What is Brand Architecture?Definition,Models,& Examples
As organisations look to enter untapped market segments, new challenges arise. For example, should you create another brand? If so, what role should each brand play? How can it reduce consumer confusion? This is where the concept of brand architecture comes into play.
This article highlights the need for brand architecture in brand management, reviews three major brand architecture models with real-world examples, and outlines the strengths and weaknesses of each.
What is Brand Architecture?
A brand architecture is the structure of a brand within an organisational unit. This is how brands within a company’s portfolio relate to each other and how they differ. Your architecture should define the different branding leagues within your organisation. How the corporate brand and sub-brands are related and supportive of each other.
Also, how the sub-brand reflects or reinforces the primary purpose of the corporate brand to which it belongs. Brand architecture decisions often revolve around how you manage your family of parent brands and sub-brands. Managing brand architecture to maximise shareholder value often requires the use of brand valuation model techniques.
Brand architecture can be defined as the integrated process of building a brand by establishing brand relationships between brand options in a competitive environment. An organisation’s brand architecture is always a legacy of past management decisions and the realities of competition faced in the marketplace.
Why is Brand Architecture Important?
A well-executed brand architecture has many benefits.
- Increase market clarity: Creating a brand architecture helps people understand your organisation and brand the way they want. This makes the product offering clear to all stakeholders, including consumers and employees.
- Increase revenue through cross-selling: A well-defined structure enables brands to offer compelling products and value propositions for multiple audiences. If a company can deliver a positive experience with its brand, it offers many opportunities for partners within its brand portfolio.
- Increased brand equity: Every brand serving a particular niche ultimately contributes to the growth and aggressive promotion of the parent company. The parent company therefore has more opportunities to generate new revenue, expand its customer base and increase the value (= brand equity) of the entire organisation.
- Improved company culture: Employees understand the brand’s place in the big picture and feel more engaged. In this way, brand architecture creates a sense of belonging.
- Reduce overall brand damage: Brand image threats don’t always have a direct negative impact on the parent company’s brand image. Depending on the brand architecture model chosen, the damage may be localised rather than spread throughout the organisation.
- Better change management: All brands need to adapt and change over time to respond to external influences. A clear system helps manage the process and ensures that necessary changes are implemented effectively and efficiently.
The key to successfully aligning brand relationships is adopting a brand system in your organisation, also known as a brand architecture model.
3 Different types of Brand Architecture?
A brand architecture model is a strategy that brings together a brand and its products under one overarching brand. These top brands are also commonly referred to as corporate, umbrella, family, mother, or master brands. It’s basically a parent company that operates multiple brands that offer different products at different price points to a wide range of consumers.
Below are examples of three major brand architecture patterns. They all have a parent/master brand with sub-brands.
1.The Branded House:
The brand house is the most common brand of brand architecture. As part of this type of architecture, the main brand is the organisation. The main brand may have several sub-brands, which may include variations of the main brand name and logo as well as product names and service descriptions. This is a holistic branding strategy that allows you to grow and market your brand. However, they do not operate independently and follow common corporate branding principles and strategies.
- FedEx – edEx Express, FedEx Ground, FedEx Freight, FedEx Office, etc…
- Apple – Apple Pay, Apple iPad, Apple iPhone…
- Samsung – Samsung Electronics, Samsung Life Insurance, Samsung Construction…
- General Electric – GE Energy, GE Money, GE Healthcare, GE Aviation and more…
- Smithsonian – Smithsonian National Zoo, Smithsonian National Portrait Gallery, Smithsonian Books and more.
Advantages of Branded House architecture:
- Ease of creation and maintenance to create a strong brand.
- Customers choose based on brand loyalty (high awareness).
- Product features and benefits are less important to consumers than brand promises.
Disadvantages of Branded House architecture:
- The more widespread the business proposition, the less important the brand becomes.
- It’s prone to PR woes, and if the main brand goes out of business, all the sub-brands will suffer.
- New brands resulting from mergers and acquisitions will have to change their names (lose market share).
2) House of Brands :
In the House of Brands brand architecture model, an organisation owns a collection of individual brands under a parent brand. Brands are managed and marketed separately using their respective brand names, logos, slogans and promotional tactics. A parent brand is needed primarily for administrative or investment reasons. To clarify the difference between brand house and brand house architecture, in the brand house model customers experience the parent company at every point of interaction with the sub-brand. , within the House of Brands, each brand expresses a unique message and positions itself as a unique brand in a specific market segment.
