Brand Architecture: What Suits Your Brand?
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The development of a strong brand architecture is not just a question of structure but a strategic tool that can significantly contribute to a company’s success. Whether it's an emerging start-up or an established corporation, understanding and properly implementing a strategic brand architecture is crucial for business success. In this article, we dive deeper into the topic of brand architecture and explain how it can serve as a decisive success factor for companies.
Brand architecture is more than just a buzzword; it forms the structural foundation upon which strong, differentiated, and trustworthy brands are built. Comparable to an architect’s blueprint, brand architecture governs the perception and relationship of brands within a company. It describes the systematic arrangement of brands, products, and services and defines how they interact and relate to one another.
A strategically developed brand architecture is a key factor in a company’s long-term success. It brings numerous advantages that go far beyond the mere organization of brands:
The “House of Brands” or individual brand strategy takes an approach where a separate brand is developed for each product or product line. This strategy allows each brand to have a specific identity and a clear brand promise, enabling the company to target different audiences.
A prime example of this approach is Unilever, which operates numerous independent brands such as Dove, Axe, and Knorr. Each of these brands operates independently, with its own positioning and target group.
Tailored brands for specific target groups: Each brand can be precisely tailored to the needs and desires of a specific customer group.
Risk distribution: Negative experiences with one brand do not or only minimally affect the other brands in the company.
Market dominance: A company can be present in the same product category with multiple brands, increasing its market share.
Higher marketing costs: Each brand requires its own marketing budget and resources.
Consistency challenges: It can be difficult to convey a consistent corporate philosophy across all brands.
Lower economies of scale: Each brand must build recognition and loyalty on its own.
The Branded House or umbrella brand strategy connects the corporate brand with the individual sub-brands. In this model, the umbrella brand takes center stage and is communicated uniformly across the entire product and service portfolio.
Companies like Apple or NIVEA use this strategy successfully by bundling their various offerings – from products to services – under one strong, central brand. Each sub-brand may have a slightly distinct character through naming, secondary colors, or other visual differentiators, without losing the essential features of the umbrella brand.
Strong, unified brand image: All products benefit from the strength and reputation of the main brand.
Cost savings: Marketing efforts are focused on a single brand, leading to efficiency improvements.
In the “Endorsed Brand Strategy,” individual brands retain their own identity but are supported by a parent brand that serves as a guarantee of quality and trust.
A typical example of this is Marriott. Brands like Courtyard or Ritz-Carlton retain their own identity but are strengthened by the “by Marriott” endorsement.
Benefit from the parent brand’s reputation: The sub-brands benefit from the credibility and trust of the parent brand.
Flexibility: It offers a good compromise between brand variety and a unified appearance.
Communication complexity: Finding the right balance between the identity of the individual brand and the parent brand can be challenging.
Potential customer confusion: Too many sub-brands can make it difficult for customers to keep track.
In reality, the boundaries between the different brand architecture models are often fluid. Many companies choose a flexible approach that combines elements of various strategies. This allows them to find a tailored solution best suited to their specific needs and market conditions.
An example of a hybrid model is the technology company Samsung. While most products are marketed under the strong Samsung brand (Branded House), the company also owns independent brands such as Harman (a subsidiary for audio systems) in its portfolio (House of Brands). This flexibility allows companies to meet both global and regional market needs.
Choosing the right brand architecture is a strategic decision that must be carefully considered, as it should support the company’s long-term goals and overall strategy. For example, if the company plans to expand into new markets or is considering acquisitions, the brand architecture should be flexible enough to support these developments.
Thus, there are various selection criteria that must be individually considered for each company:
A well-thought-out and strategically aligned brand architecture forms the foundation for long-term business success. It allows for efficient management of the brand portfolio, creates consistent customer perceptions, and offers flexibility for future challenges. With the right architecture, companies can not only leverage synergies but also succeed sustainably in a dynamic market environment.