What is brand architecture?
Brand Architecture is the system that organizes brands, products, and services to help an audience access and relate to a brand.It is the way in which the brands in the company portfolio are related to or differentiated from one another. The architecture must define the hierarchies within an organization: how the corporate brand works in synergy with the sub-brands; how they support one another; how the sub-brands strengthen the strategic objectives of the corporate brand
This is an important guide for brand extensions, sub-brands, and development of new products. It also provides a roadmap for Brand Identity development and design and reminds consumers of the value proposition. It also provides the maximum brand value by fully leveraging both corporate and sub-brands
Types of Brand Architecture:
There are three most common types of Brand Architecture:
A Branded House is where the company brand becomes the dominant source of identification and meaning. ING Group is an excellent example of this approach. They offer banking services known as ING Direct. They have individual product brands for the range of finance and everyday banking such as ING Orange Every day, ING Business Optimiser, ING Living Super and ING home loans. In this example, ING is the sole brand, and the product names serve as descriptors. Another example of a Branded House is Virgin. They have extremely diverse businesses: trains, airlines, credit cards, a music company, a health, wedding dresses, and fitness change, and so on. All these companies draw their inspiration from a single brand identity: Virgin. There is a lack of brand independence at the product level, but the energy of the parent brand strengthens each company despite the lack of shared product commonality.
2.House of Brands
Most consumer product brands use this strategy. That is, the product itself becomes the primary brand rather than the company. Take for example the following products: Pantene, Duracell. Most consumers would have trouble identifying them with companies that actually own them (Procter and Gamble, Nestle). In a House of Brands model, individual companies can focus on what they each do best without worrying about the broader group’s businesses growth trajectory. Hence this offers a lot of flexibility.
Another example is General Motors. They make cars under a few brands: Holden, Chevrolet, Opel etc., each of which is strong brands in themselves.
The risk here is brand confusion. Brands that try to cast too wide a net risk ending up without loyal customers in any market or demographic. Another risk is the lack of budget .This Model needs investment in building many brands, instead of being able to consolidate investment behind one master brand.
- A Hybrid Model
Many companies and brands use a mix of strategies with different roles for different types of brand extensions.
Consider, for example, Westpac. Westpac has a number of brands. These fit neither the house of brands or branded house model. The endorsed brand model is used where the brands are newer and require the support of the more established parent brand, e.g, Xylo. This allows the brands to seem more credible, while the parent brand remains distant enough to reduce the risk. In Case of The Westpac Institutional Bank, there is a sub-brand approach because there is equal equity between the two products or brands. This helps the sub-brand to retain its own specialty within its section of the market, while also demonstrating the parent brands’ breadth of expertise.
Brand architecture strategy
Brand architecture is key to your entire brand strategy . Your brand architecture sets the groundwork for all the brand components and aligns your brand personality, your brand promise, your brand story and your visual and operational requirements into a single unified structure. Brand architecture should uncover the specific emotions around which you have built your brand.
5 Steps to Brand Architecture Strategy:
1.List each of your product/service features. List the benefits of each.
A feature is basically of what something does or what it is. For example, features of a car may include a UBS and an upgraded stereo system.Benefit is the result that that is derived from the feature
2.Now List down the benefits. For each benefit, determine whether it’s functional or emotional.
A functional benefit is something that is derived from the functionality of the feature. Example: A high-Quality stereo provides higher-quality sound.
An emotional benefit is the feeling that is being evoked by functional feature. Example: The high-Quality stereo might make the user feel like a rock star.
3.Review each feature & benefit & and determine its importance level to the market. Every benefit should be assigned between below three categories.
Basic & Expected: These are very basic ones; buying of the product won’t happen without these features or benefits. Every product/service in this category needs to offer these features.
Adds value: These add differentiation to the product from that of competition. This is not a basic feature. This is not expected feature, but most customers probably won’t purchase based on this factor alone.
