising one-on-one interviews with internal and external stakeholders. Quantitative research enables you to test the hypotheses developed in the qualitative phase with more widely distributed online surveys to understand how and why your customers make decisions. Other research types include brand equity studies to better understand the equity each of your business’s brands has in relation to each other and the market at large. And a competitive brand audit will provide further insight into the strengths and weaknesses of your brands, as well as those of your top competitors.
  • Strategy: In the strategy phase, you determine the optimal brand architecture type for your business’s unique needs. Each type offers a different way to leverage (or not leverage) the master brand. How closely do you want to associate your sub-brands to your parent brand? This question is particularly relevant if you’ve recently undergone a merger or acquisition (and even more relevant if a former competitor was involved in the process). To what extent should your various brands cross-reference and promote each other, or to what extent do they need to remain independent? The best way to answer this question and others is to create illustrative examples of multiple architecture alternatives, identifying the pros and cons of each. Evaluate each alternative against pre-determined criteria to ensure objective evaluation. Prioritize clarity in the connections between sub-brands, divisions, products, or services. Cross-promotion between brands doesn’t work if customers are confused by the correlations between your extensions. The more common elements there are among your brands, the stronger the synergy is between them. Lastly, be realistic when it comes to budget and resources. Make sure to create a system that you can reasonably expect to support given the manpower and capital you have available.
  • Migration: The final step is to create a blueprint for the system you’ve organized and outline a plan for migration. This includes a naming structure and identity system that clearly delineate your various sub-brands or extensions in a way that aligns with your overarching brand strategy. The visual and verbal breadcrumbs that result from a tightly constructed blueprint are key to helping customers and other external stakeholders navigate your brand architecture. In addition to the brand architecture blueprint, deliverables of this final stage should include a profile of your brand portfolio, outlining the following:
    • The strategic role of each brand
    • The scopes of each brand (offers, geographies, customers)
    • The identity relationships of each brand to the master brand
    • Various approaches to the expression of each brand

Finally, management tools such as decision trees for future architecture decisions will ensure that you continue to get the most out of your chosen architecture as your brand continues to grow.


Importance of Brand Architecture[4]

Brand architecture is how the brands within an organisation are related and how they interact with each other. It is created by keeping the target market’s perspective in mind. Brands need to create a brand architecture as it helps them to –

  • Stay organised internally – looking at the brand with the eyes of the customers helps to find out the loopholes in organisation structure and the communication strategies and helps the brand to stay organized internally.
  • Manage perception – Developing brand architecture makes it easier to manage the outside perception about the brand, its offerings, and their relations with each other.
  • Create Synergy – Having an organised brand architecture creates a synergy among the child brands and the parent brand and help the organisation deliver against a larger brand promise.


Brand Architecture Strategy Objectives[5]

Three key objectives of brand architecture include clarity, synergy and leverage, as described here:

  • Clarity. The brand architecture must promote clarity of offering both to the marketplace as well as to the internal organization. Key questions: Will customers understand their purchase and how it relates to other offerings? Are we consistent and fairly single minded in presenting the core focus and benefits of each brand area relative to another?
  • Synergy. Brand architecture should allow the organization to deliver against a larger brand promise than any single brand could achieve. Key question: Have we created strategic linkage to provide incremental value (i.e., the idea of 1 + 1 = 3; Honda adds to Accord, Accord adds to Honda)?
  • Leverage. A well-managed, strategic brand architecture should provide leverage for a company to extend its brands both horizontally and vertically to capture new customer segments and markets. Key question: Have we enabled brand extension or new brand creation opportunities given the vision for the brand?


Components of Brand Architecture

Brand architecture includes a master brand, brand extensions and sub-brands (and even sub-sub-brands). Here’s a brief explanation of what these brand architecture components are:

  • Master Brand – it’s the top-level corporate brand, also called the parent brand, which encapsulates all the offerings of the company. Usually, the parent company’s brand name forms the master brand.
  • Sub-brand – a sub-brand is a product or service brand which is affiliated with the parent brand but has its own brand name and identity.
  • Brand extension – brand extension refers to the process of using an established brand name on new products to increase sales.


Types of Brand Architecture[6]

There are three main types of brand architecture: the Branded House, the House of Brands, and the Endorsed Brand. Each option comes with its own advantages and disadvantages.

The Branded House: FedEx is an example of The Branded House brand architecture, with their operating companies and portfolio of solutions all falling under the name of the master brand. This structure makes for a consistent experience, minimizes confusion, and builds equity for the corporate brand.


Fedex Brand Architecture


The House of Brands: One brand architecture example for The House of Brands is Procter & Gamble, with dozens of product brands underneath the parent P&G brand. This structure makes sense for P&G due to its large number of products, many of which have been marketed for decades under the product name. Changing the name of something like Crest to match the Procter & Gamble parent brand would only serve to confuse loyal consumers—this way, P&G retains the brand equity of all their products.


P&G Brand Architecture


The Endorsed Brand: Marriott is an example of a hybrid brand structure where some brand extensions feature the parent name, while others do not. This format provides flexibility in naming and brand building. However, some consumers may be unaware of the connection between the master brand and companies that carry a different name (between Marriott and Sheraton, for example).


