Brand Architecture

Brand Architecture Defined

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What is Brand Architecture?

Brand architecture provides the external ‘face’ of a business and supports its overall strategy.

Brand architecture helps companies answer important questions:– What to call new products?

– What are their relative weights and relationships?

– How much visibility to give to the corporate name?

– Should there be a different name for the company and the commercial brand?

– Should the same architecture apply around the world?

“Where much of an organization’s brand building efforts once focused on acquiring, launching or aggressively extending brands… today’s focus is on trying to get the most from exiting brands through better organizing and managing brands and brand inter-relationships within the existing portfolio.”

- Rob Osler, “The Type-Role-Purpose Brand Taxonomy,” Brand Management, July 2007

Brand Architecture Defined

Brand architecture establishes the optimal interrelationships of brands within a single company.

Architecture also describes the role of each brand in the corporate portfolio and the linkages between brands.

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Brand Architecture Specifies Portfolio Relationships

CorporateCorporate

Business Unit

Business Unit

BusinessUnit

BusinessUnit

ProductsProducts ProductsProducts

Brand architecture may or may not line up with internal organization

structures.

Driver (Master)

Drives purchase decision and defines user experience. Most represents the differentiation inherent to the offer.

Co-driver(Partners)

Contributes equally to brand equity in a multi-brand offer.

Endorser Provides approval, credibility or guarantee to a range of products, but is usually not the driver.

Sub-Brand Equity is driven by another brand, usually the driver.

Ingredient Materials, components or parts that are contained within other branded products.

Brand Architecture Defined

Brand Architecture is part of corporate strategy. It should be established prior to creating a brand strategy

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Where Architecture Fits

Strategic Marketing Framework

I. Corporate Objectives & Brand Architecture

II. Brand Strategy – Identity & Positioning

III. Go-to-Market Strategy

Value Proposition

Messaging & Offer Design

Customer Experience

IV. Marketing Execution & Metrics

Support business strategy by providing a “face” to the business

Allows for fewer stronger brands with less overlap

Minimizes waste and marketing inefficiency

Builds credibility for leveraging the brand into new opportunities for growth

Enables equity to “flow” through the portfolio

Benefits of Optimizing Brand Architecture

Brand Architecture Defined

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Reasons for Revisiting Architecture

Brand architecture is built to last. It should be revisited when companies change strategic direction or the business has outgrown its existing brand structure.

Sizable business unit is acquired or sold

Lack of clarity about role of master brands relative to subbrands – unclear where to build equity

Corporate brand and product brands have the same name

Brands are losing relevance with consumers

Triggers for revisiting include:

Too few brands in the portfolio - brands have been stretched beyond their credibility and effectiveness

Too many brands in the portfolio - programs, sponsorships and products competing for attention and investment dollars

Brand Architecture Defined

Recognized Kellogg’s master brand was underleveraged

Acquired multiple new master brands – Keebler, Kashi, Morningstar, potentially Pringles, needed to elevate Kellogg’s corporate brand above its cereal master brand

Wanted to leverage investment in 2012 Olympics to benefit all brands

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Example: Kellogg’s Architecture Changes Drivers

http://www.forbes.com/sites/jenniferrooney/2012/05/10/kelloggs-embarks-on-major-brand-overhaul/

“Kellogg’s is a truly iconic brand …We felt that having a stronger brand, driving a stronger point of view, a more powerful identity and have at the center an umbrella to talk about our portfolio more holistically, to talk about the power of breakfast, to talk about the value of cereal—it sort of became a much bigger platform to capture our thoughts about how we wanted to build a bigger relationship with them.”

“If you look at our portfolio we have a number of masterbrands: and we had to start separating out the Kellogg’s brand from the Kellogg company … just as we did effectively a brand refresh of the Kellogg company, and what it stood for provided a north star for the aggregate of the master brands in the company, we then needed to be very clear about what Kellogg’s the brand stood for and provide the north star for all the sub-brands that kind of sat underneath it.”

“There are occasions such as the Olympics, when you want to encompass a certain number of those sub-brands and where the master brand approach provides an effective way of doing that. You would need it to ladder up to a common identity system.”

Brand Architecture Defined

Branded elements can be effective for distinguishing and energizing a brand and may even be trademarked, but live outside the architecture. Keeping them in their rightful place requires clarity around their strategic intent.

