Brand Strategy

Problem: How companies create brand strategy?

Learning objectives
1. What are different brand architecture strategies?
2. When and why to use different brand architecture models? Theory
3. Practical examples, no Pepsi or Red Cross.

1. What are different brand architecture strategies?

Brand architecture is defined as the logical, strategic and relational structure for all brands in the portfolio. A key concept of brand architecture strategy is that customers relate to brands at different levels — for example, a corporate (or master brand), endorsed brands, house of brands and branded house. This allows an organization to create a brand portfolio that appeals to distinct segments or needs states. (EquiBrand, 2015)

Master Brand (branded house)
A branded house refers to a company that uses a branding strategy in which the brand is equivalent to the company itself. 

For example: a company such as Virgin. The company is diversified into everything from music to mobile, but all of its brands are under the Virgin name: Virgin Mobile, Virgin Air, Virgin Records etc. This brand architecture strategy is also known as a logo-linked brand or master brand – the name and branding is consistent across all segments of the company. (Stuart)

House of Brands

A house of brands refers to a branding strategy in which a parent company is home to multiple distinct brands. In a house of brands, the individual brands are more widely recognized than the overarching brand. With a house of brands, while consumers may recognize the name of the company, the various sub-brands generally are better known. Each individual brand has its own unique identity, while the brand identity of the parent company is virtually invisible to the consumer. (Zideate)

Endorsed Brand
Brands are combined in such a way that one is designed to work in concert with the other.

Hybrid

Is a mix of architecture types. One main brand with themes and elements that carry throughout the branding for several sub brands. For example, Marriott has brands like Courtyard and Fairfield Inn under its main brand, and the Marriott branding appears (in a minimal way) on the logos etc. for most of the sub brands.

Branded house vs. House of brands

2. When and why to use different brand architecture models?

A number of factors need to be considered in developing and evaluating alternatives. There is no one-size-fits all solution or magic formula for defining the appropriate brand architecture or brand portfolio structure. Brand architecture recommendations should be informed by the following three question areas: Financial resources – how many brands can the organization afford to support?

Customer “bandwidth” – how many brands can customers understand?

Strategic decisions – do special circumstances (partnerships, etc.) dictate tighter or looser brand linkages? (EquiBrand Consulting)

Smaller organizations that are still focusing on gaining market share need to choose the architecture that will help them grow the fastest. If a smaller company has a product or service that they would like to introduce into their existing structure, it is usually a good idea to create a sub-category of their existing brand rather that creating a new brand for that product or service. This makes a “Branded House” architecture an excellent choice. (In the image, 2015)


8 steps of creating the right brand architecture:
1. know your audience
2. be clear about your business vision
3. evaluate the equity in your existing brands
4. Assess the value of co-branded relationships
5. Determine the available marketing budget
6. understand legal or tax implications
7. develop a plan and timeline to introduce your brand architecture
8. create a decision tree to maintain your brand architecture (Grace, 2016)

  Branded house

· More efficient to communicate and manage; enables a more cost-effective means of announcing      new companies and product launches

· Streamlines decision-making for company structure and growth
· Any new addition to the company portfolio automatically gains a level of acceptance and  importance because of the public’s previous identification with the parent brand
· Simplifies messaging to employees, customers, analysts, agents, and distributors
· Better aligns organization internally and externally
· A combined entity is perceived to have more staying power, suggests strength, and is just easier to  remember and recognize
· Customers buy products and services more on attributes of company, rather than just relying on  product attributes
· Strong corporate brands have been proven to better preempt competition/defend market share, and  to also improve loyalty indicators (there are brand studies that show investing in a corporate brand  can improve shareholder value)

House of brands

· Each brand is free to fight its battles on its own terms, unfettered by the meaning of the parent brand
· Can leverage equity (but only if there has been some investment in building it previously)
· Can impact customer retention (again, only if investment in brand exists)
· Reseller/agents may prefer this approach so that they can sell their own brand label
· May shield the corporate name in the event of problems or negative news and divestiture issues

3. Practical examples

example Branded House

example Endorsed Brand

example House of brands

Key words

Brand architecture, Brand strategies, Brand management, Collaboration, Brand guidelines

Sources

Aaker, D. A., Joachimsthaler, E., & Simon & Schuster. 2002. Brand leadership. London: Simon & Schuster.

Equibrand Consulting. 2015. Brand Architecture Strategy. URL: http://equibrandconsulting.com/services/brand-consultant/brand-architecture/strategy. Accessed: 02 March 2016.

Grace, J. K. 2016. 8 Key Steps to Creating the Optimal Brand Architecture. URL: http://www.brand-taxi.com/optimal-brand-architecture/. Accessed 03 March 2016.

In the image. 2015. Branded House vs. house of brands vs. house blend. URL: intheimage.com/blog/branding/branded-house-vs-house-of-brands-vs-house-blend. Accessed: 02 March 2016.

Stuart, E. 2016. Building Brand Value: With Brand Architecture Strategy. URL: https://vtldesign.com/brand-development/building-brand-value-why-you-need-a-brand-architecture-strategy/. Accessed 02 March 2016.

Wegman, J. 2011. Should You Be a Branded House, or a House of Brands? URL: http://www.martinoflynn.com/blog/2011/04/28/should-you-be-a-branded-house-or-a-house-of-brands/. Accessed 03 March 2016.

Zideate. (2016). House of Brands. Retrieved from https://www.zideate.com/definition/35/house-of-brands