Building a brand is a lot like building a house – you need the right foundations in order to be successful. Unfortunately, for many companies, fast growth, mergers, or simply a lack of foresight can lead to decision-making on the run, resulting in a messy portfolio of brands that may be confusing to customers or impact brand equity.
A clear brand architecture allows you to create a solid foundation for your business and brand strategy.
Brand architecture refers to the organisation of a company’s brands, products and services into a clear hierarchy. By creating structure, a company can clearly set out how its brands, products and services are organised, and how they relate to one another.
Types of Brand Architecture
This in turn can improve business focus, build brand awareness, and ultimately create a more successful suite of brands.
There are two main types of brand architecture. Many brands also adopt their own kind of “hybrid” model, using elements of each type of brand architecture.
The Branded House
In this type of brand architecture, the focus is on one main brand, with smaller associated products and services typically using the main brand name along with a subhead or description.
This kind of structure is useful for building brand awareness, as you can create visual consistency between service/product offerings to build on customer recognition and brand loyalty.
Consistency can help with brand recall, with studies finding that choosing a signature brand color can increase brand recognition by 80%.
Google is an example of a branded house architecture. You may log into Gmail, use Google Docs, and update your Google Calendar — all of which use the Google brand, despite being different products and services.
Virgin is another example, with the Virgin brand name associated with everything from radio, mobile plans, vacations and air travel.
The branded house strategy holds a number of benefits, including:
- Leverages brand equity, helping lesser known brands “borrow” brand power from better known brands
- Streamlines decision-making and potentially reduces marketing/advertising costs
- Potentially makes it easier to highlight new brands or roll out brand extensions quickly
Of course, there are some potential negatives to consider, including:
- Customers may lump all brands in together when there is a reputational issue
- Products may be ignored if the parent brand is underperforming
- Potential to create brand confusion where there are many product verticals
The House of Brands
This type of brand architecture is essentially the opposite of the branded house. In this structure, the parent brand matters little to customers, with the individual products and services taking the main stage.
Large companies such as Unilever and Proctor & Gamble are classic examples of house of brands architecture. In these examples, the parent brand is not necessarily of interest to customers, but the individual brands that dominate household goods categories (such as Pampers, Gillette) are well known.
The advantage is that this brand architecture allows for a company to launch a wide variety of products across different industries and price points. Other benefits include:
- Reach a diverse range of customers to increase profit margins
- Reduce the negative impact or connotations from different brands
- Potentially take more risks with new products and services
There are some potential disadvantages too, including:
- High cost in creating and nurturing a large assortment of brands
- Image confusion from ownership of brands perceived to have different quality and price points
Plenty of companies borrow from both schools of thought when it comes to brand architecture.
Alphabet, Google’s parent company, takes the best from both worlds, operating the Google suite of products as a branded house, while other brands such as Nest operate independently in a house of brands structure.
Drink brands such as Coca-Cola and Pepsi also use a hybrid brand architecture. Coca-Cola varieties (Diet Coke, Coke Zero etc.) follow the branded house approach, while other drink categories follow the house of brands structure, with their own identities and positions in the market (such as Powerade, Mt Franklin water).
Choosing Your Brand Architecture
Whether you are refreshing your brand, looking to organise an existing portfolio, or launching a business, it pays to think about your brand architecture.
Beyond your external image, your brand strategy will also affect your business internally, including how you budget and operate on a day-to-day basis. Factors such as brand equity, competition, costs, and impact on company culture should all be considered when choosing your brand architecture.
Working with a third party such as Viabrand can help you navigate these waters. Book a consultation with one of our marketing experts today to discuss which brand architecture may be best for your business.
If you’re curious about how to choose the right brand architecture that support the growth of your business, book a FREE 15 minute session https://calendly.com/viabrand/15min