Marriott Brand Architecture


Factors to Consider When Creating a Brand Architecture

There are many factors to consider when deciding which brand architecture type best suits your business’s unique needs. By taking into consideration each of the following concerns, you can mitigate the risk that is inherent to any brand restructuring.

  • Brand Equity: It’s important to evaluate both the strength and flexibility of the existing equity in each of your brands. Do you risk losing valuable brand equity by consolidating brands after a merger or acquisition? Can an existing brand’s equity reasonably be leveraged to promote another? Proctor & Gamble can’t exactly leverage the equity of its Head & Shoulders brand to promote other products in its portfolio like batteries or cold medicine. The resulting confusion would be problematic for all the brands involved.
  • Culture: Internal factors like values and company culture are just as important as external ones when structuring your brand architecture. If you’ve acquired a new company with a radically different culture, it’s important to ask whether it makes more sense to merge it or keep it separate. Certain divisions operate better with a level of autonomy that isn’t compatible with a codependent marketing strategy. A branded house approach demands that all entities be on the same page when it comes to positioning and brand personality. If that doesn’t seem likely, or even possible, another architecture type needs to be considered.
  • Growth Strategy: Growth strategy should be front of mind when determining brand architecture. Does your business model entail pending mergers, acquisitions, or alliances? Do you plan to expand your product or service lines in the near (or even distant) future? Your brand architecture should support and enable successful growth by providing strategic latitude for each brand. The right approach will allow you to identify underperforming brands and avoid the exposure that comes with a single-brand strategy.
  • Market: Perhaps the most important factor is the market or markets in which your company operates. If your business targets a single market, a branded house can boost brand awareness, optimize marketing spend and bolster reputation. If you have products or services aimed at significantly different markets, multiple brands can help to protect each market from the other, mitigating risk and ensuring differentiated messaging. The Ritz Carlton retains its luxury status by keeping a branded distance from its parent company, Marriott, and other, more budget-conscious sub-brands in the Marriott family. Unable to compete in the luxury car market because of its pragmatic image, Toyota launched Lexus. And by acquiring natural foods brand Odwalla, Coca-Cola gained access to a fast-growing market segment that was previously unavailable because of the soda giant’s association with junk food. Multiple brands mean multiple ways to fulfill the unique needs of multiple audiences.
  • Disruption: Another key factor is how much disruption you’re willing to endure with reorganized brand architecture. Every rebranding initiative entails a certain amount of risk. The important thing is to measure that risk against the long-term gain you stand to realize. Realigning lesser-known products under a well-known brand is relatively risk-free. Rebranding well-known products with a new and unfamiliar parent brand run the risk of confusing and/or alienating a brand-loyal customer base.
  • Cost: Last but certainly not least among factors to consider when creating your brand architecture is cost. Maintaining a slew of separate brands is always going to be costlier than organizing all of your offerings under a single brand. It’s also expensive to rebrand the packaging, signage, and digital assets of multiple brands and consolidate them under a new single entity. Intangible costs like brand equity need to be considered as well.


Misconceptions of Brand Architecture[7]

  • Brand architecture = re-organisation – Usually less than half of brand architecture work result in a business restructuring process. An internal business structure does not always need to mirror the customer facing architecture.
  • Brand architecture is just a design exercise – Design and language is imperative to creating brand architecture, however it is driven by strategic objectives of a business to demonstrate its position and purpose in the market.
  • Brand architecture is only useful for B2C companies – In fact, B2B offerings largely benefit more from a brand architecture system.


Advantages and Downside of Brand Architecture[8]

Good and efficient brand architecture is necessary to any company and the many positives to be gained by employing brand architecture are as follows-

  • The brand architecture ensures the smooth running of an organization.
  • It keeps a constant vigil on the market and its current trends.
  • Documenting the numerous strategies and helping in decision making
  • The main difference between a successful and unsuccessful company is often brand architecture.
  • One of the main duties of the brand architecture is to maintain a balance between the main brand and its sub brands.
  • It is the brand architecture which determines when and where to launch new products so that the consumers readily accept it.

On the downside, bad brand architecture will lead to negative consequences such as:

  • If a company has disorganized brand architecture then it will lead to chaos within the organization.
  • This will result in a decline in the value of the brand.
  • Ultimately, the sales figures will be affected and it will have serious repercussions on the profit and loss scenario.
  • In such cases, the bottom line usually is the slow and steady disintegration of the brand.


See Also

Brand
Brand Ambassador
Brand Architecture
Brand Asset Valuator
Brand Awareness
Brand Equity
Brand Extension
Brand Identity
Brand Identity Prism
Brand Loyalty
Brand Management
Brand Personality
Brand Recall
Brand Recognition
Brand Strategy
Brand Value
Brand Vision
Branded Content Management
Branding
Market
Market Analysis
Marketing
Advertising
Market Share


References

  1. Defining Brand Architecture Gravity Group
  2. What is Brand Architecture? Wikipedia
  3. How to a Create Strong Brand Architecture Ignyte
  4. Importance of Brand Architecture Feedough
  5. Brand Architecture Strategy Objectives Equi Brand
  6. Types of Brand Architecture Element Three
  7. Three common misconceptions of brand architecture Nalla
  8. Advantages and Downside of Brand Architecture Marketing91