What is Brand architecture and what are its advantages?

What is Brand Architecture?

Brand architecture is the framework that defines how a company’s brand portfolio will be structured. The goal of brand architecture is to create a system that allows each sub-brand within the portfolio to have its own unique identity while still being able to operate under the umbrella of the parent brand.

For example, Alphabet Inc. (formerly Google) has a very complex brand architecture with dozens of sub-brands such as Verily, Nest, Calico, and Google X. These sub-brands operate independently from each other, but they are all still seen as part of the larger Alphabet brand. Each sub-brand has its own unique identity, but they are all still able to operate under the Alphabet umbrella.

Definition

Brand architecture is defined as how various sub-brands of a parent company are organized and managed. Brand architecture provides a framework for managing multiple brands within an organization, as well as a guide for creating new brands.

Brand architecture can be used to create a cohesive brand portfolio, differentiate brands within the same product category, or simply make it easier for consumers to understand an organization’s offerings.

All in all, a company’s brand architecture defines the relationships between its brands, sub-brands, products, and/or services. An effective brand structure includes a system of names, symbols, colors, and visuals that are based on how consumers think. Brand architecture can be thought of as a “brand family tree” with the parent brand at the top, followed by sub-brands, product lines, and individual products.

Why is Brand Architecture Important?

The goal of brand architecture is to create a system that allows each sub-brand within the portfolio to have its own unique identity while still being able to operate under the umbrella of the parent brand.

Some of the reasons behind its importance are

1. Improved clarity for consumers in the marketplace

With a well-defined brand architecture, each sub-brand within a company’s portfolio has its own unique identity.

This helps to create clarity for consumers in the marketplace and makes it easier for them to understand what each sub-brand represents.

2. Helps to clarify your brand identity

A strong brand identity is important for any company, but it can be especially important for companies with multiple sub-brands.

Brand architecture can help to clarify your brand identity by creating a system that allows each sub-brand to have its own unique identity.

3. More money through cross-selling

One of the benefits of brand architecture is that it can help to increase revenue through cross-selling.

The brand architecture allows companies to effectively market and sell multiple products or services under the same umbrella, which can lead to increased sales and higher profits.

4. Establish a clear corporate hierarchy

Brand architecture can also help to solidify the corporate hierarchy within a company.

When sub-brands have their identity, it is much simpler for customers to comprehend the brands. This system that brand architects put in place makes a clear hierarchy.

5. A more noticeable and favorable brand equity

Brand equity is the value of a brand that is created by the consumer’s perception of the brand. Having a clear brand architecture allows each sub-brand to have its own separate identity, thereby increasing the parent company’s overall equity.

This helps to create a positive perception of the company’s brands and can lead to increased sales and higher profits.

6. Improved customer perception

By establishing a brand architecture, you can give each sub-brand its own unique identity and help customers perceive your products more accurately.

This will help improve customer satisfaction and loyalty.

7. Optimized company culture

When employees understand the brand architecture, it can help create a better company culture.

Brand architecture gives each sub-brand its own identity, which helps to clarify the company’s overall mission and values. This can lead to increased employee morale and motivation.

8. Overall, there is less damage done to the parent brand

Brand architecture creates a system in which each sub-brand has its own unique identity.

This helps protect the parent company’s reputation and, as a result, can lead to reduced overall brand damage.

9. Effective expansion of product or service lines

Brand architecture can help companies expand their product or service lines effectively.

By creating a system in which each sub-brand has its own identity, companies can more easily add new products or services without damaging the parent brand’s reputation.

10. Better change management

Brand architecture can also help to make change management more effective. When companies have a clear brand architecture, they can more easily adapt to changes in the marketplace without damaging the parent brand’s reputation.

Brand architecture provides a framework that can help companies effectively manage change.

Components of Brands Architecture

1. Master brand

The master brand is the overall parent company that owns all of the sub-brands. The master brands are responsible for the entire company’s reputation and equity. For example, Coca-Cola is the master brand and owns sub-brands such as Minute Maid, Sprite, and Dasani.

2. Sub-brands

Sub-brands are the individual brands that fall under the umbrella of the parent company. Each sub-brand has its own unique identity and equity. For example, Minute Maid is a sub-brand of Coca-Cola.

3. Parent brand

The parent brand is the main company that owns all of the sub-brands. The parent brand is responsible for the entire company’s reputation and equity. For example, Apple is the parent brand and owns sub-brands such as iTunes, iCloud, and Apple Maps.

4. Umbrella brand

The umbrella brand is the overall parent company that owns all of the sub-brands. The umbrella brand is responsible for the entire company’s reputation and equity. For example, Unilever is an umbrella brand and owns sub-brands such as Dove, Lipton, and Hellmann.

Types of Brand Architecture Models

Let’s have a look at the different types of brand architecture examples and understand their working-

1. Branded House Architecture

In a branded house model, all of the sub-brands fall under the umbrella of the parent company. The parent company’s name and reputation are used to promote and sell all of the products.

A branded house is a company with a strong central brand name that is used across all divisions and products. This type of branding creates customer loyalty and recognition.

For example, GE is a branded house. All of GE’s sub-brands, such as GE Capital, GE Healthcare, and GE Power, use the GE name and logo.

