Brand Architecture Strategy

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 master 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.

Here are a few 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 master brand often carries emotional benefits, with endorser brands conveying rational benefits and target-specific relevance.

Brand Architecture Strategy Objectives

Brand 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. Brand architecture 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 architecture 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

A number of factors need to be considered in developing and evaluating alternatives. There is no one-size-fits-all solution or magic formula for defining the appropriate brand architecture or brand portfolio structure.

Brand portfolio recommendations should be informed by the following three question areas:

Financial resources – how many brands can the organization afford to support?
Customer “bandwidth” – how many brands can customers understand?
Strategic decisions – do special circumstances (partnerships, etc.) dictate tighter or looser brand linkages?

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

A lot has been written about various brand hierarchy models, broadly ranging from a house of brands to a branded house approach. Here’s a breakdown:

A house of brands contains an independent set of stand-alone brands each focusing on maximizing the impact on a particular market.
A branded house uses a single masterbrand to span a set of offerings operating with descriptive subbrands.
Endorsed brands fit between these two approaches, where a master brand is paired with a brand that is lower on the brand hierarchy (e.g., Honda Accord, Courtyard by Marriott, etc.)

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.

Managing Brand Architecture

In managing brand architecture, there are several key components to consider: brand architecture audit, brand portfolio principles, brand hierarchy framework, and the brand naming decision tree, as described here.

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