Will buy: This is most critical & will result in customer buying the product
4.Now, features and benefits need to be ranked.
Emotional benefits results in buying & popular brands are built on emotions.
Use this ranking system:
Basic expected Feature = 1
Features that add value = 2
Features that will buy = 3
Functional benefits that are expected = 4
Functional benefits that add value = 5
Functional benefits that will buy = 6
Emotional benefits that are expected = 7
Emotional benefits that add value = 8
Emotional benefits that will buy = 9
Few brand architectures are built around features, but by including them in the rankings, we will focus on benefits and, more specifically, emotional benefits that cause people to desire your offering on a visceral level.
5.The final thing that needs to be done is to identify the emotional benefits that will become the core of your brand strategy.
We will focus on those which have got a ranking of 6 or higher to be included in brand architecture. We will need to include a few functional benefits with the emotional benefits.
Steps to Design Brand Architecture:
- Understand your primary audiences.
Do you have a national or global audience? What does each need to be communicated for the audience to positively engage with your organization? For example:
- Consumers need to appreciate the depth and breadth of your company’s offerings so they are more likely to increase their relationship
- Employees need to appreciate your organization better, to be more productive, become promoters and socialize its value within their professional or social communities
- The financial community needs to recognize the value of your organization to give it the proper attention and valuation
- Business partners need to better grasp the breadth of what your company does so they can bring added value and opportunities to you
- Media need gets a good perception of your company to communicate favorably amongst their audiences.
- Have a clear business vision.
Have a strong business rationale is needed to have Successful architecture. First, we need to figure out the long-term vision of the company (e.g., acquisition, organic growth, sale or IPO). Will the company might increase its product lines or geographic coverage.
- Study the equity of your existing product/service brands.
Brand Architecture demonstrates how your corporate brand and sub-brands relate to and support each other. Determine whether a brand in your portfolio will benefit or harm the corporate brand. If you have a strong sub-brand, it can even become an umbrella brand for a whole family of product extensions.
- Assess the value of co-branded relationships.
Co-branding offers brand exposure in a product class that would be hard to enter on its own and can provide additional brand equity to support a business. It can also have long-term downsides, such as audience confusion from conflicting brand messages or damage to both brands if one has a problem. Consider very carefully whether two or more brands should be used to support a product,service or venture or whether there would be any benefit to endorsing one or more of your brands with another brand.
- Determine what scale of the marketing budget is available.
A Masterbrand Architecture is the best cost-efficient arrangement from a marketing investment perspective because every marketing dollar spent gives benefit to all of the brands. A Portfolio Brand Architecture is most expensive architecture because here each individual brand needs investment. Therefore, when developing a Brand Architecture, it is essential to know the resource requirements to support your brands.
- Understand legal or tax implications.
Certain brand architectures may have some legal or tax implications. For example, use of a brand owned by a different company or legal entity within the parent organization will often require inter-company license agreements. Furthermore, in an international context, a group that wants to use a brand may need to license it in different tax jurisdictions. Co-branding strategy is more likely to call for an allocation of licensing costs across companies.
- Make a plan and timeline to announce your Brand Architecture.
Once the best Brand Architecture for your company is determined, it is imperative to develop a visual system to introduce and support it. For example, if you are executing a master brand structure, then it will be necessary to adapt visual branding to pull everything together. On the other hand, if you decide that having separate sub-brands, you will need an identity system to support that architecture. Importantly, if you plan to evolve from one architecture to another, there are various “migration strategies” to consider that can enable this process without being too detrimental brand equity along the way.
- Create a Brand Architecture decision tree.
Once you have put your Brand Architecture in place, the best tools you have is a decision tree that will answer all specific questions leading to recommendations & will be consistent with the company’s overall brand strategy. A formal brand architecture decision tree will help you confront future decisions you may face when confronted with branding issues resulting due to acquisitions, internal product/brand development, internal readjustment, etc.