– Enhance uniqueness and memorability. – Are potentially own-able and can be monetized via licensing and co-branding

arrangements.– Take care they do not overshadow the brand

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Brand Elements Are Not Part of the Architecture

Celebrities lend meaning

Ingredients build credibility Characters create likeability

Sponsorships build affinity

Branded House (Monolithic)

Single master brand where everything is unified One name – one visual system Features/benefits of product or service are less important than

brand promise Client trusts the brand Brand extensions built by descriptors

Branded House (Monolithic)

Branded House (Monolithic)

Marketing synergy between product and service name and the parent

Product and service has a clear market presence; benefits from parent association

Parent endorses the product/service

Endorsed

Endorsed

Found in FMCG companies Separate corporate identity from brands – Unilever, Kelloggs Brands have names, lifecycles, personalities of their own Often compete with each other

House of Brands

House of Brands

Hybrids

UnileverUnilever

Combination of all three – House of Brands, branded house and endorsed

Occur through M&As Preserve the goodwill associated with the acquisition

Hybrid

Telstra

Brand Architecture Solutions

House of Brands advantages– Builds individual strong brands for category

dominance– Limits risk by containing brand reputations

(good for high risk industries)

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Brand Architecture Solutions Spectrum

House of Brands

Branded House

Single parent brand spans a set of

offerings.

Independent brands, each maximizing its

impact on the market.

Branded House advantages– Maximizes marketing spending efficiency– Maximizes awareness among all

stakeholders (i.e., investors, employees)

Hybrid Solution

Solutions Spectrum

Brand Architecture Solutions

Most companies build their businesses through a mix of architecture solutions.

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Hybrid Architecture Solutions Dominate

House of Brands

Branded House

Single parent brand spans a set of

offerings.

Independent brands, each maximizing its

impact on the market.

Hybrid Solution

Brand Architecture Solutions

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Six Main Architecture Types Within the spectrum, the number of branding levels determines the architecture

type. (Note: Fewer branding levels is best, aim for no more than three.)

Brand Architecture Solutions

Questions to consider: – Do the brands address the same or different customer segments?– How important is it to represent the brand the same way in different geographies?– Are there synergies that can be leveraged between different brand or business units?

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Determining the Optimal Architecture

House of Brands

Branded House

Target multiple segments

Hybrid Solution

Few synergies to be leveraged

Address individual geographies

Reinforce a global organization mindset

Many synergies to be leveraged

Target single or few segments

Single parent brand spans a set of

offerings.

Independent brands, each maximizing its

impact on the market.

Brand Architecture Benefits

Decisions about naming should be based on target customer equity.

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Brand Architecture Directs Naming Decisions

Brand Architecture Implications

Consistency - Architectures with a single branding level require more internal coordination than multiple branding levels.

– Brand committee or council across business units, silos or geographies used to ensure consistency

– Some organizations establish a centralized marketing structure or internal service unit to avoid compliance issues inherent in committees

Innovation and Investment – Portfolio brands compete for resources– A brand’s strategic purpose in the portfolio should determine which of the latest

features and investments are made in each brand

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Architecture Decisions Have Business Implications

Strategic Purpose Description

Strategic Significant contributor to company’s future sales or market position. Has potential for positive impact on overall perception of the corporation.

Distinguisher Enhances the differentiation of another brand. Also referred to as ‘branded energizer’, differentiator, or silver bullet.

Cash Cow Money making brand that does not represent future significant growth.

Corporate Low visibility to customers, but important to corporate constituents such as regulatory bodies, investors, employees, trade groups, partners.

Fighter/Flanker Response to competitive threat. Protects share of other brands in the portfolio.

Brand Architecture Implications

Not all portfolio brands are equally important to the business. Clarity of strategic purpose helps companies understand where to invest resources for maximum impact.

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Strategic Purpose Should Drive Investment Decisions

Strategic brands represent future

growth

Fighters/Flankers protect other

category brands

Distinguisher brands provide added interest

Cash Cows generate revenue for other

investments

(J. Crew)

(Microsoft)

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Brand Architecture Process

Effective brand architecture directly impacts the market value of a business, so it’s worth taking the time to get it right.

The first step in aligning brand architecture with business strategy involves a strategic analysis. This analysis forms the basis for developing and evaluating architecture alternatives.

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Getting Started

Brand Architecture Mapping

Alternatives Development

Evaluation of Alternatives

How aligned are external and internal perceptions of brands and their roles?

What are the various ways the portfolio could be configured going forward?

Which architecture alternative best fits the short and long-term business and brand objectives?

Strategic Business Analysis

How closely aligned are the brand and business strategies?

Brand Architecture Development Process

“…[architecture] should not be seen as a formal design problem but rather a matter of deciding on the value flows to be created between the different parts and products of a company. As such it affects the value of the company.”

– Jean-Noel Kapferer, The New Strategic Brand Management, 2012

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Grow Brands Carefully