Brand Architecture

Brand architecture is how you organize and present your brands to your customers. It helps you communicate clearly and effectively, especially with multiple products or services. In this article, you will learn what brand architecture is, how it works, and why it matters for your brand.

What is Brand Architecture?

Brand architecture is the system that shows how your brands are related. It includes the corporate brand, which is the central identity of your company, and the sub-brands, which are the different products, services, or divisions you offer.

For example, Apple is a corporate brand that has sub-brands like iPhone, iPad, and Mac. Each sub-brand has its name, logo, and personality, but they all share Apple's values and vision.

Brand architecture is vital for companies with multiple offerings because it helps them create a consistent and unified brand experience for their customers. It also helps them avoid confusion and competition among their sub-brands.

What are the Benefits of Brand Architecture?

A well-designed brand architecture can bring many benefits to your company, such as:

Increased clarity:

Brand architecture helps you define and communicate your brand identity, value proposition, and positioning in the market. It also helps your customers understand your offer and how it differs from your competitors.

Increased revenue:

Brand architecture enables you to leverage the reputation and loyalty of your corporate brand to promote your sub-brands. It also allows you to cross-sell and upsell your products or services to different customer segments.

Increased brand equity:

Brand equity is your brand's value and recognition in the market. A strong and coherent brand architecture can increase brand equity and enhance competitive advantage.

Better company culture:

Brand architecture helps you align your employees with your brand vision and values. It also creates a sense of belonging and pride among your staff, who can identify with your brand and its sub-brands.

What are the Types of Brand Architecture?

There are three main types of brand architecture: Monolithic, Endorsed, and House of Brands. Each class has advantages and disadvantages, depending on your company's goals, market, and customers. There is also a hybrid type, a combination of the other types.

As we delve into various examples of brand architecture, a central theme emerges: determining the master brand's dominance. This crucial decision shapes whether and how much the master brand influences its sub-brands' identities. It is centred around the key question:

How dominant should the master brand be over its sub-brands?

The concept of 'Brand Architecture: Dominance of Master Brand' revolves around this interplay. It explores the possibilities, from sub-brands sharing a similar identity with minor tweaks, like a descriptor or color change, to a more subtle endorsement by the master brand, creating distinct but connected identities.

Alternatively, we might consider a complete separation, where sub-brands develop entirely independent identities, operating autonomously.

To better understand these options, we will examine each model and provide real-world brand examples, helping to clarify which approach might be best suited for your business.

Monolithic (or Branded House)

Monolithic brand architecture is when you use a single, overarching brand name for all your offerings.

This type of brand architecture emphasizes the corporate brand and its reputation across all sub-brands or product lines. It is effective when you want to transfer the trust and recognition of the leading brand to your sub-brands.

Some examples of companies that use monolithic brand architecture are Apple, Google, and FedEx.

The benefits of monolithic brand architecture are:‍

Simplicity:

It is easy to manage and communicate a single brand name and identity across all offerings.

Consistency:

It creates a coherent and unified brand experience for customers and employees.

Efficiency:

It reduces the cost and time of creating and maintaining multiple brands.

The drawbacks of monolithic brand architecture are:

Dilution:

It may weaken the impact and differentiation of the corporate brand if the sub-brands or product lines are too diverse or low-quality.

Risk:

It may expose the corporate brand to negative associations or reputational damage if one of the sub-brands or product lines fails or faces a crisis.

Endorsed (or Sub-Branded)

Endorsed brand architecture is when you combine the corporate brand name and the sub-brand name for your offerings.

This type of brand architecture balances the corporate and sub-brands, allowing them to benefit from each other's reputation and recognition. It is effective when you want to make some differentiation and flexibility for your sub-brands while maintaining a connection to the corporate brand.

Some examples of companies that use endorsed brand architecture are Marriott, Nestlé, and Microsoft.

The benefits of endorsed brand architecture are:

Synergy:

It creates a mutual reinforcement between the corporate brand and the sub-brands, enhancing their credibility and appeal.

Diversity:

It allows you to target different customer segments and markets with various sub-brands while leveraging the corporate brand's resources and support.

Protection:

It reduces the risk of damaging the corporate brand's image if one sub-brand fails or faces a crisis, as the sub-brands have their own identity and reputation.

The drawbacks of endorsed brand architecture are:

Complexity:

Managing and communicating multiple brand names and identities across all offerings requires more effort and investment.

Confusion:

It may create ambiguity and inconsistency in the brand experience for customers and employees, as the sub-brands have different personalities and values.

Competition:

It may create rivalry and cannibalization among the sub-brands, as they may compete for the same customers or resources.

House of Brands (or Pluralistic)

House of Brands architecture is when you use separate and distinct brand names for your offerings.

