What is common amongst companies such as Sony, P&G, Hindustan Lever, Amazon, and FedEx? Yes, they are all established players in their domain and have a strong brand presence. But, apart from that what resonates across these brands is a strong brand architecture that emphasizes their corporate brand name over individual brands. As we delve deeper into the empowered economy, brands across the globe are gearing up to provide authentic brand experiences that set them apart from the competition. A bid to do so means a certain re-evaluation of their offer. What it also means is taking a strategic approach to growth planning to develop their brand portfolio so that they can offer their consumers what they need, when they need it. But how can they ensure the same? The answer lies in brand architecture.
What is brand architecture?
A brands architecture is the parameter which provides clarity on the organization of the brands in its portfolio. So, while brand building is focused on driving experiences for the customers, a brand’s architecture provides a structural plan to ensure that everything that goes into driving these experiences fits organically.
Brand architecture thus emerges as a strategic roadmap for a brand’s present and future success. Companies that have been in business for a long time usually grow through acquisitions and expansions of their product portfolios. The company thus becomes a mix of new as well as legacy brands that have their individual visual and verbal identities. A brand architecture ensures that the brand has a solid structure to prevent confusion. Quite simply, brand architecture is the wall that separates the gazelle’s enclosure from the lion’s in the zoo. And in most cases, it is that structure that prevents your brand from turning into a zoo.
A strong brand architecture helps in maintaining clear product differentiations while also providing a hierarchy that explains the relationships between the products and other offerings that constitute an organization’s portfolio. It is this structure that helps both customers and employees understand the relationship between the different brands in a single portfolio. It also provides insights into how to grow and scale products over a period of time and ensures that new product lines fit in seamlessly in the different brand divisions.
The types of brand architecture:
Branded House: This architecture is employed where the portfolio of solutions and the operating companies fall under the name of the master brand. FedEx is a great example of this architecture.
Sub-Brands: In Sub-brands, the corporate brand is utilized to create a new brand. Here, however, the corporate brand stands as a separate entity. A good example would be the Sony PlayStation. This brand is under the Sony wing, but its success is independent of Sony.
Endorsed brands: These enjoy the support of the parent brand but have a lesser reliance on it. Nescafe from the house of Nestle is an example of the Endorsed Brand.
House of Brands: When an organization has multiple products in its portfolio under one parent brand it is called the House of Brands. P&G, for example, is the House of Brands with multiple products that have been marketed through the years under individual product names.
Benefits of a well-defined Brand Architecture:
1) Define brand roles
Brand architecture plays a pivotal role in defining the role of each brand asset. Scotch Magic Tape, for example, leverages ‘Scotch’ as the Master brand. Magic Tape is the sub-brand and 3M here is the Endorser Brand. A solid brand architecture allows the brand to play multiple roles in accordance with the needs of the business. Take the example of Sony. Sony is the corporate brand here and has Sony Pictures and Sony Music as Master Brands. Sony Bravia is the Sub-Brand and Vaio was the independent brand under its umbrella.
2) Establishes clarity of messaging
Brand architecture determines how brands should address their customers, how should a brand be represented in different geographies and identifies how brand synergies can be leveraged between brands and different business units. It helps in the proper segmentation of the brands with targeted messaging so that the customer hears and gets exactly what he/she is looking for.
3) Provides flexibility for expansion
An intuitive brand architecture sets the stage that brands need to grow and provides flexibility for expansion. It also helps brands leverage the credibility of the existing brands to create growth opportunities as well as helps the brand to build their product portfolio in an effective manner.
4) Provides opportunities for cross-selling
By providing clarity on the sub-brands, targeted customers gain a greater understanding of the unique value proposition of the product. It becomes much easier to cross-sell and convert the customer of one sub-brand to become a customer of another such sub-brand.
5) Indicates how to align resources with the business goals
By providing greater brand clarity with regards to what each sub-brand can do for its customer, a solid brand architecture helps an organization determine how to best apportion its marketing resources to provide visible diversification in the marketplace. With the clarity of synergies between products, divisions, and services, it becomes easier to allocate marketing resources and thereby increase marketing efficiencies without overstretching.
6) Builds and protects brand equity
Brand equity is a valuable asset for any company. A strong brand architecture allows equity to flow through the entire brand portfolio by defining the relationship between the portfolio brands. This also helps in establishing industry authority.
7) Directs strategic priorities
Not all brands in a portfolio are equally important. Brand architecture helps in directing the strategic priorities of an organization to guide decisions about investments and innovations as the sub-brands compete for resources. With the help of a brand architecture, organizations can determine which is a strategic brand that will contribute to the future growth of the company, which is the money-making brand but does not provide future opportunities for growth, which brand addresses a competitive threat, and which brand creates identifiable differentiation of another brand. Starbucks coffee houses and their express format stores are the money-making brands. The Starbucks Reserve Stores, Starbucks Reserve™ Roastery and Tasting Room and Teavana are the strategic brands while Seattle’s Best Coffee, a company that Starbucks acquired in 2003 is the Flanker or Fighter brand that addresses the competitive threat.
Strong brand architecture plays a pivotal role in establishing the brand value for category dominance and limits risks by containing the brand reputation. Today’s complex marketplace demands a hybrid approach to brand architecture, one that falls between the Branded House and House of Brand’s spectrum. Disney, for example, uses a mix of brand architecture solutions to build its diverse businesses.
The absence of a strong brand architecture can put a brand’s value at risk and could cost market share. Brand architecture should thus be built with meticulous precision so that brands can ensure that brand experiences align as the target audience expects. By providing clarity from chaos, a solid brand architecture sharpens the edge of ongoing brand efforts and ensures that the different brands under the company umbrella do not end up becoming their own competition.
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