This week, on two separate occasions, I’ve held workshops with clients to discuss and define their brand architecture. One client has two distinctive sides of the business (B2B and B2C) and the other has multiple, quite different service offerings, sold under one brand.
So, what is brand architecture? What are the different types? Why is it important and do I need to think about it for my small business? Read on to find out…
What is brand architecture?
Your brand architecture is how you structure your portfolio of brands, sub-brands, products, or services. If you have multiple brands and/or products or services, you need to consider what is the most effective way to structure them for your business, and how you then go on to communicate that to your customer, to maximise the benefits of that structure.
It helps your customers to understand your full range. It gives structure to your business by organising everything under one brand. That one brand, often being referred to as the master brand, parent brand or umbrella company.
These terms may sound straight out of a big corporate company playbook but if you have more than one product, more than one service or more than one brand you need to think about your brand architecture, regardless of the size of your business.
Why is brand architecture important?
- Clarity – Brand architecture helps people to understand your business in the way that you want them to.
- Increased revenue – A well-constructed framework of brands will allow them to feed off each other with effective cross selling and up selling.
- Increased brand awareness – Each brand in your structure can positively promote the others, increasing your overall brand awareness.
- Manage risk – If you want to diversify and try something different putting it under a different brand name protects your core offering from any risk associated with trying something new.
Or in the words of Aristotle “The whole is greater than the sum of its parts”
Types of brand architecture?
There are three different types of brand architecture structures, a business can follow:
A Branded House:
Where you have one clear master brand with different products or services under it, that all feature the master brand name.
An example of this is Apple. Apple is the master brand and under the master brand follows the Apple Watch, Apple iPhone, Apple iMac and so on.
Advantages of this structure are that all the brands are working together to boost the overall value, equity and awareness of the master brand. It is easy for people to understand and recognise each product as being part of the same company.
It is also a very cost-effective way to manage a brand as you only have one brand strategy and design to work to.
There are some down sides to this structure. This model is very inflexible as you have to stick to the master brand guidelines consistently. There is also the risk to the whole portfolio, if one brand or product receives any negative press, feedback or reviews it can impact the whole business reputation not just that one brand or product.
House of brands:
This is where the master brand is different in name, style and design to all other brands within its portfolio. In this instance the master brand is only really needed for administrative
and investment purposes. Good examples of companies using the house of brands structure are P&G, Unilever and Johnson’s.
A house of brands structure is great if you need flexibility and have diversity between the products and brands that you have.
This means you can appeal to each specific audience, offer different pricing structures, and take risks in certain areas without having an overall impact on the brand awareness or reputation of the master brand, and it could be confusing for customers.
Hybrid:
A Hybrid brand structure is a mixture of a house of brands and a branded house. Where the master brand is used as both the overall company name but also features as a sub-brand. Coca-Cola, Microsoft and Amazon all use this structure successfully. Companies who have a hybrid structure tend to end up this way due to mergers and acquisitions rather than having specifically planned it this way and it can be quite confusing for customers.
I see many small business owners who have grown their business over the last few years by expanding their service or product offerings, who can often find themselves in a confusing hybrid scenario. Now, that’s not to say the hybrid model is not right for you, but make sure it is a conscious decision for your business and you’re reaping the rewards of a business with a well thought through brand architecture.
Your brand architecture should help you to:
- Reduce your marketing costs
- Clarify market positioning and messaging
- Increase customer awareness
- Target the needs of specific audiences
- Build and protect brand equity
If your brand architecture is hindering and not helping you to grow, or meet your business objectives, and you need help defining the best structure for your business, then get in touch today.