This type of brand architecture emphasizes the sub-brands and their individuality, giving them full autonomy and independence from the corporate brand. It is effective when creating maximum differentiation and diversity for your sub-brands and catering to different customer needs and preferences.

Some examples of companies that use house of brand architecture are Procter & Gamble, Unilever, and Volkswagen.

The benefits of the House of Brands architecture are:

Customization:

allows you to tailor your sub-brands to specific customer segments and markets, offering them unique value propositions and experiences.

Innovation: ‍

‍It encourages you to experiment and innovate with your sub-brands, creating new products or services that meet changing customer demands and expectations.

Expansion:

enables you to enter new markets or categories with your sub-brands without affecting the corporate brand's image or positioning.

The drawbacks of the House of Brands architecture are:

Fragmentation:

It may weaken the impact and recognition of the corporate brand, as the sub-brands operate independently and have little or no association with the corporate brand.

Duplication:

It may increase the cost and time of creating and maintaining multiple brands, as each sub-brand requires its own marketing and operational resources and strategies.

Isolation:

It may limit the opportunities for cross-selling and upselling among the sub-brands, as the customers may need to be made aware of or loyal to the corporate brand or its other sub-brands.

Hybrid (also called Mixed)

Hybrid brand architecture is when you use a mix of the other types of brand architecture, depending on the situation and your company's objectives and sub-brands.

This type of brand architecture allows you to adapt and optimize your brand strategy, taking advantage of the strengths and avoiding the weaknesses of each kind. It is effective when you want to create a flexible and dynamic brand portfolio that can respond to different market conditions and customer needs.

Some examples of companies that use hybrid brand architecture are Coca-Cola, Amazon, and Nike.

The benefits of hybrid brand architecture are:

Versatility:

It gives you the freedom and the option to choose the best type of brand architecture for each of your sub-brands, depending on their goals, market, and customers.

Balance:

It creates harmony and complementarity between the corporate brand and the sub-brands, maximizing their potential and performance.

Evolution:

It allows you to change and update your brand architecture as your company and sub-brands grow and evolve, keeping them relevant and competitive.

The drawbacks of hybrid brand architecture are:

Inconsistency:

‍It may create confusion and contradiction in the brand experience for customers and employees, as the sub-brands have different types and levels of connection to the corporate brand.

Complication:

It requires more skill and expertise to manage and communicate a complex and diverse brand portfolio, as each sub-brand has its type and identity.

Dilution:

‍It may reduce the focus and the clarity of the corporate brand and its vision and values, as the sub-brands have different types and personalities.

How do you choose one

To choose the best brand architecture for your company, you should consider the following factors:

Your business objectives and vision:

1. What are your goals and values as a company?
2. How do you want to position yourself in the market and the minds of your customers?
   

Your market position and competition:

1. How do you compare size, reputation, and offerings to your competitors?
2. How do you differentiate yourself from them?
   

Your customer segments and needs:  

1. Who are your target customers, and what are their needs, preferences, and expectations?
2. How do you segment them and tailor your offerings to them?
   

Your product portfolio and lifecycle:

1. ‍‍What are your current and potential products and services?
2. How do they relate to each other and your corporate brand?
3. How do they evolve?
   

Based on these factors, you can decide which brand architecture best suits your company and your brands. You can also use our examples to inspire and learn from their successes and failures.

Actionable Tips

Start with your brand vision and strategy:‍‍

1. Before you decide on your brand architecture, you should have a clear vision and strategy for your brand.
2. What is your brand’s purpose, values, and personality?
3. How do you want to position yourself in the market and the minds of your customers?
4. What are your short-term and long-term goals?
   

Research your market and customers: ‍

1. ‍You should also conduct market research and customer analysis to understand your competitive landscape and customer segments.
2. Who are your competitors, and how do they structure their brands?
3. Who are your target customers, and what are their needs, preferences, and expectations?
4. How do you segment them and tailor your offerings to them?

Evaluate your product portfolio and lifecycle:

1. You should also evaluate your current and potential products and services and how they relate to each other and your corporate brand.
2. How many products and services do you have, and how do they differ in quality, price, and features?
3. How do they evolve, and what are their growth prospects?
   

Choose the type of brand architecture that suits your needs:

1. You can choose the brand architecture that best suits your needs and objectives based on the above factors.
2. You can use the examples and benefits in this article to guide you.
3. You can also consult with experts or use tools to help you design your brand architecture.

Communicate and implement your brand architecture:

1. ‍‍Once you choose your brand architecture, you should communicate and implement it across your organization and channels.
2. You should create a brand identity and guidelines that reflect your brand architecture and ensure consistency and coherence.
3. You should also train your employees and partners to use and represent your brand architecture.
4. You should also monitor and measure the performance and impact of your brand architecture and make adjustments as needed.‍‍