What is Brand Architecture?

Put simply, Brand Architecture refers to organizing subsections of a larger brand into varying subsections. It is a valuable process that helps segment and organizes the structure of your brands, products, and services. It becomes the outline in which your brands all relate to one another.

While part of the value of brand architecture refers to enabling marketers to place brand extensions in the right places, whether to separate brands when required or to bring them together to complement each in the marketplace, but consolidates your brand properties in a way that maps your brand's purposes.

Why Does Brand Architecture Matter?

Have you ever considered that your company may actually be confusing your audience unwittingly, in terms of the types of products and services you have placed on the market?

Companies that have been in action for many years, especially those that have expanded in more ways than one, tend to have built up a multi-layered blend of brands, each with its own brand identities. This can confuse potential customers, producing negative perceptions, and as such can adversely affect purchase decision-making. E.g., a loss in sales.

One of the prime factors that explains why companies may find themselves unaware of this type of confusion is because internal parties have been involved with clarifying said brands, and products for so long they have become accustomed to how your company classifies and organizes their deliverables, and as such lack external and objective perspective.

During this overview we will take a look into the main types of brand architecture, and how to restructure your brand so as to avoid these types of issues. We will also observe some points that cover the benefits of solidifying a brand architecture and a number of considerations to indicate when and how we build Brand Architecture.

Let’s look at some brand architecture examples to see how this works.

What are the Main Types of Brand Architecture?

While there are many types of Brand Architecture, most people generally refer to three main model types, these three models will be the predominant discussion point in this article.

1. The Branded House
2. The House of Brands
3. The Endorsed Brand

THE BRANDED HOUSE

The Branded House is most likely the most widely used form of brand architecture. The main characteristic of The Branded House model is that it predominantly displays its parent brand in a way that clearly signifies it as the umbrella brand (something that holds the most sway) it then carries each separate subsidiary or sub-brand in a way that clearly signifies it as a subsidiary of the prime brand.

Major brands such as Google and Apple are classic examples that utilize this style, where both brands have sub-brands or standalone brands, but they can all be marketed and operated under a singular umbrella brand.
Each subsidiary displays the subcategory/brand descriptor/qualifier in a way that not only describes the purpose of the subsidiary but easily signifies itself as a subcategory brand under the Master brand by size, position, color, etc.

FedEx as shown below is also a perfect example to illustrate how The Branded House architecture model works.

Notice how the structure provides a consistent experience, which abolishes any chance for confusion. Additionally, it builds brand equity for the Prime Corporate brand.

As you can see GE uses what is called the Master-Branded Model. While it is essentially the same as the previous model, you can observe an obvious difference, where it tries not to differentiate itself other than in the title.

Pros:

A Branded House model provides many benefits for companies that offer multiple products and services under a singular brand, such as:

• Effectiveness – a single marketing strategy and brand ethos to apply to all deliverables
• Simplicity – Less a chance for confusion due to all subsidiaries being held under one brand
• Evolution – Customers prefer brands they already trust, so adding future additions, services, and so on will likely transition a lot more easily.,

Cons:

While Branded House strategies may be viable for many businesses, there are still issues to be aware of.

• Reputation – All your products and services are tied to one brand, and as such might limit the opportunity for customers to explore your other services/sub-brands
• Limitations – Basically the same as reputation, if the prime identity is weak, it affects the perceptions your consumer has for all associated sub-brands
• Ambiguity – You might create confusion as to what each sub-brand delivers if you don’t provide some means to signify what your sub-brand does, especially if you do something like GE, they haven’t provided anything to indicate what each subsidiary does.

THE HOUSE OF BRANDS

The House of Brands is essentially the exact opposite of the Branded House model. While the Branded House model typically displays its focus on a single parent brand, the House of Brands model could host many brands, all independent of each other, each containing their own brand identity, brand communications, brand experience, audience, market, look and feel, and so on.
As for linking the parent brand in visual terms, the parent brand is often placed in a way that is barely noticeable, and in most instances, it won’t be displayed at all. The parent brand is irrelevant compared to the sub-brand.

Procter & Gamble and Unilever are perfect examples of House Brands. They own many products, all of which are subsidiaries of a singular parent brand. This format is logical for P&G due to the fact they own a massive collection of established brands. By following this format, P&G retains the brand equity generated per individual brand under its belt.

Pros:

A House of Brands method can provide businesses with huge flexibility, enabling each brand to hold its own, some of the pros are as follows:

• Reach – An increased ability to reach a broader target audience
• Less Risk – Holding companies owing a large collection of successful brands can breathe easier knowing that if one sub-brand faces turmoil, they will most likely not be adversely affected and could potentially have other successful brands to fall back on.
• Armor – As mentioned previously, if a brand receives bad press. The parent company is less likely to be tarnished.

Cons:

Managing one brand is difficult enough, let alone managing hundreds. There are many considerations one must be prepared to consider before using this format.

