Brand architecture: key considerations for your business

It is unusual to find a company that has just one brand. Even new businesses usually either offer a range of related services, or, while they may begin life with a single core product, they often have ideas for related products in the pipeline. As a business grows, branding becomes more complex and decisions about how and where your new products and services will ‘sit’ within your organisation and under your brand need to be made.

Taking the time to strategically consider your brand architecture from the outset can pay dividends later.

What is brand architecture?

Brand architecture refers to the organisation and hierarchy of brands within a company's portfolio. It involves strategically structuring and managing brands within a company's portfolio to create a cohesive and effective brand identity system, and provides a clear framework for how the brands are structured, positioned, and communicated to the target audience. Brand architecture organizes and structures a company’s brands to enhance brand value and market clarity.

Types of brand architecture

There are four main types of brand architecture as follows:

Corporate Brand Architecture

(also known as branded house)

The corporate brand serves as the primary identifier for the company, and is extended for use across all its products and services. Apple is an example of this: Apple Pay, Apple TV, Apple Watch, Apple iPad.

Endorsed Brand Architecture

The corporate brand lends its brand power to sub-brands that are otherwise autonomous. Cadbury is an example of this: Cadbury DairyMilk, Cadbury Flake, Cadbury Roses, Cadbury MilkTray.

Sub-brand Architecture

(also known as house of brands)

The corporate brand is in the background and sub-brands have substantial independence and visibility. Each sub-brand has its own unique positioning and market themselves individually with respective brand names, logos, slogans, websites and promotional tactics. P&G (Procter & Gamble) is an example of this, its sub-brands include: Pampers, Gillette, Ariel and Always.

Hybrid Brand Architecture

(also known as blended house)

The companies use a combination of the above approaches, tailoring their brand architecture to different product lines or market segments. This allows for flexibility and adaptation based on specific business needs. Coca-Cola is an example for this: Coca-Cola Zero, Coca-Cola Light, Fanta, Sprite.

This is usually an approach taken by established business who may have acquired new brands, or who want to expand outside their core audiences.

Pros and cons of each brand architecture approach

Corporate Brand Architecture & Endorsed Brand Architecture

Pros

• The corporate brand benefits from consistent visibility through its sub-brands and overall brand equity increases.

• Branding is easy to see and understand for consumers who associate a sub-brand automatically with the qualities of its parent brand.

• It is a very cost-effective and efficient brand architecture model.

Cons

• If one sub-brand suffers from reputational damage, it is likely to negatively affect the reputation of the parent brand and other sub-brands.

Sub-brand Architecture

Pros

• Businesses can target very different audiences and experiment with different pricing strategies.

• It is easier to enter new markets without affecting the other brands. Companies can take more risks with new product or service offerings.

• The company’s reputation is protected to a greater degree than with the Corporate or Endorsed brand architecture models.

Cons

• It is more expensive as each brand must be built from scratch with its own brand and marketing strategy.

• Brands are on their own, they will not benefit from association with their parent brand.

Hybrid Brand Architecture

Pros

• It provides the flexibility to allow new, experimental offerings to be developed and marketed without putting the corporate brand’s reputation at risk.

• It allows the business to choose to associate a service or product with the corporate brand if the business feels that it will benefit from the association.

Cons

• It can confuse consumers as some sub-brands are associated, and others disassociated with the parent brand.

• It can be challenging to keep the brand identities and brand books up to date

How brand architecture supports business

• A well-defined brand architecture provides clarity to customers, stakeholders, and employees regarding the organization's offerings. It ensures consistent brand messaging, positioning, and visual identity across different products or services.

• It provides a system and a structure for naming/branding future products and services. It removes uncertainty and facilitates agreement and alignment.

• It enables businesses to allocate marketing budgets, research, and development efforts effectively, maximizing ROI.

• It allows companies to leverage the equity of their master brand or corporate brand to launch new products or extend into new markets (cross-selling). This can help to accelerate customer acceptance (trust already exists) and reduce marketing costs.

• It facilitates the development of unique value propositions for each target audience. By employing different brand strategies and positioning, businesses can target specific market segments and cater to diverse customer needs.

• Depending on the brand architecture in place, it may be easier to contain reputational risk to one area, and avoid contaminating the parent brand and /or associated brands.

An effective brand architecture clarifies brand positioning, improves customer understanding, and maximises the value of the overall brand portfolio.

Deciding on the most appropriate brand architecture

The choice of brand architecture depends on factors such as the company's size, industry, target audience, and the relationships between its brands. Whichever architecture is chosen has implications in terms of risk, service expansion, and marketing costs (and ultimately company valuation). There is no wrong approach - what is needed is thought, clarity and agreement so that the implications are understood and an approach is chosen that best serves the mid and long term objectives of the company.

Explore our brand services or contact us to run a brand architecture workshop on your behalf.