Brand Architecture Strategy

What is brand architecture? Brand architecture is the logical, strategic, and relational structure for all brands in the portfolio. Customers relate to brands at different levels — a corporate (or primary brand), endorsed brands, product brands, and product descriptors. This allows an organization to create a brand portfolio that appeals to distinct segments or needs states.

Brand Architecture Strategy. What is brand architecture?Here are a few brand architecture examples:

  • Coca Cola Company vs. Coke vs. Diet Coke vs. Diet Coke Caffeine-Free vs. PowerAde (from the Coca Cola Company)
  • Apple vs. Mac vs. iPod vs. iPhone vs. iPad
  • The Gap vs. the Banana Republic vs. Old Navy vs. Athleta vs. Piperlime. Within the Gap exists Baby Gap, Gap Kids, and a host of individual product brands
The primary brand often carries emotional benefits, with endorser brands conveying rational benefits and target-specific relevance.

Brand Architecture Strategy Objectives

Branding architecture objectives include clarity, synergy, and leverage:
  • Clarity. The architecture must promote clarity both to the marketplace and internally. Key questions: Will customers understand their purchase and how it relates to other offerings? Are we consistent and single-minded in presenting the key benefits of each brand relative to another?
  • Synergy. The brand structure should allow the organization to deliver against a larger brand promise than any single brand could achieve. Key question: Have we created strategic linkage to provide incremental value (i.e., the idea of 1 + 1 = 3; Honda adds to Accord, Accord adds to Honda)?
  • Leverage. A well-managed brand framework should provide leverage for a company to extend its brands horizontally and vertically to capture new customer segments and markets. Key question: Have we enabled brand extension or new brand creation opportunities given the vision for the brand?

Brand Architecture Issues and Considerations

Several factors need to be considered in developing and evaluating alternatives. There is no one-size-fits-all solution or magic formula for defining the optimal brand hierarchies or brand portfolio structure.
Brand portfolio recommendations should be informed by the following question areas:
  • Brand strength: What are current brand associations, and how strong are existing brand equities?
  • Customer bandwidth: How many brands can customers understand?
  • Strategic decisions: Do particular circumstances (e .g .,partnerships) dictate tighter or looser brand linkages?
  • Financial resources: How many brands can the organization afford to support?

House of Brands vs. Branded House vs. The Right Answer

A lot has been written about various brand hierarchy models, broadly ranging from a branded vs house of brands approach. Here’s a breakdown:
  • A branded house uses a single primary brand to span a set of offerings operating with descriptive subbrands. Brand architecture example: BMW 3 Series vs. 5 series, etc.
    • One primary brand creates a clear umbrella with descriptors
    • Invests in established brand equity with minimal investment behind new offerings
    • Strong economies of scale
    • Typically, the default, go-to strategy
  • Sub-brands add to or modify associations of the master brand. Example: Honda Accord
    • Stretches the primary brand to new areas
    • Sub-Brands may have a different value proposition, positioning and brand identity
  • Endorsed brands provide credibility to the endorsed brand
    • Though linked, the endorsed brand has freedom to develop a brand identity different from that of the endorser. Brand architecture example: Mini and BMW
  • A house of brands contains an independent set of stand-alone brands each focusing on maximizing the impact on a particular market. It
    • Tightly positions on specific benefits
    • Potential to dominate niche segments
    • Useful to avoid incompatible associations

In practice, brand architecture development is not an either/or decision, and the full brand spectrum should be considered. Brand architecture examples can provide useful insight into strategic alternatives.

A Trend Toward a Branded House Strategy Approach

A best practice in brand architecture management is to invest in the fewest number of brands needed to meet business goals. This recognizes the expense and complexity of creating and managing brands.

For this reason, there has been a shift toward building a powerful master brand and then using generic descriptors to name offerings.

In this case, the master brand is elevated and extended over other brands to achieve economic leverage. This approach maximizes resources behind one brand (puts more wood behind one arrow) and minimizes brand confusion and unnecessary proliferation.

With a branded house, it’s typically best to describe or name rather than brand individual offerings. Here’s the distinction:

  • Names are simple descriptors that serve to identify the tangible value the consumer receives.
  • Brands require investment and management and represent a value greater than the functionality of the offering alone.

In this default strategy, the master brand is used in concert with generic, non-branded product descriptors to promote clarity.

Establishing Clear Brand Architecture Strategy Roles

While a branded house is often preferred, there are cases when a portfolio of brands makes sense. In these instances, distinct brands may play specialized roles, much like the positions on a sports team.

Amazon is a great brand architecture example. Amazon invests in numerous strategic brands—Amazon .com, Prime, Echo, and Kindle. These brands have clear targets and value propositions and represent meaningful sales and profits in the future.

Other company brands, Amazon Basics, Amazon Essentials, and Goodthreads in apparel—play targeted roles at a lower level, tied to value tiers. Amazon 1-Click serves as a branded feature that signifies shopping efficiency. All told, Amazon has hundreds of different trademarks, each with its own target consumer and value proposition.

When managing multiple brands, consider the relative investment required. Launching a strategic brand (Amazon Prime) can be a multimillion-dollar proposition. Creating a branded differentiator (1-Click) can be considerably less costly.

Of course, nobody sets out to create a confusing brand architecture. Complexity, though, can set in when business managers seek to create excitement behind a new product offering or when one company acquires another.

Brands not adequately managed and invested in risk becoming “empty vessels” with no real meaning in the marketplace. In these cases, it’s necessary to clean up the architecture to present a clear portfolio.

Brand Architecture Strategy Management

EquiBrand has broad and deep experience in both B2C and B2B brand architecture management.

In creating the optimal strategy, we consider several key components: brand audit, brand portfolio principles, brand hierarchy framework, and the brand naming decision tree, as described here.

To speak with an experienced brand architect and learn more about EquiBrand’s brand portfolio management services, call Tim Koelzer at 925-235-9556 or fill out a contact form.