Every firm needs brand architecture, just as every building has a foundation. You can arrange your products, create a brand identity, and build brand equity with its help. A well-designed brand architecture shapes the relationships between your brands and sub-brands and gives clarity about your goods and services.
There is no relationship between your brand’s identity, messaging, and services without this framework. Customers may become confused by this discrepancy, which also lowers the brand’s total value. Consider it as if you were going through a building with wildly disparate interior designs in each room.
This article will discuss several brand architectural models, present practical examples, and offer guidelines for selecting the ideal structure for your organization to make sure your brand architecture works for you.
What is Brand Architecture?
Brand architecture can be developed through systematized products, services, sub-brands, and brand structure. It consists of specific colors, nomenclature, or symbolism, which makes the brand portfolio easier to define.
The best brand architecture model is characterized by intuitiveness – each brand is different but at the same time as consistent with the others as possible.
The creation of various types of separate brands within one company is one of the most effective methods for diversifying distribution channels, communication styles, or specific marketing messages.
Intuitive brand architecture defines the place and roles of individual sub-brands which creates a synergy, for example in terms of clarity of messages, while being able to reach different markets. The sale and promotion processes of premium products differ from those that are used for cheaper goods, even if they were created by the same manufacturer.
Effective brand architecture is important in managing customer buying behavior, as it allows to shift of brand equity from one brand to another. If a customer trusts the master brand and its brand promise, they will be more likely to trust the sub-brands.
One technique you may use to both define the extent of the brand portfolio and mold clients’ cognitive processes is brand architecture. Smaller business owners mistakenly believe that brand architecture is only important for big, intricate organizations with several subbrands and a master brand.
However, arranging a brand’s offers can also increase the profits of smaller businesses. The following crucial business factors affect brand architecture for all businesses, regardless of size:
- Lower marketing costs
The better the brand hierarchy is structured, the more effective its marketing activities become. What is more, a clearly defined brand architecture creates room for cross-brand promotion, which can contribute to greater returns on marketing and brand management spending.
Keep in mind that in the context of brand architecture, co-branding can influence how brands are positioned and integrated within the overall structure.
- It helps in targeting the needs of specific customers
Organizing your offer is the most effective way to get the message of the endorsed brand across to your potential clients. It ensures that every member of your target audience reads a compelling brand story and finds what they are looking for.
- It accelerates development and increases investor and employee confidence
The intuitive architecture of the endorsed brand makes it much easier to create an extension of the master brand with new services or products. With proper management and focus on the development of endorsed brands, investors or employees gain more confidence that the company is going in the right direction.
- Defines the position of the master brand
Appropriately defined endorsed brand architecture has a wide impact on brand strategy and positioning. Improving this factor affects the effectiveness of the message and makes it easier to stand out from the competition – it fuels the sub-brand.
- Strengthens brand value
Each action of this type contributes to the company’s ultimate competitive advantage, i.e. brand equity. The greater the equity, the greater the profits as the existing brand’s authority in the industry increases with its market value. So there can be no doubt that having a brand architecture strategy is essential for business success.
- Builds customer awareness
In the absence of proper brand specificity, brands must rely primarily on the corporate brand to capture customers’ attention. With the right brand architecture, the brand gains the ability to differentiate the types of businesses by highlighting the strengths of each of the sub-brands.
Types of Brand Architecture
There are four primary brand architecture models that provide various brand portfolio concepts. You must choose carefully because every style of brand architecture has advantages and disadvantages.
The branded home, the house of brands, the approved brands, and the hybrid model are the four different forms of brand architecture that we can identify.
- Branded house
A branded house strategy is a type of brand architecture that consists of a strong main brand or umbrella brand and a collection of product or service brands – including the name of the main brand that completely manages its sub-brands.
Branded house architecture uses a branded house approach for customers, where audiences pay attention not so much to product features or benefits, but to the main brand promises of liked and endorsed brands.
The branded house model has many advantages. First of all, the master brand and sub-brands have a uniform positioning strategy and visual identification, which makes branding and marketing activities more profitable. A branded house is the least demanding type in terms of short-term investment and causes the least disruption.
The customers are less confused thanks to visual consistency and clarity, while awareness and visibility of sub-brands increase the value and exposure of the master brand. In turn, parent brand quality and trust are automatically extended to sub-brands.
Unfortunately, the branded house type has a downside. The biggest one is the risk related to how closely the main brand is linked to the sub-brands. This means that complications with a single brand strategy can affect the rest, including the parent brand.
Read Also: How to Name Your Brand
In addition, if the brand is presented too extensively in a large number of categories, products, or services, its impact may be perceived as chaotic and difficult to define. Unfortunately, a branded house is not very flexible, which means that an underperforming brand can jeopardize the entire system.
- House of brands
House of brands architecture consists of independent brands that are characterized by individuality – they are under the parent brand or umbrella brand, which customers may not even have heard of or know very little about. The parent company is important only from the investors’ perspective.
