What Is Brand Architecture and Why Is It Important for Your Business?

by James Winter

header image

A business has a way of taking on a life of its own. Given enough resources and a little luck, a small business will sprout new branches—new product lines, new acquisitions, company mergers . . . the works.

It all sounds great and exciting—at least until people start to ask, “So, what is it that your company does again?”

You see, running a business is a bit like growing a tree. If you don’t regularly prune or trim its branches, it will one day become unrecognizable, not to mention ugly to look at.

If you add too many brand extensions without putting much thought into it, you’re bound to confuse customers.

And confused customers begin to lose loyalty.

You want consumers to keep buying? You need to make it clear to them what you’re offering, and more to the point, what your brand is about.

Brand architecture can help you.

What is brand architecture?

Brand architecture refers to the organizational structure of brands, products, and services within a company. It is the framework in which your brands relate to one another in terms of the overarching brand story you’re telling.

The purpose of brand architecture, however, goes beyond putting your brand extensions in the right places. It’s about the consolidation of assets in a way that clearly maps out your brand’s intentions.

When your intentions are clear and unmistakable in the minds of your consumers, managing their perception of your brand becomes an effortless exercise. This allows them to navigate your offerings and understand their value. When they know what you’re about, it becomes easier for customers to find what they’re looking for despite the many choices you’re giving them.

Types of brand architecture

So, how can you arrange your brand portfolio in a way that works for your business? To find out, it bears knowing the different brand architecture types in the market. They are the branded house, the house of brands, and the endorsed brand.

The Branded House

fedex

In a branded house model, the company has one single master brand that spans multiple offerings. It’s easy to identify a company that uses the branded house approach. For one, they bear the master brand’s name, logo, and slogan (among many others) across their products, with a few key variations that differentiate each product from one another. Typically, a branded house introduces new sub-brands to target a more specific segment of its target audience.

Good examples of companies adopting the branded house model include FedEx, Virgin, and Google. FedEx Express and FedEx Freight, for example, offer different types of shipping services. But there’s no mistake that they’re represented by one master brand: FedEx.

House of Brands

procter and gamble

In a “house of brands” structure, the master brand takes a backseat, giving the sub-brands the freedom to shine on their own. It’s the exact opposite of the branded house approach. Brands under the house of brands model are ‘rogue’ brands. Why? Because they enjoy more flexibility in terms of how they’re marketed to the public. In other words, these brand variants are allowed to have their own audiences, marketing strategies, and brand identities.

The most popular example is Procter & Gamble. Sounds familiar? Sure. But as you may have noticed, the multinational goods company is not the star of the show. Instead, the spotlight is given to its sub-brands, such as Crest, Head and Shoulders, Tide, and Ariel, to name a few.

The Endorsed Brand

nescafe

If the house of brands and the branded house are opposites, the endorsed brand falls somewhere in between. As is the case with the house of brands structure, endorsed brands are allowed to have their own identities. The only difference is that everybody knows that the master brand is behind it all. Sure, the endorsed brand is also the star of the show and enjoys a presence in the wide market. But is it stronger than the parent brand? No. Good examples of endorsed brands include Nescafe by Nestle, Sony Playstation, and Polo by Ralph Lauren.

Which brand architecture type is best for your brand?

Now it’s time to choose which brand architecture is the perfect fit for your business. If you have to make changes, make sure those changes maximize the marketing potential of your offerings, both individually and as a whole.

Determining your current brand architecture

Before you make changes to your brand architecture, review your brand’s mission, vision, and values along with your business goals. The last thing you want to do is make permanent changes without re-examining why your brand exists in the first place.

With that done, take a look at your current product/service mix. As you look at each sub-brand, product, or service, ask yourself the following questions:

Once you’ve answered the above questions, you will have to take a long hard look at your brand portfolio. Be forewarned: you’re going to make some tough decisions. You may have to get rid of, sell, or merge weaker brands. To use the tree analogy again, you don’t want your business to be weighed down by dead branches. They not only appear unattractive, but they can also cause your master brand to crash under its own weight.

