One of the most significant techniques for firms that manage several brands is strong brand architecture. Because brand relationships, name awareness, and customer trust are frequently dependent on how brands are presented, the brand architecture enables businesses to showcase the strength of their entire collection of brands in a way that benefits them both collectively and individually. There are numerous methods to structure brands, and the best brand architecture for your firm will depend on its size, annual revenue, and even the types of brands in question.
This article will go into deeper detail about brand architecture, covering the numerous types of brand architecture. It will also go through how to create your own brand architecture and the practical benefits of doing so.
What is Brand Architecture?
The organizational framework that a corporation employs to structure its brands, sub-brands, and products or services is known as brand architecture.
The framework aids in defining a brand’s breadth and depth, making it easier to build marketing campaigns, find growth prospects, and ensure consumers comprehend the offerings.
Companies utilize brand architecture to guide internal initiatives. It not only serves as the foundation for the brand identity, style guide, and brand story, but it also aids in efficiency by highlighting chances for cross-promotion, brand awareness, and mergers and acquisitions.
Consumers use brand architecture to categorize the company and understand how it fits their demands, which is not always clear. For example, many individuals are unaware that Alphabet is Google’s parent firm. However, they have a particular perception of Google’s brand equity and apply it to products such as Google Sheets, Google Docs, and Google Search.
Finally, brand architecture is intended to organize a brand’s offers and establish brand equity. Not every architecture will work for every business, so let’s take a look at the possibilities to determine which would be a good fit for your brand.
Brand Architecture Components
A master brand, brand extensions, and sub-brands (and even sub-sub-brands) are all part of brand architecture. Here’s a quick rundown of these brand architecture components:
- Master Brand: The master brand is the top-level corporate brand, often known as the parent brand, that encompasses all of the company’s offerings. Typically, the master brand is formed by the parent company’s brand name.
- Sub-brands: Sub-brands are product or service brands that are associated with the parent brand but have their own brand name and identity.
- Brand extension: Brand extension is the process of leveraging an established brand name on new products in order to enhance sales.
The Importance of Brand Architecture
Brand architecture describes how brands inside an organization are related and interact with one another. It is produced with the target market’s viewpoint in mind.
Brands must develop a brand architecture because it enables them to –
- Stay organized internally – viewing the brand through the eyes of the customer helps to identify flaws in organizational structure and communication strategies, allowing the brand to stay organized internally.
- Manage perception – Creating brand architecture makes it easier to manage outside perceptions of the brand, its offerings, and its interactions.
- Create Synergy – An organized brand architecture fosters synergy between child brands and the parent brand, allowing the organization to execute a bigger brand promise.
Brand Architecture Models
Branded house, house of brands, endorsed brands, and hybrid brands are the most popular brand architecture models.
#1. Branded House
A branded house architecture integrates numerous house brands under a single umbrella brand, leveraging the equity, recognition, and consumer loyalty of the well-established master brand. House brands are frequently built to target distinct audience categories in order to optimize reach and income.
Apple, for example, uses branded house architecture to provide a consistent look and feel across its sub-brands: iPad, iPhone, iMac, Watch, and TV. Sub-brands improve their equity and attract buyers by leveraging Apple’s devoted consumer base.
The following businesses have branded house architecture:
- FedEx: FedEx Express, FedEx Ground, FedEx Freight, FedEx Office, and so on.
- Virgin: Virgin Mobile, Virgin Pulse, Virgin Money, and so on.
- HubSpot: Marketing Hub, a Sales Hub, a Service Hub, a CMS Hub, and an Operations Hub.
#2. House of Brands
The master brand is minimized in a house of brand architecture in order to highlight the sub-brands. Because they are not tied to the master brands’ messaging, appearance, or positioning, the sub-brands can shine on their own. However, it also adds to the complexity because each brand has its own audience, brand identity, marketing strategy, and equity.
Because of the complexities involved, organizations that adopt a house of brand structure are frequently major worldwide brands with established equity. While the master brand may be well-known, as in the case of the consumer goods company Unilever, it can also be hidden, as in the case of the fast-food company Yum! Brands.