• Too much to handle – managing multiple marketing strategies for multiple brands will certainly drain time, money, and resources.
• Separation – Parent brands are disconnected, and may find challenges when trying to enhance the reputation of other brands
• Perception – Managing perception towards communicating who you represent (brand) might be challenging for consumers.

HYBRID

A House of Brands may also blend into a Hybrid, where one of the “sub-brands” may also be considered as a parent brand by its own merit. Basically, they are huge companies or brands that host long histories of bridging and maintaining connections with consumers. Prime examples are Coca-Cola and Pepsi. Each is known for its respective offerings, but each business is the parent to many other stand-alone brands, like Fanta, Sprite, Fuze Tea, POWERADE, and so on.

THE ENDORSED BRAND

An Endorsed Brand merges varying aspects from the Branded House model and the House of Brands model, as described above, where an array of markedly different brands, products, or services are positioned individually, and yet are carried under the singular parent brand, similar to the House of Brands model.

While each sub-brand is clearly different, they exhibit an association with its endorser (parent brand) by placing some form of visual reference or brand mark, somewhat similar to the Branded House model.

Nestlé provides a perfect example of how this works, as shown below.

Pros:

This type of model provides flexibility in naming and brand building.

• Take advantage of preexisting brand equity and the reputation of the endorser brand
• Diminished need to establish brand awareness from the ground up
• Improved marketing efficiency and lower costs when combined with the parent brand

Cons:

While endorsed brands have many unique returns, they also come with their own set of risks that other methods don’t

• Brand reputation is intertwined, and can affect each other adversely.
• Brands must follow the brand principles, values, and beliefs of the parent brand
• Dealing with multiple brand departments can often create issues in efficiency

Sub Brand Considerations

Choosing the right brand architecture and developing sub-brands for your company should not be done lightly, as it will likely affect a whole array of preceding activities relating to developing your existing brand, such as:

• Having to redefine your brand identity, core message/s, goals, and objectives
• Reconsidering how to adjust your existing brand/marketing strategies
• Handling things like adjusting websites or reprinting brand collateral…

With that in mind, Sub branding can be a valuable means to handle organizational aspects when dealing with the complexities of a growing company.

Well-established sub-brands become more than simply a gateway to new audiences and revenue sources. When applied effectively, they can aid in providing parent brands a means to engage with different audiences that previously had little interest in the company beforehand.

While it all sounds great being able to provide new appeal and avenues to new audiences, be mindful of the fact, undergoing the process of generating a new child brand will require massive work, which begs the question, does your company actually need to launch a new sub-brand? Basically, you need to ensure that the purpose and offering of your new sub-brand or company are different from that of your parent company, otherwise, you are just wasting time and money.

Conclusion

Companies that have set the foundations for establishing future growth, tend to achieve great things, especially when the sub-brands they own follow well-defined strategies appropriately. However, managing an effective brand architecture that contains varying multiple sub-brands, will in turn demand all members, organizations, and teams to work together cohesively and efficiently.

As an organization grows, splinters, and transforms, it inevitably becomes more and more difficult to consolidate organizations to work efficiently. It demands all parties maintain clarity to ensure all branding efforts are implemented across the board, consistently.

Whatever strategies you employ to govern your sub-brands, be sure to reduce the chance for confusion, for both customers and employees. As your brand architecture gains in strength over time, the more sustainable your business becomes.

Appointing a Neutral Party

As mentioned in the introduction, one of the prime factors that explain why companies often find themselves unaware of varying confusions created by bad Brand Architecture is because internal members have been involved with clarifying their own brands, and products for so long they have become accustomed to how the company classifies and organizes their deliverables, and as such lack an unbiased perspective.

Hiring an external party to evaluate objectively can serve to provide impartial observations.

Where they can ask critical questions and submit strategic recommendations without dealing with inner politics, ego, insecurity, sense of ownership, and other negative issues associated. What’s more, it's likely your organization doesn’t conduct major branding activities very often, so it makes sense to hire an agency that specializes in branding to provide relevant experience and appropriate solutions for your branding needs.

Our Brand Architecture Methodology

Throughout the process of determining your Brand Architecture, we conduct a process called Segmentation, where we define and map your current audience/s into one or more applicable segments associated with each of your products, brand, or services.

We then take a look deeper into consumer behavior, activities may include conducting an array of online interviews and or surveys to determine what influences decision-making and what preferential motives people have towards purchasing your brands, products, and or services.

Next, we target by defining the most appropriate market segments for each of your brands, products, and or services and their respective variants.
This process will naturally lead us to define your Positioning, whereby we will formulate your branding strategies to align with each of your brands, products, and or services and their respective variants.

Lastly, we will produce a concise Branding Guideline to facilitate consistency upon an array of varying brand applications as part of the overall brand strategy applied.