Brand Architecture: What it is, Why it Matters, and How To Develop it
It is unusual to find a company that has just one brand.
As a business grows, branding can get complicated. And if you sell a variety of different products and provide a variety of services, they must be appropriately structured.
How do you ensure that your products and brands still communicate their affiliation clearly to your customers?
Brand architecture.
This guide will define brand architecture, asses several popular brand architecture models, highlight real-life examples, and provide guidelines for choosing the proper structure for your business.
What is brand architecture
Brand architecture refers to the hierarchy of an organization's brands, sub-brands, products, or services.
Brand architecture is a framework that organizes brands, products, and services in a way that enables customers to find, understand, and relate to them. This helps structure a brand portfolio so customers can quickly identify which brands are affiliated and at what level. It helps your customers understand the breadth and depth of your products or services.
Having an established brand architecture is helpful when developing brand extensions, sub-brands, and new products.
Brand architecture serves as a road map for brand identity development and design. In addition, it serves as a reminder for consumers as to the value proposition of the entire brand family. Hence, it maximizes brand value by leveraging your overall brand and sub-brands.
Branded or monolithic house model
Branded house architecture combines several house brands under one umbrella, leveraging the well-established master brand to build equity, awareness, and customer loyalty.
House brands often target different audience segments to maximize revenue and reach.
There is one strong, single brand in branded house architecture (also known as monolithic structures).
A master brand has a high dominance over all sub-brands within the structure.
Therefore, all sub-brands are derivatives of the master brand.
As the sub-brands do not have their own identity, they are dependent on the strength of the master brand. While they share the same visual identity, they have made minor modifications, such as changing their colors and adding new extensions.
Generally, the master brand has a logo, and the sub-brands have a logo and a descriptive name for each product or service.
A successful brand architecture aims to enable good customer relations and to form opinions and preferences for a family of brands by interacting with or learning about each brand.
Pros of the branded house model
- Consumers tend to buy products or services that feel familiar to them. Monolithic or branded house architecture will enhance consumer recognition of your brand.
- All brands can benefit from one marketing strategy, which reduces the cost of marketing.
- Your customers will not be confused about which sub-brands fall under your brand; the branded house architecture makes it crystal clear that all these brands are part of the same company.
- Sub-brands benefit from the resources provided by the stronger master brand.
Cons of the branded house model
- Most brands have products and services in various categories that are not necessarily related to one another. It may be unclear to consumers what your brand does; is it a nutrition company? Or a fitness brand?
- There is a possibility that a problem with one sub-brand may involve the entire brand as a whole. In addition, if the master or parent brand is underperforming, it is unlikely that the other brands are doing well as well.
- New brands that result from mergers and acquisitions should be rebranded, which might result in these brands struggling to retain their equity.
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Examples of Monolithic or Branded House model
Apple
Through a branded house architecture, Apple creates an integrated look and feel across the company’s various sub-brands, including iPad, iPhone, iMac, Watch, and TV.
image credit: BrandMasterAcademy
By leveraging Apple’s loyal customer base, sub-brands improve their equity and are more likely to attract customers.
FedEx
image credit: Rattleback
Among the best examples is FedEx. In contrast with FedEx’s master brand, FedEx Kinko’s provides a very different series of services (while being complementary). Since it is easily linked to FedEx, the two companies have common brand equity. In a branded house, brands have the same identity (in this case, FedEx’s iconic logo).
Is a Branded House model for you?
If your company has one brand that can hit home runs in all categories, including markets, target audiences, geographical barriers, and even language barriers, then monolithic or branded house architecture may be suitable.
House of Brands model
An approach based on the House of Brands (also known as pluralistic) brand architecture is the polar opposite of a monolithic or branded house architecture.
This structure has no link between the master brands and sub-brands.
This means that the parent company’s name is entirely hidden, and new brands are introduced, each with its distinctive image.
The brands are all independent and act as stand-alone entities. The brands differ in their positioning, features, target audiences, and distinctive brand identity; sometimes, they compete. As a result, consumers may be unaware that certain brands are affiliated with the same parent company.
In a house of brands architecture, the master brand is downplayed to focus on the sub-brands. The master brand is primarily of interest only to the investment community and not so much to the direct consumers.
By separating messaging, appearance, and positioning from the master brand, the sub-brands can shine independently. However, it also increases complexity since each brand has a distinct audience, identity, marketing strategy, and brand equity.
Due to that complexity, companies that utilize a house of brands structure are typically large global brands with established equity.
