Every company needs Brand Architecture and yet it’s not a conversation often had early on when forming companies or launching the first products. The questions usually get asked and the conversation often starts when there’s an opportunity to acquire or sell a product line, or more products are being added but are a step to the left of the current product mix, or because there’s confusion.
So what is Brand Architecture and why should you care? It is the structure of brands within a business or entity. It is the way in which the brands within a company’s portfolio are structured, related to, and/or differentiated from, one another. This affects how to organise, manage and go to market. In short – it’s the ‘family tree’ of brands. Deciding this early on in your business journey can save a lot of headaches later on.
There are three common types of Brand Architecture (from the work of Dr. David Aaker):
- Branded House
- House of Brands
- Hybrid or Blended House
Branded House
The parent company and products all share the same brand. The Company is the brand. A well known example is Virgin – Virgin Money, Virgin Airlines, Vigrin Galactic, Virgin Mobile. The advantage of this approach is that the products can all share in the value and perceived equity of the parent company and can share market position, resources and marketing budget. The majortiy of markeing budget and effort is given to the Company ‘master’ brand level. As people grow to understand the Company values, ethos and quality etc, this becomes expected from any additonal products that carry the Company name.
It can be very valuable and can build trust, but in contrast it can reduce flexibility and does require a tight and cohesive business strategy so that products added can ensure this value is delivered consistently.
House of Brands
Another common approach is the ‘House of Brands’ or ‘Product Brand’ approach. Commonly used in FMCG and many B2C models, this is designed so product brands can stand on their own merit and have their own identity. This is the model used by Proctor and Gamble, where the Corporate entity and the products have separate branding. It is a multi brand approach. This can be more costly as each brand needs its own marketing strategy and budget.
“P&G is made of many individual brands, each serving customers in different ways—but all with a focus on making peoples’ lives a little easier.”
– October 2016
Blended House
The final option is a blended house such as Johnson and Johnson. some are J&J branded, some are not (this also often occurs when acquistions are made). Their portfolio includes other well known brands such as Band-Aid, Neutrogena, Aveeno, Clean and Clear as well as the Johnson & Johnson range of products such as their baby range. This approach is effective when the company wants to excel in one category but also have reach and products in others. Many people don’t know that J&J also sell medical devices and pharmaceutical devices – the main equity in their parent company is in baby products so they use this there, and other brand names in other categories. This approach can seem confused and chaotic, but like the other two types of achitecture, the best type of archutecture is the one that best supports your business strategy.
Corporate Brand
In each of these three scenarios, you need a clear Corporate brand. The degree to which this is used depends on the structure chosen eg: Branded House – this is huge! House of Brands – not as much, but it is important as it is relevant to more than just consumers. The Corporate Brand has a broad scope and is relevant to a large range of stakeholders including employees, investors, Directors, strategic partners, suppliers and more.
The corporate brand also impacts many aspects of sales and marketing, such as the customer’s evaluation of the company’s financial security (crucial in some industries such as building and construction), reputation, quality, product and services, after sales support etc.
The objective of the corporate brand is to build and maintain strong, consistent perceptions in the minds of customers, employees and clearly reflect the business strategy. It is not about a name, a logo, a font or a colour. It’s a sentiment, an experience and includes the treatment and training of employees, range and quality of products and services, the effectiveness and apporach for marekting, sales and customer service, the methodology for operations, the core value and ‘how we do things around here’.
The Vision-Culture-Image (VCI) Alignment Model by Hatch and Schultz 2001 shows that effective and authentic corporate branding is developed with input from, and careful consideration of the impact on, these three core areas:
Here are the top takeaways from this post:
- Know and communicate your Corporate Brand to your stakeholders
- Decide the best brand architecture for your business – there is no template for you to follow, its about what’s best for your business
- Develop marketing strategies and budgets accordingly
- Be prepared to change – market demands and changes will shape your business and therefore should shape your structure (the old adage structure follows strategy applies here)
