Companies with disjointed marketing campaigns (and a disconnect with their corporate identity) can lead to a lot of complications. This typically happens when large corporations acquire other companies. The legacy brand fails to smoothly integrate with the new brand and everything becomes visually and editorially confusing. Suddenly, customers experience mixed messaging. This is where brand architecture comes in to save the day.
Most small brands, solopreneurs, and independent start-ups will not need to worry about brand architecture. But what if you eventually expand and become associated with multiple brands as well as numerous products and services?
Brand architecture is a way to organize different sub-brands of a much larger entity. It achieves this by describing how to best organize the different brands, as well as relate each brand to one another and to the parent company. This makes it possible for marketing departments to separate the brands when necessary but also allows them to work with the others as needed.
Table of Contents
- Understanding Brand Architecture
- Three Different Types of Brand Architecture
- The Branded House
- The House of Brands
- The Endorsed Brand
- Combined Brand Architecture Systems
There are many components when it comes to understanding brand architecture, but let’s start with the overarching theme: organization of the sub-brands under a parent company. Each brand will have its separate identity as well as a cohesive identity linked to all the other brands. This makes it possible for marketers to separate the brands or combine them, depending on their needs, to make the most out of every marketing opportunity. It allows marketers to evaluate the current marketplace and make the best possible branding decision that will offer the greatest return on investment.
There are three different types of brand architecture, and there are advantages and disadvantages to each. It’s important to review each one to determine which type makes the most sense for your company. Using brand architecture correctly will save you time and energy in the long run. It’s not a one-size-fits-all situation. Here we’ll discuss the three types of brand architecture and how you can best utilize them.
One type of brand architecture, called the branded house, focuses on creating an overall branding structure. The focus is on unification and creating a singular overarching brand that accompanies all of the sub-brands. All of the sub-brands then help to contribute to the overarching brand, or masterbrand. All of the identities are intertwined.
An example of the branded house architecture style would be FedEx. The FedEx Corporation has several sub-brands including FedEx Services, FedEx Express, FedEx Ground, FedEx Freight, FedEx Office, FedEx Home Delivery, etc. Each of these different sub-brands has a slightly different logo and slightly different coloring yet maintains a distinct FedEx look. This makes it possible for the smaller brands to benefit from the overarching FedEx brand. FedEx’s reputation and plethora of available services are recognizable by most people. As a result, incorporating each division under one umbrella helps the brand succeed in the marketplace.
Another example of the branded house architecture style would be Coca-Cola. This company was previously following a house of brands architecture style (which we’ll discuss in a bit). However, it recently moved towards a branded house architecture style. Coca-Cola is the parent company, or masterbrand, and its sub-brands include Diet Coke, Coca-Cola Life, and Coca-Cola Zero. Now, these brands are all being marketed directly underneath the masterbrand. Rather than exist as separate brands, they are all being marketed as one entity with different options. It helps boost the Coca-Cola brand in the marketplace.
One of the “disadvantages” with a branded house is that the masterbrand (and all of the sub-brands) are responsible for one another. When any of the brands take a hit with criticism or negative publicity—all the brands are affected. The credibility of one brand is spread across all partnered entities. The reason this is a “disadvantage” is it all depends on the situation/perspective. If the overall momentum of a company is positive, then all the sub-brands can rise together just as well. If the masterbrand has strong credibility and positive attributes in the marketplace, then this can benefit all of the sub-brands.
The house of brands architecture structure keeps each brand separate and unique. Each brand is protected because they operate individually. The key here is that the general customer has no idea that these brands are interconnected. Each brand operates as its own distinct unit. Some companies that operate this way include Procter & Gamble (Old Spice, Tide, CoverGirl, Duracell, Gillette, Head & Shoulders, and Vicks) and Unilever (Axe, Dove, Lipton, and Magnum). Many of these companies even own sub-brands that are in the same industry. The house of brands architecture model organizes brands individually and removes any connection between the brands or to the parent company.
One of the greatest advantages of the house of brands approach is the protection it affords each brand if one of its sub-brands has a crisis. If there is a problem with one of the brands, it won’t affect the others. This can be a healthy strategy, particularly when the brands span across different industries. It also makes sense if the brands were initially developed as individual entities. A great example of this advantage would be Facebook’s acquisition of Instagram. Facebook kept Instagram separate, despite the fact that Facebook is the masterbrand. Facebook didn’t want people who love Instagram (and dislike Facebook) — or vice versa — to have a negative reaction to the other brand. Operating in this fashion leaves room for people to have their own opinions about each brand and to view them as different entities.
The disadvantage to the house of brands approach is that any credibility or positive value that the masterbrand has will not be passed down to the sub-brands. This also means that every time one of the brands is promoted, it will only benefit that particular brand. This can be taxing when it comes to marketing and branding budgets. It means less value on the money spent when a positive ad for one brand succeeds (and doesn’t benefit the others).
As always, it just depends on the situation… especially when you have a masterbrand operating in the same industry as the subs. Because these sub-brands are competing with one another, it helps to have them distinctly separate. For example, let’s consider a parent brand that has three sub-brands in the same industry. This parent brand likely targets different audiences by leveraging entry-level/discount products, mid-range products, and luxury products. They would want those brands to have absolutely nothing to do with one another. That way, if there is a quality control issue with the cheap product, it won’t affect the mid-range or premium luxury brands.
The endorsed brand architecture model is typically the least common. This is a way of organizing brands, allowing them to either be associated with the masterbrand or not. There is flexibility. Brands can be marketed with the original brand or separately under their own branding style.
Toyota is an example of an endorsed brand architecture model. Toyota owns the Lexus car brand and sometimes represent Lexus as an individual company in their marketing. Other times, Toyota will emphasize the selling points of Toyota while representing Lexus. Toyota has the choice to utilize the masterbrand branding or to stick with individual branding.
With endorsed brand architecture models, most corporations will make their marketing and branding decisions for the sub-brands on a case-by-case basis. This can be resource intense and definitely only works for departments who have the time and budgets to consider each marketing decision individually. Each decision is screened to determine whether branding should be individual or include the overarching masterbrand.
Combined brand architecture systems take into account that the sub-brands have different needs than the masterbrand. Some of these brands might benefit from being directly connected, while others would be better off maintaining their individuality.
For an example of a combined brand architecture system, we can again look at Facebook. Facebook is a tech giant and has continually acquired new companies, yet it takes a different approach with each one. Facebook has also created several divisions (ie “Facebook for Business”) and these divisions operate under a branded house approach. With the branded house approach, Facebook lends its name, logo design, and branding elements. However, with other acquisitions such as Instagram or Oculus Rift, Facebook takes a house of brands approach to allow each brand to have its own individual brand. Allowing them to maintain their individuality (and independence) means that their respective communities can stay focused on one brand. In this case, it doesn’t benefit Instagram to be pushed under the Facebook umbrella.
These three types of brand architecture systems (and the combination of all three) are all possible solutions to the dilemma of masterbrands with multiple sub-brands. Take your time and review your own corporate image. Our best advice for deciding on your own type of brand architecture is to think about what your brand would look like under each. Which type makes the most sense for your corporate identity as it is set up now? Which type makes the most sense for your business in the future? What makes the most sense based on consumer knowledge and the marketplace?
After you have decided on a brand architecture blueprint, how are your marketing materials looking? If it’s time for a new logo or a rebranding, we’d love to help!