What in the world is Brand Architecture?

Brand Architecture: Yet another confusing branding jargon? Not exactly!

The term architecture has many meanings. Apart from the most common meaning of the term, the Oxford Dictionary gives a number of other meanings for the term. The meaning that is useful for our purpose is "The complex or carefully designed structure of something"

Brand Architecture: The carefully designed structure for organizing the brands of a business

Creating the brand architecture involves developing a framework that highlights how products, services, and sub-brands within your identity connect with each other.

Brand architecture isn’t just for huge multinational corporations. Any business with multiple brands or sub-brands can use this concept to organize its brands strategically for the maximum impact. A brand architecture can help to give depth to your company and ensure that you organize your brands effectively to boost profits. 

Brand architecture helps you to:

Target specific customer segments: Breaking your architecture down into segments helps you to refine your services and messaging so that you can connect with a very specific group of customers. This ensures that your marketing efforts have the best possible return on investment.

Clarify naming, messaging, and positioning: Few things are more important to branding than consistency and clarity. Understanding how all your brand elements link together will help you to fine-tune the way you approach your clients.

Increase the flexibility of your organization: By establishing a powerful brand architecture, you set the stage to add new services and products to the mix as your brand grows. This means that your company becomes a modular entity that’s always expanding.

Ensure synergy between brands, products, and divisions: Even small brands can be complex entities. It’s not until the various components of your entity are understood and defined that they can work together efficiently towards your ultimate vision.

Improve awareness of your brands: When each division within your brand is clearly defined, customers can understand the unique value propositions of each of your brands and services, this can make it easier to convert leads into customers and may even improve your brand’s diversification.

Improve and build brand equity: Ultimately, the more your company grows with the right brand architecture models, the more your brand equity will develop.

Models of Brand Architecture

1. Monolithic Brand Architecture (Branded House)
2. Product Brand Architecture (House of Brands)
3. Endorsed Brand Architecture (Hybrid Model)

Monolithic Brand Architecture (Branded House)

A monolithic brand architecture or Branded House model offers perhaps the most logical path to new brands and brand extensions. 

This model involves a strong master brand (the parent identity), which constantly leverages its strength with sub-brands or brand divisions. For instance, imagine Google, and Google Maps, or Google Docs.

With a Branded House model architecture, companies build on pre-established customer loyalty and relationships to drive attention to new organizations. 

A Branded House model ensures that new creations established by the same company can be automatically accepted by the customer base because they share the same traits as other brands belonging to the company. 

Product Brand Architecture (House of Brands)

The product brand architecture, or “house of brands” model is characterized by a selection of highly-distinct, but familiar brands underneath a parent brand that the customer might not be aware of. For an example, how many of you know that Lacoste (French) branded perfumes are actually part of P&G product portfolio. P&G is a US company. Same way, L'Oreal is part of the Nestle cosmetics portfolio

Usually, the parent brand is responsible for investment only, and they don’t have any connection with the branding elements used to establish the sub-brands.

A good example of this type of brand architecture are “P&G” and "Nestle". If the Crest (toothpaste) brand had some kind of PR crisis, the other brands in the Procter & Gamble mix wouldn’t be affected at all.

The downside of a product brand is that you have no opportunity to build on the pre-existing loyalty established by a parent brand. However, on the plus side, product brands are far more versatile, as you’re not restricted by the expectations of the parent company either.

The Endorsed Brand Architecture (Hybrid Model)

The endorsed brand architecture makes use of a “master brand” but it’s far more flexible than the monolithic model (Branded House). In an endorsed brand architecture, each extension is given its own separate identity, and they can either be associated with the brand or not, depending on the context. Hence the use of the term "hybrid model".

Both the parent brand and any divisions within it are given their own unique market presence, with specifically-designed marketing strategies. 

Sony and PlayStation are good examples of a company and a sub-brand in the endorsed architecture. It’s clear to see that “PlayStation” is under Sony’s wing, but it’s also a brand, which continues to evolve regardless of how Sony might be doing as a master brand.

Endorsed brands often rely less on the master brand, though their background can give them better footing in an industry. Of course, endorsed brands are expected to live up to the customer expectations that were established by the parent brand.

Marriot and Sheraton is another example of this hybrid model in action. Sheraton has its own identity and some who stay in Sheraton might not even know that it belongs to Marriott master brand. 

What is best brand architecture for my company?

To decide which is most suitable, you have to ask yourself the following questions.

Who are the segments for each of your products and services? Are these segments closely related or diverse? 

Example: Frozen food and Packaged foods vs Food and Cosmetics

Do they interconnect and benefit from a connection to master brand? 

Example: The connection to Google is absolutely essential for Android's and YouTube's success - However, it is essential that Jaguar Land Rover shows very little connection to Tata Motors, even though Tata Motors are the owners of JLR.

Do you have sub-divisions with different price points and target markets? 

Example: Skoda, VW, Audi, Porsche, Lamborghini and Bentley are brands of Volkswagen Group but has their own unique identities and sold to highly distinct target markets at widely different price points.

Do you have a dominant segment?

Example: retail segment, travel and leisure segment, software and services segment or industrial segment, or do you plan to develop a range of products and brands for many unrelated segments?