June 7, 2023
In the simplest terms, brand architecture is the relationship between brands and/or product lines within an organization and how they interact. Choosing the right brand architecture frameworks will provide a roadmap for creating a clear and cohesive system that communicates your brand’s identity, values, and offerings to your target audience. In this article, we’ll explore the importance of brand architecture frameworks and the key elements that can help you build a strong brand strategy.
“As organizations grow and appeal to different audiences through different product lines or company acquisitions, brand architecture is the key organizational system that makes sure each type of product or company is intuitively linked with the right audience.” (Magneti, 2021)
Brand architecture aims to ensure that each brand is intuitively linked with the right audience and that they are differentiated from each other without cannibalizing growth.
WHY IS BRAND ARCHITECTURE IMPORTANT
Brand architecture should be reviewed at organizations of all sizes, but it becomes increasingly vital as the business grows over time. As an organization adds more brands or product lines, it can become challenging to maintain a clear and consistent message without a structured brand architecture. So it is essential to clearly understand your brand architecture, which includes understanding the relationships between your various brands, how they interact with each other, and how they speak to different audiences.
WHAT ARE THE BENEFITS OF A STRONG BRAND ARCHITECTURE?
The benefits of brand architecture are far-reaching – from connecting to right-fit audiences to creating organizational alignment.
- Build and leverage brand equity – Every brand has its own inherent equity – the value it brings to the marketplace. Understanding this equity allows you to identify when it makes sense to capitalize on an existing reputation in the market versus carving out a unique space for a new brand. This can be particularly useful if you’re considering expanding your product line or entering a new market.
- Tailor messaging to distinct audiences – One of the most significant benefits of a clear brand architecture is that it allows you to segment your messaging to match the needs of different audience groups. For example, let’s say you own a clothing company offering high-end luxury items and more affordable basics. With a clear brand architecture, you can create messaging that speaks to each audience without diluting or confusing your overall brand.
- Reduce marketing and promotional costs – Building and marketing a brand is a significant investment, both in terms of time and money. Brand architecture helps you identify opportunities to create marketing efficiencies, cross-promotion, and upsells. For example, if you have a sub-brand that isn’t performing as well as you’d like, you can cross-promote it with a more successful brand to drive sales and reduce marketing costs.
- Create internal alignment – As your organization grows, it becomes increasingly important to ensure that all stakeholders clearly understand your brand’s structure and how to leverage the portfolio’s strength without cannibalizing growth. A clear brand architecture can help ensure everyone is on the same page, reducing confusion and making it easier to work together towards shared goals.
- Allow for future corporate growth – Clear brand architecture can help set you up for success as you define the corporate hierarchy, diversify your product offering and audience, and consider potential mergers and acquisitions. By understanding the relationships between your various brands and product lines, you can identify areas of opportunity and ensure that your growth strategy is aligned with your overall brand vision.
WHAT ARE THE BRAND ARCHITECTURE MODELS?
There are four main brand architecture models to choose from, each with unique advantages and disadvantages. These models include the Branded House, House of Brands, Endorsed, and Hybrid models. Let’s break down each of them to understand what makes them special and when they should be used.
THE BRANDED HOUSE
The Branded House, also known as the Master Brand or Monolithic model, is a popular choice among companies seeking to establish a cohesive brand identity across multiple sub-brands. It includes a strong parent brand (or master brand) with various sub-brands whose name and identity design are an extension of the parent brand.
One branded house example is Apple and its various sub-brand extensions, such as Apple iPhone, Apple Ipad, Apple Mac, Apple Watch, Apple TV, etc.
By leveraging the reputation and equity of a strong parent brand, businesses can create a sense of consistency and familiarity across all of their sub-brands. Plus, it can capitalize on established customer loyalty where customers might care less about an individual product or service but rather identify with the central belief that makes a brand like Apple stand for more.