In a house of brands system, brand extensions support each other as they develop, and the master brand realizes the benefits that come with it. House of brands products sometimes have a master brand identity on their packaging, in the form of a small logo or address.
Some brands choose not to publicize the relationship between the master brand and sub-brands, due to specific pricing strategies, quality, or target audience.
A house of brands gives you the freedom to create a unique brand identity, positioning, or experience. It also gives you the ability to precisely target different market segments while any negative impact of one brand does not affect the others.
The house of brands also allows for easier differentiation of the business with additional brands, without fear of not fitting into the whole system.
However, there are some serious drawbacks to this solution. First of all, each brand requires its own, separate strategy, website, and marketing, the cost of which can be significant. None of them can have the same brand identity as others. It also limits the possibility of brand cross-promotion.
The success of one brand does not carry over to another. Customers can also get confused about whether the master brand or a sub-brand best represents the company. The last major disadvantage is the legal complexities and costs associated with servicing several corporate brands.
- Endorsed brand model
The endorsed brand model refers to the relation a master brand or umbrella brand has with the related brands. All the brands have their own unique market presence. The goal is to create sub-brands that have their own identity, which they are using for individual business activities under the parent brand – while being a part of the same brand portfolio.
You can easily spot where this strategy was implemented, for example, by phrases such as: “Delivered by…”. In this brand architecture model, brands benefit from an affiliation with an endorsing brand. The relationships between all the brands in this architecture are often based on mutual profits as each brand benefits from the strength of the other.
This type of endorsed brand architecture approach balances the master brand’s equity of the house of brands and the collective branded house equity. It offers the best of both worlds.
The master brand is associated with sub-brands, but its name is often not visible, which reduces the risk of linking it to their failures. Thanks to this type of architecture, you can also freely create positioning, experiences, or your own identity. You can also precisely target brands’ activities to specific market segments, but with the existence of cross-promotion. Another advantage is the boost to the prestige and credibility of the main and supported brands.
The disadvantages of this type, however, are similar to the disadvantages of a branded house. Each brand requires its own distinct strategy, brand identity, and marketing, which can make the costs pile up. Also, problems experienced by one brand can affect all of them.
- Hybrid brand architecture
Hybrid brand architecture is a combination of all of the above systems. In the case of an acquisition or merger, this model is the best solution when the existing brand equity of the acquired brand is to be preserved. However, this model is very often characterized by a complicated property structure.
The advantage of hybrid architecture is certainly the flexibility of many layers of hierarchy.
This allows you to harmonize different levels of market-oriented brands and sub-brands. Like the house of brands, it gives you the freedom to create brand positioning, experience, and identity necessary to target specific market segments.
It makes diversification easier with the addition of new sub-brands, which can retain their market value.
However, hybrid brands may turn out to be founded ad-hoc, if individual solutions are not applied wisely and with a clearly defined goal. The inevitable complexity can cause confusion among customers. Still, each hybrid brand needs individualized marketing activities, related to branding or brand identities, and the cost of these activities can be significant.
How to Develop Brand Architecture
One of the first things a business should do when developing a brand is define its brand architecture, as this establishes the framework for a well-thought-out and logical branding strategy. With dozens of sub-brands, brand architecture can get complicated, but with the correct framework, each brand can stay faithful to its own personality.
Three steps are involved in developing a brand architecture for your company: application, strategy, and research.
- 1. Research
Strong brands don’t simply choose a model and run with it. Conducting research is an essential step to developing brand architecture because it gives you the information you need to organize offerings in a way that makes sense for your company, customers, and industry.
The more data, the better. But gathering the following information will provide the insights you need to get started.
- Brand audit – Brand loyalty, brand awareness, brand perception, brand equity, brand assets, and brand portfolio
- Market research – Buyer personas, market segmentation, product/service use, pricing, customer satisfaction, and competitive analysis
Before you make any decision, it’s wise to review your company’s mission, vision, and values to ensure the brand architecture aligns with business goals.
- 2. Strategy
With data in hand, it’s time to design the brand architecture. If you’re revamping an old architecture, this step may require tough decisions on whether to get rid of or sell brands that don’t fit into your desired architecture. If you’re starting from scratch, you have to decide how closely you want your current (or future) sub-brands to be connected to the master brand.
You can test out each architecture by seeing what the brand would look like in each approach and creating a list of pros and cons. Maybe the branded house model won’t work because you have several distinct brands that can’t be grouped under the parent brand.
When you find a structure that may work, outline the connections between the master brands, sub-brands, and products or services. You need to know how everything works together because defining distinct brands, designing cross-promotions, or marketing to customers.
Along the way, make sure to consider your available resources (employees, budget, time). Certain approaches take more work than others, so you want to choose a brand architecture that fits your current capacity as well as your future vision.
- 3. Application
Choosing a brand architecture is just the start of creating a lasting brand that people love. But for the sake of this article, the last step is to share the finalized structure with your team.