2. House of Brands

In a house of brands model, each sub-brand has its name, identity, and equity. The parent company’s name is not used to promote or sell the products.

In a house of brand architecture, there is a parent brand that customers may or may not know about and underneath it are several distinct yet familiar smaller brands. The parent brand is only important to the investors.

For example, Nestle is a house of brands. Nestle’s sub-brands, such as Nespresso, KitKat, and Smarties, have their own names and identities. The Nestle name is not used to promote or sell these products.

3. Endorsed Brands

In an endorsed model, the parent company’s name is used to promote and sell the products, but the sub-brands have their own names and identities.

Endorsed brand architecture is when a parent company uses its name and credibility to endorse a new or acquired subsidiary that has a different name. The endorsement by the parent company helps the subsidiary’s product to be more trusted and accepted in the market.

For example, Honda is an example of endorsed brand architecture. Honda’s sub-brands, such as Acura and Honda Motorcycles, have their own names and identities. However, the Honda name is used to promote and sell these products.

4. Hybrid Brand Architecture

In a hybrid model, some of the sub-brands use the parent company’s name, while others have their names and identities.

Hybrid brand architecture is a mix of the branded house, house of brands, and endorsed models. In this model, some products will use the parent company’s name while others will be marketed under a sub-brand.

For example, Microsoft is a hybrid brand. Some of Microsoft’s sub-brands, such as Xbox and Skype, use the Microsoft name, while others, such as Bing and Office 365, have their names and identities.

Which Brand Architecture Model is Right for Your Business?

There is no one-size-fits-all answer to this question. The type of brand architecture model that is right for your business depends on your company’s goals, products, and target market.

If you want to create a strong central brand that is recognizable and trusted by customers, then a branded house model might be right for you. If you want each of your products to have its own identity, then a house of brands model might be a better fit. And if you want to use your company’s name and reputation to promote new products, then an endorsed model might be the way to go.

No matter which brand architecture model you choose, it’s important to have a clear and consistent branding strategy that is aligned with your business goals.

Steps to Create a Solid Brand Architecture Strategy

Research: The first step is to do your research. You need to understand your company, your products, and your target market.

Define Your Brand

Once you have done your research, you need to define your brand. What are your core values? What makes you unique? What do you want to be known for?

Develop a Branding Strategy

Once you have defined your brand, you need to develop a branding strategy. This will help you create a consistent brand identity across all touchpoints.

Create a Brand Architecture Model

The next step is to choose the right brand architecture model for your business.

Implement Your Brand Architecture

After you have chosen the right model for your business, you need to implement it. This includes creating guidelines and processes for using your brand architecture.

Monitor and Adjust

The final step is to monitor your brand architecture and make adjustments as needed. This will help you ensure that your brand remains relevant and aligned with your business goals.

Factors important for Creating a Brand Architecture

There are several factors that you need to consider when creating a brand architecture.

• Your company’s goals: What are your company’s goals? Do you want to create a strong central brand? Or do you want each of your products to have its own identity?
• Your products: What type of products do you have? Is it a new product or an existing product?
• Your target market: Who is your target market? Do they prefer a strong central brand? Or do they prefer products with their own identities?
• Your brand equity:  What is your brand equity? Do you have a strong central brand that is recognizable and trusted by customers? Or do you have a weaker brand that needs to be strengthened?
• Your culture: What is your company’s culture? Are you a traditional company or a more modern company?
• Your growth strategy: What is your growth strategy about brand extensions? Are you looking to expand into new markets? Or are you focused on growing in your existing markets?
• Market factors: What are the market factors that you need to consider? Is the market stable or is it changing rapidly?
• Disruption: Are you facing any disruptive forces in the market? Are new technologies or new companies changing the way that customers interact with your products?
• Cost: What is the cost of implementing and maintaining your brand architecture? Are you willing to invest the resources necessary to create a strong central brand? Or are you looking for a more cost-effective solution?

The Benefits of a Clear Brand Architecture:

There are several benefits of having a clear brand architecture.

Aligns your branding strategy with your business goals: When your brand architecture is clear, you can be certain that your branding goals are in-line with the overall objectives of your business.

Creates consistency across all touchpoints: A well-defined corporate brand architecture provides coherency from your website to social media platforms to product packaging.

Builds trust with customers: Customers are more likely to trust a brand that has a clear and consistent identity.

Improves customer loyalty: Having a well-laid-out brand architecture makes it simpler for customers to remain dedicated to your brand since they can easily identify and connect with it.

Increases sales: A well-defined brand can help keep customers coming back.

Reduces marketing costs: By having a clear brand architecture, you can organize your branding strategy in a way that is both cost-efficient and effective companies that.

Conclusion!

Brand architecture is a critical component of any brand strategy. It helps organizations to define the relationships between their brands and how they are positioned in the marketplace.

There are several different approaches to brand architecture, each with its own advantages and disadvantages. The approach that is right for an organization will depend on its specific goals and circumstances. Brand architects must carefully consider all of the factors involved in order to develop a brand strategy that will achieve the desired results.

What do you think is the best approach to brand architecture? Do you have any experience with designing or managing a brand architecture? Share your thoughts in the comments below.