- Procter & Gamble — Gillette, Tide, Old Spice, Braun, Head & Shoulders, Oral B…
- Unilever — Lipton, Ax, Dub, Ben & Jerry’s, Knorr, Rexona, Magnum, Hermans…
- General Motors – Cadillac, GMC, Chevrolet, Opel, Buick, Pontiac, Hummer…
- Kraft Heinz Company – Philadelphia, Kool-Aid, Maxwell House…
- Volkswagen — Audi, Porsche, Skoda, Bugatti, Bentley…
- Coca-Cola — Sprite, Dasani, Schweppes, Minute Maid, Vitaminwater…
- Nestlé — Cheerios, Nesquik, KitKat, Milkybar, Nespresso, Gerber…
- PepsiCo — Gatorade, Mountain Dew, Tropicana, Aquafina…
- Mars Wrigley—DoubleMint, Bounty, M&M’s, Orbit, Snickers, Skittles, Twix, Winter Fresh…
- LVMH – Christian Dior, Fendi, Givenchy, Marc Jacobs, Hennessy, Tiffany, Sephora and more.
Advantages of House of Brands architecture
- This allows individual sub-brands to target specific niches or new categories.
- This further diversified business and investment opportunities.
- We facilitate the acquisition of brands from other companies, the sale of existing brands and the resolution of mergers.
Disadvantages of House of Brands architecture
- Creating new sub-brands (legal, creative, marketing, etc.) is expensive.
- Creating a new brand without support is a difficult task.
- Introducing a new brand takes time and money.
3) Hybrid Brand Architecture :
In between the two trademark architectural patterns above is hybrid architecture, also known as mixed housing. A hybrid brand architecture combines elements of the brand house model and the brand house model to deliver maximum benefit to each sub-brand. By authorization or independence. Unlike complete brand independence, recommendation strategies include parent brands and related sub-brands. All sub-brands deliver on their brand promise, but use elements of their parent company as a clear way to capitalise on the reputation of their parent brand.
- Google – Google Pay, Gmail, YouTube, Android, Waymo, etc.
- Coca-Cola – Diet Coke, Coke Zero, Sprite, Dasani, Vitaminwater and more.
- Walt Disney – Walt Disney World, Disneyland, Disney+, plus ESPN+, Marvel, ABC News and more.
- Marriott – Marriott Courtyard or Marriott SpringHill Suites, The Ritz-Carlton, Sheraton, W Hotels and more.
- Microsoft – Microsoft Office, Outlook, Windows, Skype, Xbox, Bing, etc.
- Amazon – Amazon Prime, Amazon Fresh, Amazon Kindle, Whole Foods, Zappos, Twitch, and more.
Advantages of Hybrid Brand Architecture:
- This basically gives you the best of both worlds.
- Allows mergers/acquisitions of different types of brands.
- Some sub-brands have new identities, others may be closely related (more flexible).
Disadvantages of Hybrid Brand Architecture:
- There can be confusion about which sub-brands should be independent, which sub-brands should be supported, etc.
- Constantly updating a brand book across the board can be difficult.
Which Brand Architecture Type Should You Select?
Discussing the strengths and weaknesses of each brand architecture model can help you decide which structure to choose for your organisation.
However, regardless of the pros and cons of each model, it is important to first analyse and understand your organisation and existing setup. You should ask yourself:
- What is the scope of our products/services?
- What are the potential new features and enhancements on the horizon?
- What about industry trends?
- How do we communicate now?
- What is our market share?
- What is your return on investment?
Any brand architecture should aim to add value to existing products and services while realising synergies that strengthen the overall portfolio of (future) brands. It’s important to note that brand architecture is not a static concept.
Due to the ever-changing nature of business (mergers, acquisitions, brand extensions, new product launches, etc.), brand managers should regularly monitor and review their current architecture and make adjustments as necessary. In this way, you can ensure that your entire organisation and every brand can fully benefit from your chosen architectural framework.
A well-executed brand architecture can bring many benefits to an organisation. You can increase profits, increase brand value, attract customers, and create a concise corporate culture with a compelling brand story. Depending on your organisation’s needs, you can choose from three brand architecture models, each with their own advantages and disadvantages.
Sub-brands within a Brand House can benefit from the reputation and visibility of the parent brand. Under House of Brands, new products can be safely added to the company’s portfolio while protecting the organisation’s brand reputation.
A hybrid brand architecture model gives you the best of both worlds, but you also have to factor in increased management time and costs. Analysing your existing product offerings and current positioning is essential to successfully setting up your brand architecture.
When consumers receive mixed messages and ambiguous correlations between brand families, brand architecture harms organisations by misleading and confusing the general public.