By Anna Ribas, on 18 March 2021
Brand architecture is something most companies don’t consider when discussing marketing. Yet, how the public perceives your brand includes its structure. Is your brand architecture clear and transparent, or is it a complicated web of companies that alienates your audience? People want to know who they’re doing business with and so you need to make it easy for them.
Here we’ll define exactly what brand architecture is and the different types used by prominent brands. We’ll also include some examples to better illustrate brand architecture in action.
What is Brand Architecture?
Brand architecture is the structure that illustrates the complete business portfolio of a larger organization. It clearly displays the hierarchy of different brands, sub-brands, products and services, as well as how they relate to each other as a brand family. From a marketing standpoint, it helps to separate different brands as standalone marketing pursuits or also to cross promote and provide support when deemed fit. If consumers know and trust a “master brand”, they are much more likely to do business with a related sub-brand or brand extension. Likewise, if a parent company isn’t well known, it’s better off letting sub-brands shine on their own.
In short, brand architecture is about perception and the image you’re projecting to customers and stakeholders. It also provides a clear picture of how to focus marketing efforts on separate brands or to combine them for greater effect.
Types of Brand Architecture
While there are more types of brand architecture, we’ll focus on the three most common here:
- House of Brands
- Branded House
Later we’ll give real world examples of each brand architecture type. These structures depend on many factors and in the end are based on business models, strategy or have been designed for legal reasons.
House of Brands
A House of Brands architecture is set up so that individual brands shine as standalone products yet are owned by one parent company in the background. The parent company is basically irrelevant to the marketing of these brands as they’re commonly subsidiaries which are bought up one by one.
Sometimes these smaller brands are well-known, household names and so changing their name or even mentioning that they’re under new ownership could damage their equity. In many cases the subsidiaries are more famous than the parent company.
The Branded House architecture model consists of the master brand and all additional sub-brands which use the same name but with a modifier or description. The Branded House model works well for brands which have achieved a certain level of authority and have a loyal following. Customers readily accept new additions as sub-brands can ride on the established name brand. This model is also known as an umbrella.
Endorsed and Hybrid
In an Endorsed Brand architecture you sort of have a combination of the first two models mentioned above but with some important distinctions: A parent company owns the other brands like in a house of brands, but plays a much bigger role in marketing—the parent company name is respected and revered and so should be mentioned. Like in a branded house there is an umbrella company but they don’t make their name the prominent component but rather a ‘brought to you by’ or ‘from the creators of’ mention.
A strong parent company logo plays second fiddle to the sub-brand but lets you know you can trust in the quality.
A hybrid model basically consists of all three architectures discussed and is generally done out of necessity as mergers and acquisitions occur. It’s a more flexible approach that allows individual brands to operate on their own.
Brand Architecture Examples
Now that we’ve covered brand architecture types, next we’ll give some examples of successful brands and the architecture they use to structure their companies. It’s all about branding and how important a parent company is in the marketing of products. For some brands the parent company is the big name, for others it has no bearing on the marketing of goods and services.
Branded House - FedEx and Virgin
Both FedEx and Virgin have built solid brands that people know and trust. Their logos are instantly recognizable and for many people they represent brands with integrity. For these reasons, FedEx and Virgin use the branded house architecture to structure and market their companies. Sub-brands are basically modifiers to the existing logo and are extensions of the master brand.
This allows Virgin and FedEx to maintain and grow brand loyalty while introducing new sub-brands and products which ride on the master brand’s name. When you have positive experiences with one Virgin product you can expect the same from others.
House of Brands - Unilever and Procter & Gamble
Unilever and P&G are enormous conglomerates that have acquired many sub-brands over the years. Their master brand names, however, really don’t have much to do with how consumers perceive the brands under the umbrella. People around the globe know and love their standalone products like Old Spice and Dove. And so, there’s really no reason to mention the parent company aside from a small logo on the back of packaging. Unilever and P&G are more or less invisible when it comes to marketing their sub-brands.
This architecture also helps when a sub-brand has a loyal following for being a home grown venture or as a family owned business.
Endorsed - Cadbury and Nestle
Both of these chocolate makers use the endorsed brand architecture to promote standalone products backed by a master brand name. While the products have their own strong brand presence, and have different target audiences, the familiar Nestle and Cadbury logos give shoppers the confidence to buy. Basically, consumers know they can trust the product’s quality and aren’t in for any surprises.
Choosing the best brand architecture for your business depends on many factors. For smaller businesses, the branded house model means you can save on design and branding costs and simply add products/sub-brands as you expand, all the while using your original logo. Remember, however, that this model means every sub-brand will be associated with the master brand, for both positive and negative reasons.
A House of Brands architecture, while more expensive to develop and maintain, allows each brand to stand alone and avoid negative press from related products. The endorsed model seems like a good middle ground yet isn’t the best for startups as it relies heavily on the master brand being a household name.
Your brand architecture is an important structure for customers to understand. It builds perception of your brand in their minds and should therefore be chosen and managed carefully. It also clarifies marketing strategies, which in turn allows for more efficient and effective targeting.