How important is brand architecture?

What is brand architecture?

Put simply, brand architecture is a visual representation that maps the relationship between your masterbrand and its sub-brands, products or services.

It should answer questions such as; how many products or services are you going to offer? How are they related to one another? How do they differ? How do you best articulate your offer to your customers? Where do other brands fit into your portfolio, if and when you choose to acquire them? Most importantly, it should define where to spend your marketing budget — are you building equity into the masterbrand, or investing more in individual sub-brands?

There are four brand architecture models.

Monolithic/branded house

There is a single masterbrand, followed by descriptive names for each product or service. One visual and verbal identity (tone of voice) strategy is used for all the products and services that the business provides.

Advantages:

• Increases brand awareness.
• Customers easily recognise the products or services.
• New products or services leverage the existing equity of the masterbrand and can gain rapid traction in the market.
• Focusses brand marketing (and marketing spend) on a single brand strategy and brand image.
• Streamlines business decisions on structure and growth.

Disadvantages:

If a single product or service goes through a crisis, the whole brand may suffer as a result – any negativity associated with a product/service is attributed to the masterbrand and the entire portfolio. Products and services need to be aligned to the masterbrand, otherwise they can look incoherent and untrustworthy.

Endorsed

There are individual product or service brands that have their own identities, but there is a clear link between them and the masterbrand. These are called ‘endorsed brands’ because the masterbrand endorses the products with its reputation.

Advantages:

• The product or service brands can leverage existing brand equity of the masterbrand and can gain rapid momentum into new markets.
• Marketing activities focus on both the product/service brand and the masterbrand.
• The connection between product brands can facilitate cross-selling.
• Increases brand agility into new markets.

Disadvantages:

If a single product or service brand goes through a crisis, the whole brand may suffer as a result – any negativity associated with a product/service brand is attributed to the brand and all its other products and services. There are also creative, legal, and time-to-market costs for every endorsed brand.

House of brands/stand-alone brands

Each brand has its own individual name, visual identity, personality, audience and can even compete with other brands from within the same ‘house’. As each brand is designed to be independent from the masterbrand and sister brands, it’s common for consumers to not be aware of the masterbrand.

Advantages:

• If one brand goes through a crisis, it’s not contagious to the other brands in the portfolio.
• Different audiences and markets can be targeted without a need for cohesion.
• Each brand is free to create its own identity and strategy, unburdened by the meaning of the masterbrand.
• It’s possible to test new opportunities and ideas without losing any equity in the masterbrand or other sub-brands.

Disadvantages:

• The time, resources and finances involved in planning and implementing the brand activities (strategy, identity and marketing) is greater, as all brands operate independently.
• Brand equity and success will not be immediately attributed to the masterbrand or across to sister brands in the portfolio.

Hybrid architecture

Sub-brands can be a combination of monolithic brands, endorsed brands or stand-alone brands. This approach often is a result of adopting different brand architectures when acquiring businesses through mergers and acquisitions.

Advantages:

The benefits of monolithic, endorsed and stand-alone brands can all be utilised.

Disadvantages:

Complex brand portfolio management, high development costs involved in planning and implementing brand activities and higher commercial and organisational maintenance costs.

The four different brand architecture models demonstrate different ways in which a customer can build relationships with a brand.

The BMW model is a good example of this. The company owns Mini, yet they are aware that BMW drivers and Mini drivers are two very different audience types, and keep them separate. BMW uses a numeric system for its car branding, creating clear offerings to the customer, allowing them to buy the model that is best for them.

For example, “I’m sporty and young so I’m going to drive a 3 series”. These people are more likely to upgrade to a 5 series or 7 series as their loyalty with the BMW brand builds. The naming architecture makes products easier to find, buy and ultimately to become advocates for.

Five signs of brand architecture problems…and opportunities!

1. Your products and services are confusing to customers and employees.
2. There’s no system for managing how new products and services are launched.
3. Sub-brands are not gaining enough leverage from the masterbrand.
4. Brand architecture doesn’t align with business strategy.
5. No clear system for integrating acquired brands into architecture.

Three common misconceptions of brand architecture

1. Brand architecture = reorganisation. Less than half of brand architecture work results in a business restructuring process. An internal business structure does not always need to mirror the customer-facing brand architecture.
2. Brand architecture is just a design exercise. Design and language is imperative to creating brand architecture, however it is driven by strategic objectives of a business to demonstrate its position and purpose in the market.
3. Brand architecture is only useful for B2C companies. In fact, B2B offerings largely benefit more from a brand architecture system.

How to (and why you should) define your brand architecture

Empathise and organise – Do you understand how your customer buys from you? Do your offerings align with your customers’ needs?

Distil – Remove anything unessential to the decision-making process of the customer. Brand architecture should deepen existing relationships, not add complexity to them.

Clarify – Use design and language to communicate those relationships clearly.

Using this process will help build a clear brand architecture for your customer, whether they are consciously aware of it or not.

The business benefits will be clear: identifying sales opportunities will be simpler; it’ll be easier to launch new products and services; you’ll increase the brand equity of your portfolio and improve the chances of success for any new launch.