Memberships & Associations:
B Local LogoWeVow Logo
joshua-newton-7qjqQjt7zXQ-unsplash

Thought Leadership / BY Maggie Speciale

Breaking Down Brand Architecture

Journal October 21, 2021

Brand architecture, in the simplest terms, is the relationship between brands and/or product lines within an organization and how they interact with one another.

Brand architecture, in the simplest terms, is the relationship between brands and/or product lines within an organization and how they interact with one another. This type of framework becomes increasingly vital as your business grows over time.

*“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) *

What can it help you achieve?

  • Tailor messaging to distinct audiences. A clear brand architecture model allows you to segment your messaging so that it matches the needs of different audience groups, without risk of dilution or confusion.
  • Build and leverage brand equity. Understanding the inherent equity of each of your brands helps you identify when it makes sense to capitalize on an existing reputation in the marketplace vs. carve out a unique space for a new brand.
  • Reduce marketing and promotional costs. Building and marketing a brand is a significant investment. Brand architecture helps you identify opportunities to create marketing efficiencies, cross-promotion, and upsells.
  • Create internal alignment. As your organization grows, brand architecture ensures that all stakeholders have a clear understanding of the structure of your brands and how to leverage the portfolio’s strength without cannibalizing growth.
  • Allow for future growth. Growth is fundamental for any company – a clear brand architecture sets you up for success as you look to diversify your product offering and audience, and consider potential mergers and acquisitions.

What types of challenges can it help address?

  • Your audience doesn’t fully understand your range of brands and products
  • You want to enhance your ability to cross-sell various products or services
  • You want to leverage the equity of one of your existing brands to extend into a new business or product line
  • You are in the process or have recently acquired a new brand and need to determine how it fits within your portfolio
  • You want to be prepared for a potential sell-off of one or more of your existing brands

What are the different brand architecture models?

There are four distinct brand architecture models, with the main difference being the emphasis of the parent brand. It’s important to consider the pros and cons of each model before making a decision about which one to pursue.

During this process, you’ll want to think about the current state of your business, your plans for growth, and what will drive the most value in the future. While you can transition to a different architecture model down the line, it can be a costly endeavor.

Branded House

  • Overview
    • Also known as the Master Brand or Monolithic model, a Branded House includes a strong parent brand with various sub-brands whose name and identity design are derived from the parent brand. The sub-brands both support and benefit from the parent brand, with similar qualities, values and messaging.
  • When to Use
    • The Branded House model is preferable when you already have a strong parent brand with a significant amount of equity built in that can be passed along to its sub-brands.
  • Benefits
    • 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
    • Creates a consistent user experience and minimizes confusion
    • Lower cost of marketing programs
  • Drawbacks
    • 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
    • Apple (apple icon + phone, watch, MacBook)
    • Virgin (Virgin Records, Virgin Atlantic, Virgin Voyages)
    • FedEx (FedEx Ground, FedEx Freight, FedEx Express)

House of Brands

  • Overview
    • Also known as a Pluralistic model, a house of brands architecture features a collection of distinct brands that operate independently from a parent brand, the latter of which customers may or may not be aware of. The parent brand is primarily important only to the investment community.
    • When to Use
    • Parent brands operating under a House of Brands structure usually have highly diversified target audiences across multiple industries. It’s commonly used when a holding company buys up subsidiaries, some of which may be competing brands.
  • Benefits
    • 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 brand or any of the individual brands has a crisis, none of the other sub-brands are impacted
    • Can easily sell-off and acquire new brands
  • Drawbacks
    • 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
    • P&G (Pampers, Old Spice, Always)
    • Unilever (Dove, Ben & Jerry’s, Lipton)
    • General Motors (Chevrolet, Cadillac, Buick)

Endorsed Brands

  • Overview
    • In this model, you have one or more sub-brand endorsed by the parent brand with a reference to that brand throughout their communication. Each sub-brand has its own identity, but is still associated with (and benefiting from) its association with the parent brand.
  • When to Use
    • The endorsed brands architecture is a good choice when you want to target different audiences while continuing to leverage the power of the parent brand. It also works when you want to build different propositions and new associations for different brands.
  • Benefits
    • 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
    • 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 values and beliefs
    • Marketing dollars will be spread over distinct sub-brands and the endorsing brand, as opposed to focusing all of spend on a masterbrand
  • Examples
    • Kellogg (Eggo, Rice Krispies, Nutri Grain)
    • Nestle (Kit Kat, Nesquick, Toll House)
    • Marriott (Courtyard Marriott, Towneplace Suites by Marriott, Fairfield Inn by Marriott)

Hybrid

  • Overview
    • The hybrid model is a mixture of two or more of the previously described architecture models.
  • When to Use
    • It is most often used when an organization is acquiring existing brands through mergers and acquisitions. In these instances, a company may choose to retain the acquired brand’s name and/or design in order to avoid customer confusion, retain brand equity, etc.
  • Benefits
    • Permits the coexistence of old and new brands
    • Allows for mergers and acquisitions of different types of brands
    • Accommodates situations in which a major innovation justifies its own name while other entities are more closely related
  • Drawbacks
    • Often more of an ad-hoc approach born from mergers and acquisitions, rather than a proactive brand strategy
    • Can lead to customer and/or investor confusion
  • Examples
    • Alphabet (Google Chrome, Google Home, Nest)
    • Amazon (Amazon Web Services, Zappos, Twitch)
    • Coca-Cola (Diet Coke, Coke Zero, Sprite)

Key Takeaways

There are many factors to consider when deciding which brand architecture model best suits your business’s unique needs, but there are some basic principles to keep in mind as you go through the process:

  • Spend time thinking through your brand architecture early, and revisit it periodically to make sure it still makes sense for your business needs.
  • When considering how to integrate new brands into your portfolio, conduct customer research to understand existing brand equity, potential synergies, points of difference, etc.
  • Try to stick with one architecture model but do not exceed two – it can lead to internal and external confusion.
  • When an existing brand can be used, do not create a new one. It’s a waste of time and money, and creates unnecessary complexity.
  • Building a solid brand architecture isn’t easy, which is why branding agencies like BLVR exist. Please reach out if you’d like to discuss your branding needs.

ABOUT THE AUTHOR 01
Maggie Speciale

Maggie Speciale

Executive Strategy Director

Maggie leads BLVR’s Strategy department, drawing on her 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.

false