Lesson #2: The Importance of Brand Architecture

THE IMPORTANCE OF BRAND ARCHITECTURE

“Be scrappy! Be agile! Be nimble! Do more with less!” are some of the common mandates marketing teams must respond to daily.  One can be scrappy, agile AND disciplined.    This concept is what Jim Collins refers to as “Genius of AND” in his book Good to Great.  Creating a culture of discipline, with a focus on establishing strong brand and marketing foundations, is critical to the success of companies.  In my experience, a strong brand and marketing foundation should start with a well-thought-out Brand Architecture. 

What is Brand Architecture?

Brand architecture (or brand hierarchy) is a roadmap for companies to organize their brands, products, and services.  The primary purpose of a brand architecture is to let customers understand how to interact with your company’s products, brands, services and what they can expect from your company.  There are multiple brand architecture frameworks to select from. Selecting the best framework should be dependent on multiple factors like, market positioning, brand/product portfolio, number of customers segments served, resources available, and long-term vision.

Brand Architecture Frameworks

1. House of Brands – A collection of brands owned by the same company.  The individual brands have separate identities and run as individual businesses.  Common examples include Procter & Gamble, Unilever, and Yum! Brands.

2. Branded House – One primary/master brand with many product lines that share a common identity and set of values.  The corporate brand is the prominent brand, and it is carried through all product lines.  Some examples include Nike & FedEx.

3. Endorsed Brands – A collection of brands that have their own individual identity, are managed individually, AND visibly endorsed by the parent brand.  Here the sub-brand has stronger weight than the master brand. This framework also requires building equity in the master brand. Examples of Endorsed Brands architecture include Kellogg’s, Marriott, and General Electric.

4. Sub-Brands – A collection of brands, products, or services that share common values and visual identity with the master brand.  In this framework, the master brand carries more prominence and is the primary driver.  Examples of Sub-Brands include Adobe and Amazon. 

5.  Hybrid – A hybrid approach allows businesses to combine elements from the different brand architecture frameworks, providing flexibility to meet the business’s unique needs. Examples of companies using a hybrid approach include Microsoft, Walt Disney Company, and Coca-Cola.

Common Challenges Observed

In my experience, as companies sprint to get their products to market and drive revenue, many often ignore the role of a brand architecture, and therefore fail to invest the time into thinking through critical strategic questions.  Here are a few examples of the key questions often ignored: Do we want to invest in building a brand?  Will we be a house of brands? Or will we be a branded house? Which is the primary brand we want to build equity in? What do we want customers to buy from us? Answering these key questions are critical to the commercial success of companies.  The answers to these questions should help guide investment decisions beyond the brand and marketing functions. 

When companies skip through the strategic questions and don’t create a roadmap to guide their future decisions, many costly mistakes are made.  Confusion, inconsistent messaging, overshadowing the master brand with sub-brands or products, and investing in the incorrect products, driving up marketing expenses, are examples of mistakes that could be avoided.   A well-designed brand architecture will help avoid customer confusion, overshadowing the master brand, unnecessary spending, and lack of strategic rationale.

What are the Benefits of Creating a Brand Architecture?

1. Clarity - A well-designed brand architecture tells customers how to interact with you and the relationship between your products and services.  Offering clarity makes it easier for customers to understand your company’s offerings and navigate those offerings.

2. Consistency – a well-thought-out architecture helps create consistency in brand positioning, messaging and offerings.  Consistency is incredibly important in building trust and equity.

3. Recognition – According to an article from Brandfolder.com by Chelsea D’Angelo, brands that are consistently presented are 3.5 times more visible than brands without a clear hierarchy.

4. New Products and Extensions – a well-designed brand architecture helps leaders see where the new products and potential line extensions fit within the company’s portfolio of brands, products, and services.   It helps facilitate ongoing brand growth. 

5. Reduced Marketing Expenses – A brand architecture should help guide investment decisions and facilitate strategic investments.  By being able to see where each product, sub-product, or brand fits, decision-makers should be able to spot where the marketing investments should be made, driving efficiency and increased ROI.

To continue building and growing, companies should make sure that they are building on a solid foundation. If you would like help in creating or auditing your brand architecture, let’s connect. Establishing a brand architecture is an important investment in the future of your business, it doesn’t matter if you are marketing to HCPs or consumers or both. 

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