Generally, a house of brands operates as a holding company for its various portfolio brands, each managed as a separate entity. Due to the legal complexity inherent in this strategy, it also involves substantially higher costs.
Pros of the House of Brands model
- Separate sub-brands can target niche markets or new categories.
- Greater diversification of business and investment opportunities.
- A company can easily acquire brands from other companies, sell existing brands, or merge with another company.
Cons of House of Brands model
- The creation of new sub-brands is an expensive process. This entails separate legal, creative, marketing, etc., expenses for each brand.
- Establishing a new brand without endorsement from an established master brand can be challenging.
- Building awareness for new brands takes time and money.
Examples of House of Brands model
Procter & Gamble
A classic example of a House of Brands brand architecture would be Proctor and Gamble (P&G).
If, say, Gillette or Tide, one of P&G’s subbrands, experienced a crisis, none of the other brands would be affected.
On the other hand, when a sub-brand receives favorable publicity, it does not benefit the other brands.
image credit: Kamarupa
Yum! Brands
Often, master brands, such as Procter & Gamble, are well known, but they can also be hidden behind the scenes. That’s how Yum! Brands operate their sub-brands.
Is a House of Brands model for you?
This arrangement generally works well for large consumer companies, particularly those involved in the fast-moving consumer goods sector.
Additionally, this can be useful if you have a variety of brands and wish to maximize each brand’s impact on a market, target audience, or brand positioning.
Hybrid Brands model
A hybrid brand architecture model is simply the combination of multiple models under one umbrella. – some sub-brands are linked to the master brand, while others remain independent.
This structure is intended to create similar styles for the sub-brands while maintaining distinct brand identities.
A hybrid brand model usually occurs when a company starts with only one brand, and extensions are created as it grows. The company acquires or develops new, separate brands to better compete in the market.
When both the master brand and its new sub-brand offer well-known products or services, forcing them to adopt new brand identities is unwise. As a result, the master brand may have relationships with some sub-brands but not with others.
A hybrid brand might be an ideal option for some brands. Still, it is not always suitable because different brands and extensions can be difficult for customers, marketers, and investors to track.
A hybrid architecture may mention the master brand in marketing, but most companies use this model to keep the master and sub-brands separate following acquisitions and mergers. It is also an effective strategy for brands that want to cater to various target audiences.
Pros of Hybrid Brands model
- One can obtain the best of both worlds.
- It provides the ability to merge or acquire a variety of brands.
- Some sub-brands can have a new identity, while others are closely related (greater flexibility).
Cons of Hybrid Brands model
- It can be confusing to determine which sub-brands should be independent and which should be endorsed.
- The task of keeping the brand books up-to-date across all the brands can be quite a challenge.
Examples of Hybrid Brands model
Marriott Bonvoy
image credit: Marriott
Take, for instance, Marriott Bonvoy. As a result of a hybrid approach, the company has a diverse portfolio of hotel brands that includes luxury hotels, such as the Ritz-Carlton, and more affordable options, such as Residence Inn.
Disney
image credit: brandingpower
The Walt Disney Company is another example. On the one hand, they rely on branded house approaches with brands such as Walt Disney World.
On the other hand, they own various independent brands, including ABC and Marvel, which are not associated with Disney.
Is a Hybrid Brands model for you?
A hybrid model offers the flexibility of having multiple hierarchies within a company, including various levels of market-facing brands subordinated to subordinate brands.
Most companies that have adopted hybrid strategies have done so due to necessity. Often, hybrid architectures result from mergers and acquisitions rather than proactive brand management.
Endorsed Brand model
The endorsed brand model is a more flexible way of packaging brands under a master brand.
Depending on the context, each brand extension is given a separate identity and can be associated with the master brand. This way, a brand extension can have a unique brand strategy and target market while benefiting from the parent brand’s equity when appropriate.
An endorsed brand model lies between a branded house and a house of brands. It is somewhat similar to a branded house in how a sub-brand retains the reputation of the master brand and how the sister brands affect one another.
It would be possible, for example, for negative publicity surrounding one sister brand to negatively impact another and the master brand as a whole.
However, it is similar to a house of brands since it has independent market segments and branding.
In many cases, an endorsed brand model incorporates the logo and colors of the master brand. This allows the sub-brand to leverage the reputation of the main brand to enhance its brand equity, brand awareness, and security.
The endorsed brand model is ideal for companies that follow a hybrid approach and wish to have each sub-brand have its own identity without separating them from the master brand.
Contrary to the house of brands approach, the endorsed model identifies the main brand behind the product or service. Unlike the branded house model, an endorsed brand can possess a different look and feel from its master brand.