A house of brands architecture is used by the following companies:
- Procter & Gamble: Pampers, Tide, Bounty, Bounce, Dawn, Tampax, and more
- Yum! Brands: KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill
- GE Appliances: Monogram, Café, GE, GE Profile, Haier and Hotpoint
- Focus Brands: Aunties Anne’s, Cinnabon, Jamba Juice, Carvel, and more
- PepsiCo: Pepsi, Lays, Quaker Oats, Gatorade, Aquafina, Tropicana, and more
#3. Hybrid Brand
The house of brands and branded house models are combined in hybrid brand architecture. The purpose of this structure is for the sub-brands to have styles that are comparable to the master brand while still preserving independent brand identities.
Companies that employ a hybrid architecture may promote the master brand, but most use this model to keep the master and sub-brands distinct after mergers and acquisitions. It’s also a solid strategy for businesses like Marriott Bonvoy that wish to cater to a wide range of target consumers.
Using a hybrid approach, the corporation maintains a varied portfolio of brands that includes premium hotels like the Ritz-Carlton as well as more affordable options like Residence Inn.
The companies listed below adopt a hybrid approach:
- Alphabet: Google, Nest, YouTube, Fitbit, Waze, and other companies.
- Microsoft: LinkedIn, Skype, GitHub, Mojang, and others.
- Amazon: AmazonBasics, Presto!, Mama Bear, AmazonFresh, Zappos, and other retailers
- Levi’s: Dockers, Denizen, and Signature are all brands owned by Levi Strauss & Co.
#4. Endorsed Brand
The endorsed brand model, which has a master brand and sub-brands that rely on an association with it, is another alternative for brand architecture. Because they all share the same endorsement, each sub-brand benefits from the strength of the others.
An approved brand frequently incorporates the master brand’s logo and colors. Of course, this allows the sub-brand to benefit from the primary brand’s reputation for increased brand equity, awareness, and security.
The recommended strategy is ideal for businesses who utilize a hybrid approach and want each sub-brand to have its own identity while being connected to the master brand. In contrast to the house of brands method, the approved model identifies the primary brand behind the products or services. Moreover, unlike the branded house approach, an endorsed brand can have a distinct appearance or feel from the master brand.
An endorsed strategy is used by the following brands:
- Nestle’s Nescafe
- Sony’s Playstation
- Kellog’s Rice Krispies
- Ralph Lauren Polo
Considerations for Choosing a Brand Architecture
The brand architecture model that is best for your company will be determined by a variety of criteria, including the brand equity in each of your brands, how you want that brand equity dispersed in the future, the various levels of visibility you desire for each brand, and more.
Above all, the best brand architecture strategy for your company will be determined by how you want customers to understand the relationship between your brands, offerings, and/or divisions.
Let’s take a closer look at six of the most critical considerations to make when selecting your brand architecture framework and organizing your brand hierarchy.
You may reduce the risk associated with any brand restructuring by carefully analyzing each of the following elements.
#1. Brand Equity
It is critical to assess the strength and flexibility of existing equity in each of your brands.
Do you want to risk losing important brand equity by combining brands following a merger or acquisition? Can the equity of an existing brand be used to promote another?
Procter & Gamble cannot use the equity of its Head & Shoulders brand to market other products in its brand portfolio, such as batteries or cold medicine. Confusion would be a problem for all of the brands concerned.
#2. Culture
When it comes to brand architecture, internal aspects such as fundamental values and business culture are just as significant as external ones.
If you’ve purchased a new firm with a fundamentally different culture, you should consider if it’s better to integrate it or keep it separate.
Certain divisions, for example, perform better with a level of autonomy that is incompatible with the codependent marketing strategy required by a branded house.
When it comes to matters like positioning and brand personality, a branded house requires that all organizations be on the same page. If that does not appear realistic, or even viable, another style of architecture should be examined.
#3. Growth Strategy
When deciding on brand architecture, keep growth strategy in mind.
Do you have any pending mergers, acquisitions, or alliances in your company model? Do you intend to broaden your product or service offering in the near (or even distant) future?
Your brand architecture should support and facilitate effective expansion by giving each brand strategic leeway.
With the appropriate methodology, you can identify underperforming brands while avoiding the exposure that comes with a single-brand strategy.
