Organizations that have multiple divisions or entities within them should consider what their long-term brand architecture will be. For example, if your organization is a parent company, with many divisions within its umbrella, are there brand and design consistencies within those divisions? Should there be?
When we work with clients who have substantial growth plans or have multiple brands within their umbrella, we tackle their brand architecture first before diving into brand messaging, logo design and overall marketing strategy. We do this because it’s important to create a brand that acts as a foundation for growth, rather than a brand that’ll need to be redesigned or reworked to accommodate changing corporate structures or environments.
When we develop brand strategies for clients, we always aim to create brands that are:
Part of determining that scalability and timelessness is evaluating what the next 5, 10, 20, 50 years could look like for an organization. Sure, we can’t predict the future (though if we could, that would be pretty cool), but we can gauge what’s next based on our client’s overall organizational goals. For example, say your organization exists under one company, but you plan to separate service lines into two legal entities in the next five years. Our goal as brand strategists is to look at that change and growth even further. Essentially asking a host of “if/then” questions, we work to uncover if that is where growth will stop, or if there will be even further separations and parsing out of services. Those questions can look like (but not be limited to):
- How strongly should sub-brands relate to the parent?
- Do the brand objectives relate to the sub-brands?
- Is it important for customers of Company A to know Company B? Or vice versa?
- Is it important for customers of Company B’s Subdivision 1 to know Company B’s Subdivision 2?
- Will Company A’s branding need to be inclusive enough to scale in the future?
The answers to those questions and more can help us determine what the overall brand architecture and long-term strategy will be. The more complex an organization’s growth strategy or portfolio, the more difficult it will be in the future to change brand architecture. That’s why these decisions are so vital up-front or as early as possible.
The brand structure of an organization impacts how a company will communicate and market its products in the immediate, as well as in the future. It’ll also drive business decisions in terms of how teams are organized and how budgets are structured.
A branded house architecture is best when a strong master brand exists with divisions underneath it. In this scenario, the division brands will contain the master brand’s name and logo lock-up structure.
Branded houses work for corporate structures that rely on established customer recognition and loyalty, where customers care less about product features or benefits than they do about aligning themselves with an organization they love and trust.
Examples of a branded house structure include:
- Harley Davison
- John Deere
In these instances, the organizations above don’t necessarily have products that exist as separate entities. Rather, they have products or services that contribute to the strength of the overall master brand, or parent company.
This structure works well when an organization aims to target a similar audience with different products and wants to build off of brand recognition, trust and the same value proposition for different offerings. Branded house structures can be seamless with reputation risk from product-to-product or service-to-service is low—where failure to excel in one area of the service-offering won’t affect the remaining products or services, or the organization as a whole.
House of Brands
Not to be confused with a branded house structure (why they’re named so similarly is beyond us), a house of brands architecture features a collection of distinct brands under a parent company that consumers may or may not be aware of. In this instance, the parent company is only typically important to the investment community if it’s a publicly traded company.
Two great examples of a house of brands structure are Procter & Gamble and Unilever. Under the Procter & Gamble parent company are a handful of brand extensions. These brand extensions aim to create a collective of sub-brands that serve similar purposes or customers. For example, within Procter & Gamble are the brands: Aussie, Pantene and Herbal Essences, as well as Crest, Oral-B and Fixodent. Procter & Gamble’s brand extensions group aligning brands together so they can endorse each other and build upon their individual brand credibility.
In the case of Procter & Gamble’s brand extensions, their sub-brands could be seen as competing against one another. However, if you consider the target audiences for the individual brands (for example, Herbal Essences versus Pantene), you begin to see that they are targeting slightly different consumers with different needs (i.e. a value for the money shampoo versus a premium hair salon shampoo). Because of this, a house of brands structure works well when an organization aims to target different audiences with similar product groupings. At the end of the day, the growth of the individual brand is aiming to serve the growth of the parent company so any market overlap is not a concern.
If the individual brands cannot hold up well on their own, it may be better to consider a different approach. You can see this particularly in the case of the shampoo brands where they are each so unique and distinct, with immediate and clear brand recognition.
Oftentimes within a house of brands structure, the parent company has little to no public face. That level of anonymity is great until there is a public relations or communications breakdown. When this occurs, the public will look to the driving force of corporate values—the parent company. So organizations looking to establish themselves with a house of brands structure should think through how their mission, vision, values and reputation management will be communicated and managed throughout each individual brand.
Within an endorsed brand structure, there is a parent brand and associated sub-brands that have unique audiences and market presence. The sub-brands in this structure benefit from their association with the parent company.
The most well-known example of an endorsed brand structure is Marriott. Under Marriott’s umbrella is:
Marriott Hotels & Resorts
New World Hotels
Marriott Executive Apartments
Marriott Vacation Club
The Ritz Carlton Club
Marriott Grand Residence Club
The relationships between the individual sub-brands are mutually beneficial ones, with each benefitting from the strength and brand recognition of the other. Endorsed brand structures are great when organizations want to target different audiences while continuing to use the power of the master brand.
However, organizations should be mindful that an endorsed brand structure often requires a hefty marketing budget, as equal marketing dollars will have to go into each brand to build the individual awareness. Having the presence of the well-known master brand, though, will make the job of branding and marketing a bit easier.
Hybrid brand structures are exactly as the name suggests—hybrids of the brand structures mentioned above. A great example of a hybrid brand structure is Alphabet, the organization that owns Google.
Within Alphabet’s brand structure lives Google, Nest, Sidewalk and Calico, to name a few. But, obviously, Google has a host of brands in and of itself and each of those brands benefit from the clout of the overarching Google brand. In that sense, Google’s sub-brand structure is an endorsed brand, where Alphabet’s brand structure is a house of brands.
Because Google is able to exist separately on its own within the house of brands—with little to no real crossover in service offerings from its counterparts, the structure of its sub-brands are able to remain clean and seamless.
With a hybrid brand structure, flexibility is given for there to be multiple tiers and layers of brands and hierarchies. Oftentimes, hybrid brand structures are born out of mergers and acquisitions, but could be a valuable structure when an organization aims to grow one service line or division more than others within the parent company.
Creating a Strong Brand Architecture
Brand architectures aren’t just for large, complex or publicly traded companies. Even small businesses should think through their future scale and growth and work to set up their brands for growth and success from day one.
Setting the tone for the brand architecture early will help avoid brand confusion in the future as (or if) an organization scales, and could ultimately work to reduce marketing costs as brands that are structured in a logical way are simply more efficient.
We’re here to help! If you are getting ready to launch your brand, business or are looking to scale an existing one, let’s think through your brand architecture together.