Crucial Considerations for Assessing a New Brand Architecture 

Brand architecture is an essential aspect of business strategy, particularly for companies that have grown through mergers and acquisitions or that have diversified their product or service offerings. It involves the creation of a hierarchy that organizes a company’s brands in a way that aligns with its goals, values, and strengths while meeting the needs of its customers. One of the questions we get asked most commonly by Clients is what should you consider when assessing brand architecture. We know there are several key factors to consider, including brand equity, company culture, growth plans, market targeting, audience connection, competitive advantage, and cost. 

Let’s break each of these down.

BRAND EQUITY

Brand equity is a critical consideration when reviewing your brand architecture. If you have multiple brands, you may risk losing valuable brand equity by consolidating them after a merger or acquisition. Conversely, you can leverage an existing brand’s equity to promote another brand, leading to a stronger overall brand portfolio. It’s essential to conduct thorough research to determine which approach is best for your company.

Questions to ask: 

• How strong is the existing brand equity of each brand in the portfolio?
• What is the potential impact on brand equity if two or more brands are consolidated into a single brand?
• Are there any existing brands within our portfolio that we can leverage to promote other brands and improve our overall brand equity?

COMPANY CULTURE

Company culture is another important factor to consider. A brand architecture change can significantly impact your company culture, particularly if you are consolidating brands or changing their positioning. Communicating these changes clearly to employees and stakeholders is crucial to minimize any negative impact on morale and engagement.

Questions to ask:

• How will our brand architecture change impact the company’s culture and employee morale?
• How can we communicate the changes to employees and stakeholders to minimize the negative impact?
• Are there any core values or cultural aspects that may be affected by the brand architecture change?
• Will the change require any new training or development programs to help employees adapt to the new brand architecture?
• How can we ensure the brand architecture change aligns with our company culture and values?

GROWTH PLANS

Growth plans are another critical factor to consider when reviewing your brand architecture. Suppose your business model entails pending mergers, acquisitions, or alliances, or you plan on expanding your product or service lines soon. In that case, your brand architecture should reflect those plans. For instance, a flexible hybrid model best suits companies with growth-oriented strategies.

Questions to ask:

• What are our company’s current growth plans, and how will they impact our brand architecture?
• Will our current brand architecture be able to accommodate any potential mergers, acquisitions, or alliances?
• How will expanding our product or service lines affect our brand architecture?
• Is our current brand architecture flexible enough to adapt to future growth plans?
• What brand architecture model would be best suited for our growth-oriented strategies?

MARKETING TOGETHER

Market targeting is critical, particularly if your business targets a single market. In such cases, a branded house model can effectively optimize marketing spend, boost brand awareness, and bolster reputation. Conversely, a house of brands or hybrid model may be more appropriate if you have multiple brands targeting different markets.

Questions to ask:

• How well do we understand our target market and their preferences?
• Have we conducted research on our market to determine the most effective brand architecture model?
• Do our brands compete against each other within a single market?
• How effective are our marketing strategies in reaching our target market?
• Are there any potential risks to our brand reputation if we consolidate our brands under a single brand umbrella or if we maintain multiple brands targeting different markets?

AUDIENCE CONNECTION

Audience connection is another key factor to consider. Depending on your audience segments, you may need to segment your messaging to connect better with high-value segments. For instance, a house of brands models better suit companies targeting multiple distinct audience segments.

Questions to ask:

• Who are our high-value audience segments?
• How do these audience segments differ from each other in terms of their needs, wants, and preferences?
• Which brand architecture model will best enable us to connect with each audience segment?
• How can we tailor our messaging to each audience segment in a way that resonates with their specific needs and preferences?
• How can we measure the effectiveness of our audience segmentation and messaging strategy?

COMPETITIVE ADVANTAGE

Competitive advantage is an important consideration when reviewing your brand architecture. You should consider whether your organization gains an advantage by adopting a particular model, whether it’s a house of brands, a branded house, or a hybrid model. Depending on your market and competition, one model may be more effective than another.

Questions to ask:

• What are the key features and strengths of your brand(s) that differentiate them from your competitors?
• How do your competitors’ brand architectures compare to your current or potential brand architecture?
• How can your brand architecture help you leverage your unique selling points to gain a competitive advantage?
• Are there any potential risks or challenges associated with adopting a certain brand architecture model, such as conflicts with existing competitors or industry norms?
• How can your brand architecture align with your overall business strategy to create a sustainable competitive advantage in the long term?

COST TO THE BUSINESS

Finally, cost is an essential factor to consider when reviewing your brand architecture. Implementing a new brand architecture can be a complex process that requires significant resources and capital. You should carefully evaluate the costs of implementing each model and consider how far-reaching those costs will be. For instance, a branded house model may require significant brand identity, messaging, and marketing investments to establish a strong, unified brand.

Questions to ask:

• What is the estimated cost of implementing each brand architecture model?
• Are there any cost-saving opportunities in the brand architecture review process?
• How will the costs of implementing a new brand architecture impact the overall budget?
• Can potential gains in brand equity and market share offset the costs of implementing a new brand architecture?
• Are there any cost-effective ways to communicate changes in brand architecture to employees and stakeholders to minimize the negative impact on morale and engagement?

WANT TO KNOW MORE ABOUT BRAND ARCHITECTURE?

Check out these articles:

• Breaking Down Brand Architecture
• When Is The Right Time to Re-Evaluate Your Brand Architecture? 
• How To Develop A Brand Architecture