It is a good model if you are looking to leverage the familiarity of the master brand and, at the same time, maintain some differentiation among your range of products.
Pros of Endorsed Brand model
- A good reputation of the parent brand can benefit the endorsed brand (sub-brands) as it increases the consumer’s confidence in purchasing their product or service.
- The same marketing strategies can be applied to both parent brands and sub-brands. The system also facilitates cross-selling between subbrands or between subbrands and parent brands.
- Having the option of independence and benefiting from a relationship with the master brand.
- Sub-brands do not need to be built from scratch.
Cons of Endorsed Brand model
- There is a possibility that the target audience will not be able to distinguish the sub-brand from the parent brand.
- Consumers can recognize the sub-brand as part of the parent brand or associated with another sub-brand, so a negative reputation from the parent brand or another sub-brand could potentially harm the innocent sub-brand.
Examples of Endorsed Brands model
Virgin
image credit: brandculture
Virgin’s brand architecture is probably the best example that illustrates this principle. In this case, we can clearly distinguish between the master brand and all sub-brands. Using this model, new brands are being created that can operate independently and compete in different markets.
Kellogg’s
image credit: westminsterpromotions
Kellogg’s owns many brands with their identities, but you can easily find their logo on all of their sub-brands packaging, with some brands even having Kellogg’s in the name, such as “Kellogg’s Rice Krispies.”
Kellogg’s supports its numerous sub-brands by showing the company logo above the sub-brand name.
Is an Endorsed Brands model for you?
An endorsed brand architecture increases your brand’s flexibility by allowing sub-brands to carry different names while acknowledging that they are part of the parent brand. Additionally, it provides more positioning options than a house of brands approach.
As a general rule of thumb, if the sub-brand category is more distant from the master brand, you should choose the endorsed brand architecture.
How to build a well-defined brand architecture for your business
Defining brand architecture is one of the most critical steps in establishing a brand, as it provides the basis for an organized and intuitive brand strategy.
Despite the complexity of brand architecture, especially when dealing with dozens of sub-brands, the correct structure can guarantee that each brand retains its unique identity.
Three steps are involved in developing a brand architecture for your business: research, strategy, and implementation.
1. Research
An effective brand architecture begins with a thorough understanding of customer awareness, loyalty, and associations with the brand. The only way to discover how your target audience understands (or does not understand) your key offerings is by conducting research.
Research data will assist you in determining which type of brand architecture is best suited to your business strategy. This information allows you to parse your offerings or divisions in an understandable way to those who buy from you.
2. Strategy
The strategy phase involves determining the best brand architecture for your business.
Each brand architecture model offers different ways of leveraging (or not leveraging) the brand.
How closely do you wish to associate your sub-brands with your master brand? In particular, this question is relevant if you have recently completed a merger or acquisition (and even more relevant if a former competitor was involved in the process).
Is it necessary to cross-reference your various brands and promote them together, or should they remain independent? Answering this question and others like it requires creating illustrative examples of multiple architectural alternatives and identifying their pros and cons.
Ensure that each alternative is evaluated based on predetermined criteria to ensure objectivity.
Make sure that the connections between sub-brands, divisions, products, and services are clear.
If your customers are confused about the correlations between your extensions, cross-promotion between brands will not work. In general, the more common elements there are among your brands, the stronger the synergy will be.
Last but not least, be realistic in your budget and resource allocation. Create a system you can reasonably expect to support based on the available human resources and capital.
3. Implementation
Lastly, it would be best to outline a migration plan for the system you organized in the previous step.
Your strategy should include a naming structure and an identity system delineating your sub-brands and extensions.
A clearly defined brand architecture and visual and verbal breadcrumbs are crucial to helping customers, and external stakeholders navigate your brand.
As part of this final stage, deliverables should include a profile of your brand portfolio, which should include the following information:
- An overview of each brand’s strategic role
- A description of the scope of each brand (offers, geographies, customers)
- Relationships between each brand and the master brand
- Different approaches to the expression of each brand
Brand architecture is integral to your identity so you can reveal it in conjunction with your overarching brand positioning strategy.
Provide a clear structure that highlights the relationship between the master brand, sub-brands, and offerings, as well as connections between sub-brands.
Everyone in your team or organization should know every brand’s strategic role within the architecture framework and how it relates to customers.
Brand architecture comes down to parsing out the nuances of your brand and determining how to leverage each offering to ensure the company’s overall success.
Brand architecture is not simply about creating clever names for your company, products, and services. A strong name creates clarity from chaos and sharpens your ongoing branding efforts.
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