Since brand architecture is part of your brand identity, you can unveil it alongside your overarching brand positioning strategy. Make sure to include a clear structure that highlights the relationships between the master brand, sub-brands, and offerings, in addition to any connections between sub-brands. Everyone on the team should know the strategic role of every brand within the architecture framework and how it relates to customers.
As your company grows, your brand architecture must change to include any new offerings or brands — whether it’s the result of a new product launch or an acquisition.
By taking time to conduct brand research, develop a brand architecture strategy, and share it with your team, you’re setting your entire organization up to make efficient branding decisions that have a long-term effect on brand equity.
Company’s Brand Architecture Examples
Finally, it is time to present a few examples of brand architecture examples. Let’s take a look at this list of five global giants.
- 1. FedEx
FedEx is an example of branded house architecture. This strategy is based on one strong brand that drives purchases and provides value. FedEx is a parent company, while the following are its sub-brands: FedEx Office, FedEx Ground, FedEx Freight, and FedEx Travel Network.
Each of them maintains a very close relationship with the parent brand while having a strong identity and the same differentiators. Despite that, most people associate FedEx with an ordinary courier company.
- 2. Unilever
Unilever uses the House of Brands architecture. It has over four hundred brands whose product lines include personal care products, cleaning products, food, and beverages. Their products are used by over 2 billion people around the world.
This parent brand owns many endorsed brands that are far more famous than the company itself. Those brands include Lipton, Axe, Dove, Knorr, Rexona, Magnum Ice Cream, Hellman’s, and many others.
- 3. Procter & Gamble
Procter & Gamble is the parent company of home products, owning mostly endorsed brands from the cosmetics industry. It is also known as a sponsor of many sporting events.
This is another example of the house of brands architecture model.
There are multiple brands under this master brand, such as Gillette, Old Spice, Tide, Braun, as well as endorsed brands such as Oral-B, Head&Shoulders, and many other well-known brands.
- 4. Nestle
Nestle is one of the endorsed brands associated mainly with cereals and sweets. Nestle uses the house of brands model, but also the endorsed brand’s architecture. It promotes many of its brands but also has a portfolio of brands that are standalone giants.
However, Nestle controls other brands as well – from cocoa and coffee to tea markets.
This master brand owns, for example, Corn Flakes, Nesquik, Cheerios, and other cereal brands, chocolate bar producers like Princessa, KitKat, and Milkybar, coffee giants like Nescafe, Nespresso coffee, and the bottled tea brand Nestea.
Products from all those brands carry Nestle’s logo.
- 5. Google
Associated mainly with the largest Internet search engine or email, Google is an example of a hybrid brand. It is a widely endorsed brand, with tons of tools and software as well as services for both ordinary people and businesses.
In addition to Google Search, there is the payment method Google Pay, the Google Play mobile application store, and Gmail, but there is also YouTube, Android, Google Docs, Google Analytics, Search Console, and many other famous brands, without which we could no longer function.
In addition, it has advertising services, both Ads, which allows companies and individuals to advertise, and AdSense, which enables you to earn money on ads.
When Should You Switch to a Different Brand Architecture?
Customers will define your brand architecture for you if you haven’t done it yet or haven’t done it correctly, which can frequently lead to problems and low sales.
However, how can one determine whether a business needs a rebranding strategy? Listed below are a number of distinct indicators:
- 1. You have acquired a new brand
In the case of acquiring a new brand or planning to do so, it is worth making sure that the combination of its products or services will be properly implemented and then used. Therefore, it is worth analyzing the brand architecture and making the required changes.
- 2. Your offer is complicated
Customers, not being aware of or not understanding your offer, can form false beliefs. Only a well-defined brand architecture can help change this. So if you spot misconceptions about your offer across different communication channels, it is a sign that you need to think about changing your brand architecture.
- 3. You want to create a new offer
When launching a new product or service, you need to connect it with existing ones and master brands. The right brand architecture gives you clarity about how this will impact the value of both new and other brands in your business. A branding strategy service can help ensure a cohesive visual representation that aligns with your brand strategy.
- 4. One of your offers does not perform well
A change in brand architecture can also be useful when one sub-brand does significantly worse than the others. It will make customers notice it and increase its visibility on the market.
- 5. You want to enter the market with a parent brand
If you are getting ready to enter the market and want to ensure that the evaluation of your brand will be high, a clear brand architecture will send a message to investors that will visibly show that you have built a good brand and are adding value to it.
The hierarchy of a specific company’s brands, including its master brand, subbrands, goods, services, etc., is known as its brand architecture. The most crucial thing to keep in mind is that big, sophisticated businesses are not the only ones that should care about it.
It is also crucial for smaller companies since it guarantees order, which improves stakeholders’ or customers’ comprehension of the offer.
With the information above, you can select the finest brand architecture models for your company and confidently build the ideal brand architecture plan. Develop a strong brand strategy to achieve success!