#4. Market
The market or marketplaces in which your organization works is one of the most essential aspects.
If your company only serves a particular market, a branded house can increase brand awareness, optimize marketing budget, and strengthen reputation.
If you have items or services aimed at vastly diverse markets, having numerous brands can help to protect each market from the others, reducing risk and assuring unique message.
The Ritz Carlton, for example, maintains its luxury status by maintaining a branded distance from its parent business, Marriott, and other, more budget-conscious Marriott sub-brands.
Toyota launched Lexus because it was unable to compete in the luxury automobile market due to its pragmatic image.
In addition, by acquiring the natural foods brand Odwalla, Coca-Cola got access to a rapidly developing market segment that was previously unreachable due to the soda giant’s association with junk food.
Multiple brands imply multiple approaches to meeting the diverse needs of various audiences.
#5. Disruption
Another important consideration is how much disruption you are willing to tolerate as a result of rearranged brand architecture. The restructuring caused by a new brand architecture will always be disruptive.
Splitting a single brand into many brands necessitates the creation of new businesses, the transfer of staff, and the establishment of new internal systems and external websites.
Consolidating several brands is also disruptive, laying the stage for staff and customer uncertainty.
Every rebranding and restructuring endeavor involves some level of disruption and risk. The main thing is to weigh the risk against the potential long-term return.
#6. Cost
Last but not least, money is an important issue to consider when developing your brand architecture, particularly the cost of rebranding that a new brand architecture involves.
Keeping a plethora of independent brands is always going to be more expensive than consolidating all of your offerings under a single brand.
It is also costly to rename several brands’ packaging, signage, and digital assets and integrate them under a new corporate organization. Intangible costs, such as brand equity, should, of course, always be addressed.
How to Create a Brand Architecture
One of the first tasks a firm should take when developing a brand is to define brand architecture since it establishes the groundwork for an organized, straightforward branding strategy. Although brand architecture can become complicated when there are dozens of sub-brands, the right structure can ensure that each brand stays true to its identity.
A brand architecture for your company can be created in three steps: research, strategy, and application.
#1. Research
Strong brands don’t just pick a model and run with it. Research is an important stage in establishing brand architecture because it provides you with the information you need to structure offerings in a way that makes sense for your organization, customers, and industry.
The more data there is, the better. However, gathering the following information will provide you with the insights you require to get started.
- Brand auditing entails assessing brand loyalty, brand awareness, brand perception, brand equity, brand assets, and brand portfolio.
- Buyer personas, market segmentation, product/service use, pricing, customer satisfaction, and competition analysis are all examples of market research.
Before making any decisions, assess your company’s mission, vision, and values to ensure that the brand architecture corresponds with business objectives.
#2. Strategy
Now that you have the data, it’s time to construct the brand architecture. If you’re redesigning an existing architecture, this step may necessitate difficult decisions on whether to get rid of or sell companies that don’t fit into your ideal architecture. If you’re starting from scratch, you must determine how closely your present (or future) sub-brands will be linked to the master brand.
You may put each architecture to the test by imagining what the brand would look like in each method and making a list of advantages and negatives. Perhaps the branded house model will not work because you have multiple distinct brands that cannot be grouped under the parent brand.
Outline the links between the master brands, sub-brands, and products or services once you’ve found a structure that may work. You must understand how everything interacts while developing separate brands, designing cross-promotions, or marketing to customers.
Along the way, keep in mind your available resources (employees, budget, and time). Certain approaches require more work than others, so you should select a brand architecture that fits both your current capacity and your future vision.
#3. Application
Choosing a brand architecture is only the beginning of developing a long-lasting brand that people adore. However, for the purposes of this article, the final step is to share the completed structure with your team.
Bottom Line
Finally, brand architecture strategy entails analyzing the complexities of your brand portfolio and selecting how to utilize each brand or sub-brand to best benefit the whole, with the support of rigorous research.
You’ll have a far better chance of limiting the risk associated with any updated brand hierarchy if you thoroughly analyze each of the essential considerations listed above and follow the approach indicated.
Remember that the objective of brand architecture is more than just coming up with catchy names for your products and services. Its purpose is to bring order out of chaos—and to sharpen the edge of your continuing branding initiatives.
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