A brand architecture is the way brands are organized to reflect the identity of a company’s product portfolio and operating business units. As companies expand, add new products and services, or enter new markets, the need for structuring their brand portfolio grows. In this article, the concept of brand architecture will be explained in detail, including some examples. Then, the topic will be further explored by four sections on the types of brand architecture, its purpose, its importance, and the challenges associated with it.
At its core, brand architecture is the structured relationship between a parent brand and any other related brands within the same organization. Simply put, it’s how a firm direct its strategic objective by creating a unique identity for each individual brand and the brand portfolio. This design is part of how the company portrays its image to the public, and helps drive recognition, attraction and engagement.
Brand architectures may consist of two main categories – branded house and house of brands. Branded houses are companies who link all products under a single parent brand. Apple, for example, is one of the most well-known branded house, because all its products and services (iPhone, Apple Watch, Mac, and iTunes) are associated with the Apple brand. On the other hand, a house of brands is a company that utilizes multiple distinct brands to represent different products, such as Unilever, and each brand serves as an independent entity.
The purpose of brand architecture is to ensure clarity, simplicity, and relevancy of the offerings. It helps to guide consistent communication across product categories and throughout the brand experience. It can also be used to leverage the opposite effect: complexity. As companies expand, they may have a combination of multiple branded and unbranded products, product niches, and even geographic regions.
Developing a proper brand architecture is essential for a company’s success. It can help to drive more sales, boost brand loyalty, and differentiate products from the competition. When customers can easily recognize the brand and gain confidence in its products and services, the result is a strong rooting of trust and affinity. Moreover, a well-developed brand architecture helps to create a unified presence in the marketplace and strengthens the corporate identity as a whole.
At the same time, creating an effective brand architecture does present a few challenges. The first challenge is finding the right balance between a unified presence and distinct differentiation. As the company expands its product portfolio, the different brands should remain distinct and recognizable without conflicting with one another. The second challenge is managing the brand relationships between the products. When a company has different products or services that are connected, finding the right amount of separation or association can be difficult.
Types of Brand Architecture
The two types of brand architectures, branded house and house of brands, are different yet both have the same goal in mind – to create an organized and effective concept of relaying their message. The choices will depend on a company’s decision to either differentiate each product or emphasize the parent brand. Moreover, there are four common types of branded house architectures that are used: first is the umbrella brand, which identifies the parent brand while its subcategories are represented by the brand logo; second is the individual brand, where the parent brand is mentioned in the product name while the product has its own distinct logo; third is the corporate brand, which discusses the products in terms of the corporate branding; and fourth is the hybrid brand, which combines the strategies of the umbrella and individual brands.
For house of brands, the brand relationships should communicate product differentiation, leverage the full potential of each product, and create an atmosphere of unified engagement. Through appropriate naming conventions, logo design, and a platform for broader marketing initiatives, these distinct brands can create synergy and an effective presence.
Purpose of Brand Architecture
The purpose of brand architecture is to develop a strategically organized structure for a company to effectively market and communicate their products to customers. The concept of brand architectures is to assign each product a unique identity and tie them together in a unified framework. It can help a company to communicate the purpose and personality of each product while maintaining a branded experience. By focusing on the intended users or audience, companies can identify the right levels of cohesiveness and development.
The primary goals of creating a brand architecture are to establish a clear understanding of each product, create brand awareness, and better target customers. Through careful consideration of the objectives of each product, companies can develop an identity that is both recognizable and compelling. This can then lead to increased sales, recognition and competitive advantage.
Importance of Brand Architecture
Brand architecture can be extremely beneficial to businesses of all sizes, as it provides a foundation for strategic marketing decisions. It can enable synergy between multiple brands, thereby enhancing the power of the set. This type of synergy can be especially powerful for larger companies with multiple brands, as it can provide a more unified marketing message. Moreover, it helps to organize the product portfolio in a way which is easier to communicate and understand.
For new companies, brand architecture can also be an effective way to build trust and loyalty with customers. A well-crafted portfolio of brands can create a stronger emotional connection and inspire customers to come back. For example, Apple has capitalized on their iconic brand, creating a strong and loyal fan base.
Furthermore, brand architecture can also establish an effective connection between the digital and physical worlds. Having a strong presence and association between the two, companies can leverage creativity and emotion to differentiate their brand from the competition, and create an engaging environment for customers.
Challenges Associated with Brand Architecture
The primary challenge of creating a successful brand architecture is finding the right balance between a unified presence and distinct differentiation between products. It is essential to maintain consistency and cohesion while ensuring each product has its own distinct identity. Companies need to ensure that each brand is recognizable and contain some similar elements, but at the same time not look or sound too similar.
In addition, companies face the challenge of managing the brand relationships between the products. As they expand, they have to make sure to find the right amount of separation or association between each product without becoming too confusing or losing brand relevancy. For example, Apple’s product lines have increasingly become more complex as they introduced different versions of the same product, such as the iPhone 5C, 5S and 6.
Lastly, one of the main challenges associated with brand architecture is the lack of resources and budget. It can be a daunting task for companies on a limited budget and resources, as the task requires a lot of resources and expertise. Additionally, the process of creating a successful brand architecture may involve testing different structures, which can be extremely time-consuming and costly.
Multiple Brands Strategy
The multiple brands strategy is a strategy where a parent company uses multiple brands to represent its products or services. It can be used to increase customer engagement and loyalty, and to strengthen the brand name. By using multiple brands, the company can focus on the target audience and create a more tailored message. In addition, this strategy allows companies to different offerings and create a more memorable platform.
The key to the multiple brands strategy is coordinating the different brands in a way that is effective and logical. Companies must ensure that each individual brand remains distinct and easily identifiable. Also, each brand should be integrated into one cohesive message that communicates the unique values and benefits of the items.
For example, Unilever has a portfolio of over 400 brands and manages them into four distinct global divisions – Beauty & Personal Care, Home Care, Foods, and Refreshment. Each division has its own set of products, and the company has managed to differentiate each division while maintaining one unified message.
Sub Brands Strategy
Another strategy that companies can use is a sub-brands strategy. This is when a company offers sub-brands or sub-categories of its parent brand, often by utilizing its logo or some other brand recognition element. The purpose of this strategy is to create distinct, yet recognizable brands that are still associated with the parent brand. This can help to increase customer trust, because they can recognize the parent brand, and also appeal to a wider demographic.
For example, Nike has used sub-brands to create distinct products for different target audiences. Nike has a main brand, and then each product category has its own unique sub-brand, such as Nike Air Max, NikeID and Nike+.
However, companies should be careful with this strategy, as it can easily become too confusing for customers. The key is to clearly differentiate the product with the parent brand, while still leveraging the parent brand whatever it can provide. Companies should create a unified message that still conveys the relevancy and purpose of the sub-brands.
Brand Extension Strategy
Finally, companies can use a brand extension strategy, where they create products that are related to the core product or service of the parent brand, but are not direct competitors to it. The primary purpose of this strategy is to leverage the existing brand equity and increase recognition, without the risk of creating a competitive situation. It can also provide an opportunity for companies to create an additional revenue stream.
For example, Amazon has used the brand extension strategy by introducing its own line of electronic products, such as the Kindle, Echo and Fire TV, which are all related to the core Amazon product. The products are easily recognizable and associated with the Amazon brand.
While brand extension can be a great way to increase product recognition and gain more customers, businesses should still be careful. It is important for companies to ensure that the new product is consistent with the core brand, and does not present any confusion for customers.