Benefits of a Branded Architecture:
- Each sub-brand benefits from the reputation of the parent brand while also building equity for it
- Naturally promotes the acceptance of new sub-brands launched using the parent brand name
- Requires the least amount of short-term investment and delivers minimal disruption to the business
- Creates a consistent user experience and minimizes confusion
- Lowers the cost of marketing programs due thanks to the streamlined, consistent approach
Drawbacks of a Branded House Architecture:
- Risk of negative spillover – a bad product or experience can taint the entire portfolio of brands
- Risk of dilution – when a brand is positioned too broadly across too many categories, it can lose its meaning
- Difficult to market multiple brands in the same vertical
- Difficult to sell off brands
Examples of a Branded House Architecture:
- General Electric
HOUSE OF BRANDS
The House of Brands model, also known as the Pluralistic model, is a popular approach for companies with a diverse range of products or services across multiple industries. Under this structure, a parent brand operates independently from its distinct brands, which are not directly linked to the parent brand. The parent brand is often only known to investors and is not relevant to customers. The distinct brands have their own identities, values, and messaging, allowing them to target specific audiences without diluting the parent brand.
A good example of a House of Brands is Unilever and its vast array of products across multiple industries. Products within the Unilever architecture sometimes feature their parent brand’s identity, and some do not.
The House of Brands model is ideal for companies like Unilever, who are looking to operate in different markets or appeal to different customer segments while maintaining the autonomy and individuality of each brand.
Benefits of a House of Brands Architecture:
- Allows each sub-brand the independence and flexibility to establish its own unique story, enabling flexibility to go after a clearly defined market and ideal target customer
- Can have multiple brands in the same category to appeal to different demographics
- If the parent or individual brands have a crisis, none of the other sub-brands are impacted.
- Can easily sell off and acquire new brands
Drawbacks of a House of Brands Architecture:
- Requires more investment in promotion and advertising to build brand awareness of all brands
- Don’t benefit from the equity boost that would accompany a sub-brand in a parent brand approach.
- Can get complex to manage numerous completely distinct brand identities
- Limits opportunities for cross-promotion
Examples of a House of Brands Architecture:
- Procter & Gamble
- Yum! Brands
- General Motors
The endorsed brands model involves one or more sub-brands that are endorsed by the parent brand, with a reference to the brand included in their communication. Each sub-brand maintains its own unique identity but benefits from its association with the parent brand. You’ll commonly hear language like “Brought to you by” or see logo lockups that combine the parent and sub-brand.
The Endorsed brand architecture is used particularly well in the Hospitality space. Take, for example, the Marriott brand. Each sub-brand, Courtyard, Fairfield Inn, and Springhill Suites, are brought to you by their parent brand – Marriott.
The endorsed brand’s architecture is a great choice when targeting different audiences; in Marriott’s case, travelers are looking for different types of hotel stays while still benefiting from the power of the parent Marriott brand. It also works well when creating different propositions or establishing new associations for different brands.
Benefits of an Endorsed Brand Architecture:
- Allows sub-brands the flexibility to create their own identity and positioning
- Sub-brands benefit from the reputation and equity of the parent brand, enhancing consumer perception and confidence
- Marketing activities advertise both the sub-brand and the endorser (parent brand)
- The connection between sub-brands can more easily facilitate cross-selling
Drawbacks of an Endorsed Brand Architecture:
- Risk of negative spillover – a bad product or experience can taint the entire portfolio of brands
- Although the endorsed sub-brand enjoys some independence, it still must fall in line with the parent brand’s belief and values.
- Marketing dollars will be spread over distinct sub-brands and the endorsing brand instead of focusing all of the spendings on a master brand.
Examples of an Endorsed Brand Architecture:
The hybrid model is a combination of different brand architecture models, often used when an organization is acquiring existing brands through mergers and acquisitions. In these cases, companies may choose to retain the acquired brand’s name and design to preserve brand equity and avoid customer confusion. The hybrid model allows the organization to maintain the individual identities of each brand while also leveraging the strength and reputation of the parent brand.
