22 February 2021
Entropy: the tendency of ordered systems to revert to chaos if left unattended.
It’s also your organisation’s worst enemy.
As your organisation grows, merges, and acquires, a clear brand architecture is crucial for long term viability (and profitability). But what exactly is brand architecture, why is it so important, and how do you know which one to use?
What is brand architecture?
In essence, brand architecture is the way a company organises its sub-brands. There are a variety of models, each suitable for different contexts, and with its own benefits and drawbacks. The most common examples include a Branded House, a House of Brands, or a Hybrid model.
Getting your brand architecture right comes with a host of benefits:
- More cost-effective branding and marketing
- Greater clarity and consistency throughout your organisation
- More straightforward framework for your marketing and sales
- Provides guidance around launching new products or acquiring other companies
Brand architecture ultimately comes down to managing the perception of your brands. How do customers make sense of an extensive and varied organisation?
What is a Branded House?
The most common structure, a Branded House, involves a parent brand with smaller sub-brands clustered underneath it.
Probably the most recognisable example of this structure is Google, which encompasses the sub-brands Google Maps, Google Drive, Google Calendar, and so on.
Importantly, the sub-brands retain the ‘flavour’ of the main brand- that is, the main brand’s logo, positioning and messaging. Although each sub-brand will have their own unique messaging components, they benefit from being associated with the main brand.
Pros of using a Branded House
It’s efficient. Creating a strong, recognisable brand is a lot of work. It takes time to build and requires ongoing resources to maintain. When it’s time to expand your products or services, using a Branded House structure means you don’t have to start from scratch. It also allows your branding to evolve more easily. The more trust and rapport you have with your clients, the more easily they’ll adapt when you offer new and different things.
Cons of using a Branded House
If you’re using a Branded House structure and any of your products or services gain a negative reputation, that can generalise to the whole brand. Conversely, an incredible product might be dragged down if the mother brand isn’t particularly strong or relevant. Finally, anything less than crystal-clear branding can lead to confusion about what your brand actually does.
What is a House of Brands?
A House of Brands is the opposite of a Branded House. Rather than having a group linked by common branding, House of Brands is a group of brands owned by a single company, each with their unique branding, audience, and marketing. A prime example of a House of Brands is Nestle, which owns over 2000 brands globally. Some Australian names you might not have realised are owned by Nestle include Allen’s Lollies, Purina, Uncle Toby’s, and San Pellegrino.
Pros of using a House of Brands
A House of Brands means you can offer wildly different products and services without worrying about overlap. If you have the resources to fully flesh out multiple different brands, you could end up reaching multiple specific target audiences. The organisation and individual brands’ reputations are also safe if any one of the brands gains negative associations. A House of Brands is particularly popular in FMCG (fast moving consumer goods) industries as it allows companies to produce multiple competing products.
Cons of using a House of Brands
All the work that goes into a brand? Multiply that by each individual brand and that’s what you’re facing with a House of Brands.
Multiple independent brands can quickly become overwhelmingly expensive, difficult to manage, and difficult to police within your organisation. The power of the parent brand also doesn’t do anything to bolster the reputation of the sub-brands.
If neither of the above structures feels right, you might consider a hybrid of the two. Coca-Cola is a perfect example of a successful Hybrid structure. There’s Coke, Diet Coke, Coke Zero, and so on- set up like a Branded House. The Coca Cola Company also owns 25 other brands, including Sprite, Fanta, Powerade, Mount Franklin, and more.
With all this talk of sub-brands and brand architecture, you might be feeling motivated to make some changes. But does that new product or service really need it’s own branding? Keep an eye out for How to Manage Expanding Your Brand part 2, a deep dive into when you need new branding, when you don’t, and how to decide.