The overarching strategy of the master brand must take precedence over your brand variants. If you undermine the goals of the parent brand with the vain hope that the success of a sub-brand will make up for it, chances are it’s going to have long-term negative effects on your overall branding efforts. Remember, there won’t be any apples if the trunk is dead.

Benefits of a well-defined brand architecture

We’ve already touched on some of the benefits of having a well-defined brand architecture early on. But to have a better appreciation of what a strong brand architecture does for your business, let’s give these benefits a closer look.

1. Clarified brand positioning

A well-defined and cohesive brand portfolio paints a clear picture in your customers’ minds of what your brand stands for and what your business delivers. When each of your offerings and value propositions is differentiated in stark relief, customers will find it easier to find what they need despite the number of products you’ve released into the wild.

2. Reduced marketing expenses

A consistent brand architecture not only clarifies your product offerings to your audience, but it also generates clarity within the organization itself. When it’s clear to everyone how each brand contributes to the master brand’s overarching goal, marketing teams will clearly see where to allocate their financial resources to get a better return on investment.

3. Stage set for more growth and expansion

In brand management, the goal is to put each of your brands in a position that targets a specific segment of your audience—without them getting in each other’s way. This ideal state allows your sub-brands more room to grow. That continuous growth creates gaps in the market, providing you with robust opportunities to expand your target market and increase market share.

4. Confidence among stakeholders and investors

When you rally your brands in a way that brings all your brand assets into clear focus, you’re more likely to inspire confidence among your stakeholders and investors. This lets them know that their investment is being put to good use, making it easier for you to win buy-ins from key stakeholders, investors, and top-level executives.

5. More opportunities for cross-selling

When your value propositions are crystal clear, the links between your product offerings become clear as well. This, of course, presents many opportunities for cross-selling A well-defined brand architecture means having a diverse range of differentiated products and services that complement each other, which puts you in a good position to leverage the right offering at the right time and within the relevant context.

6. Tell a compelling brand story

Every brand, product offering, or service tells a story. But put them all in a single brand portfolio without thought and you might get something barely unrecognizable. What you want to do is combine all these seemingly disparate stories and allow them to tell one overarching story that speaks to your audience on a deeper level. Otherwise, your brand and sub-brands are only contributing to the noise, forcing consumers to direct their attention elsewhere.

The case for using a DAM solution

case for dam

You may have your brand architecture all figured out, but the way your brands are being presented to the world is another matter.

Which brings us to brand assets.

Simply put, your brand assets are the elements that define how people perceive your brand. A brand asset can be audio, text, or a visual. This included logos, slogans, jingles, typography, and more if you want to be more specific.

When used effectively, brand assets can increase in value over time. Did you know that Nike’s Swoosh logo is worth $26 billion? Not bad for a logo that was commissioned for only $35 back in 1971.

When consistent, brand assets can have a significant impact on consumers. And when you’re a company with a robust brand portfolio, you want each and every sub-brand or brand extension to have that same effect on its intended audience.

The problem with multi-layered brands is that they have too many assets on their hands. This is where content chaos rears its ugly head. When there are too many assets to sift through, content creators and marketers tend to have a difficult time figuring out what to do with them. So much for managing customer perceptions!

This is where a DAM solution like Brandfolder can help.

By giving you a solution that allows you to manage, store, and distribute your branded assets from one centralized location, teams across multiple divisions will be able to handle your company’s brand assets with little difficulty.

Using Brandfolder’s visually intuitive interface and sophisticated taxonomy, everyone—regardless of the division and the product line they belong to—can find what they need, when they need it, and within the right context.

Final Word

Defining a brand architecture can be a daunting task. It involves too many moving parts. But if you do it right, it can be very rewarding. In the final analysis, it all starts with the ‘why,’ as cliché as that may sound. After all, that’s what branding is all about.

When it’s clear to you what your brand stands for, every element of your branding becomes deliberate, intentional, and thoughtful. When that happens, everything just falls into place.