An example of a hybrid model is the Alphabet family of brands. In addition to Google, Alphabet acquired various companies such as YouTube, Android, and Waze, each retaining their own brand identity while still being associated with the Alphabet parent brand.
The hybrid model is also a good choice when a company wants to diversify its portfolio with new brands that have different target audiences and messaging. By combining different brand architectures, companies can build a robust and diverse brand portfolio that caters to a wider range of consumers.
Benefits of a Hybrid Brand Architecture:
- Offers the most flexibility to an organization
- Allows an added brand or sub-brand to retain any complexity inherent to its market value
- Accommodates scenarios where a significant innovation warrants a distinct name while other entities are more closely linked.
- Allows for mergers and acquisitions of different types of brands
- Offers the freedom to create specific brand strategies, identities, and experiences for each brand
Drawbacks of a Hybrid Brand Architecture:
- This can lead to customer and/or investor confusion
- Often more of an ad-hoc approach born from mergers and acquisitions rather than a proactive brand strategy
- Considerable costs can result from separate branding, marketing, and promotional initiatives in silos.
Examples of a Hybrid Brand Architecture:
To create a successful brand architecture, it’s crucial to consider various factors that fit your business’s unique requirements. However, there are some fundamental principles that you should keep in mind during the process:
- Spend time developing your brand architecture early and revisit it periodically to ensure it aligns with your business needs.
- Conduct customer research to understand brand equity, potential synergies, points of difference, etc., when integrating new brands into your portfolio.
- Stick with one architecture model and, at most, two to avoid internal and external confusion.
- Use existing brands when possible rather than creating new ones, which only adds unnecessary complexity and costs.
Remember that creating a solid brand architecture isn’t easy, which is why branding agencies like BLVR® exist. By analyzing the nuances of your brand portfolio and making informed decisions on how to utilize each brand or sub-brand, you can minimize the risks associated with any changes to your brand hierarchy. Brand architecture aims to bring clarity from chaos and continually enhance your branding efforts.
- Brand architecture is the relationship between brands and/or product lines within an organization, and it is crucial for maintaining a clear and consistent message as the business grows.
- Strong brand architecture provides numerous benefits, including building and leveraging brand equity, tailoring messaging to distinct audiences, reducing marketing and promotional costs, creating internal alignment, and allowing for future corporate growth.
- There are four main brand architecture models: Branded House (or Master Brand), House of Brands (or Pluralistic model), Endorsed, and Hybrid. Each model has its own advantages and disadvantages and should be chosen based on the organization’s goals and objectives.
- The Branded House model emphasizes a strong parent brand, while the House of Brands model allows for independent sub-brands. The Endorsed model combines sub-brands endorsed by a parent brand, and the Hybrid model is a combination of different models often used in mergers and acquisitions.
- Developing a solid brand architecture requires careful consideration, including conducting customer research, sticking to one or two architecture models, and utilizing existing brands whenever possible. It is an ongoing process that should align with the business needs and enhance branding efforts continually.
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About the author(s)
Executive Director Strategic Impact & Growth
Lenya leads business development at BLVR and is well-versed in partnering with clients to drive long-term value for their organizations. She honed her craft working on global brands like Procter & Gamble, Anheuser-Busch, Sony, and Canon at leading agencies, including Saatchi & Saatchi, Leo Burnett, and BASIC. A master of purpose-led creativity, her work has been honored by the Effie Awards and the prestigious Cannes Lion Festival.
Executive Strategy Director
Maggie leads BLVR’s Strategy department, drawing on over a decade of cross-functional experience building and positioning brands across a wide range of verticals. Over the years, she’s had the pleasure of partnering with some of the world’s leading brands, including Nordstrom, TABASCO, Disney, Bare Escentuals, Cox Communications, Gruppo Campari, Cisco Systems, and Union Bank. Whether it’s established category leaders that need a refresh or emerging category disruptors that need to punch above their weight, Maggie is passionate about helping brands to better understand their consumers, identify the competitive white space, and articulate their purpose in a meaningful way.