Brand Management Marketing Series
Brands are fluid and constantly changing just like their customers. But how do companies bring their range of services or products into focus? How do they decide what to sell? What to promote? How to create a competitive advantage?
At a certain level of organization and self-identification, whether strategic scaling or simple internal curiosity, marketing managers will ask themselves whether their products/services are simple or complex?
As a majority answer typically confirms their bias to the latter half, the topic of brand architecture comes into play.
What exactly is brand architecture? Well, to put it simply, it is the natural organizational structure of your company brands, sub-brands, and product/service segments.
It is the functional management and overview of your customer’s perception regarding your brand and with time, hopefully, it equates to stronger trust and understanding.
The process of creating a brand architecture begins with the simple idea of a brand or product extension between similarities and differences, this can build into a foundational transition to a more complex and permanent brand hierarchy.
The types of brand architectures seen these days vary between a brand house and a house of brands and we will look at their particular differences and why it may make sense for managers to approach these variable business structures.
The vitality of your brand these days largely depends on your customer’s ability to stay matched with your internal values, identity, and points of difference. The best way to do this is to build an optimized brand architecture thus paving the way for your brand to be socially responsible and transparent.
Whether your company is large, small, franchised, licensed, or simply fly-by-night type of operation you should expect to follow an architecture of sorts as the customer is used to these optics.
Not only does brand architecture provide clarity, insight, and research for an organization from a customer standpoint but it equates to depth and salience with your audience.
The creation of the brand architecture maximizes the level of brand equity transferred between your brand and sub-brands thus reinforcing the rapport and trust of your target consumer.
An extension is only available once an architecture has been created. The trick is to ten identify the opportunity for differentiation between a form-factor, a new alternative to an existing and popular product, or an addition to something that customers already love.
The idea of brand extension lay in the ability of brands to distinguish the opportunity and value apparent in branching into a new product or service under an existing business anchor.
Brand managers can then release a new product or service under the same identified and known brand name.
Extensions can not only bring rewards in revenue and business growth but an increased positive perception and product acceptance.
Dr. Squatch soaps, sold exclusively online, had so much success they eventually extended into the obvious next segment of Deodorants and Antiperspirants showing a classic case of brand extension.
The new products were created under the same name with a differentiating function and product segment altogether but the customer remains the same.
Brand House or House of Brands
Another differentiation exists in the operational capacities of Branded Houses or Houses of Brands.
A Branded House is the most common and usually equates to smaller brands being promoted underneath a larger brand name. Think Apple or Google here. We use the subset brands knowing we trust and have a built relationship with the parent brand.
The sub-brands never outshine the parent brand but operate dependent on one another and in a shared eco-system.
A house of brands is the alternative and defines itself as a home to numerous different brands, independent of each other, each with its own tone, look, feel, logo.
The differentiated/independent brands all fall under the same owner or group. We call this a house of brands. Think Proctor & Gamble, Johnson & Johnson.
Another great example in the commercial brokerage and real estate side of the business in Newmark. Formerly known as Newmark Grubb Knight Frank, the Global brokerage company is not only part of a Branded House (BGC Partners) but a House of Brands itself.
Illustrated within its numerous digital channels and websites are a list of subsidiary brands that operate independently of one another but all belong to the same parent company, Newmark.
With several extensions, branded houses or houses of brands can identify marketing strategies for each using the existing research and development.
The available index from compounding multiple brand extensions and product segments now establishes itself as the brand hierarchy.
The Brand Hierarchy is a more strategic overview of how particular brands, sub-brands, and products or services behave within their respective capacities.
Going back to similarities and differences, the strategy behind the various product operations then goes on to define the different stages of the merchandising hierarchy.
The bigger a brand, the wider its product range and potentially more vague it could become to the average consumer at any particular rapport stage. Thus the hierarchy comes into play to effuse the trust of the “known” parent brand.
Him’s is a great example of this type of extension and thus cooperate hierarchy into several different industries for one trusted brand amongst men.
Hair Loss, Erectile Dysfunction, Skincare, and Mental Health are all segments where Him’s has established a trustworthy rapport with their customer.
The levels of the hierarchy typically include corporate/umbrella/family brands, endorsed brands, and individual brands.
While the highest level is reserved for the larger corporations (cohesive connection) and the lowest level is reserved for the independent brands or consumer-facing brands with the limited corporate connection.
The creation, implementation, and management of a solidified brand hierarchy can provide direction for future product segments and help companies avoid internal product cannibalizing.
The organization of one’s products will provide insights, research, and development. This indexing of data between similarities and differences eventually creates the perfect catalyst for brand extension.
Eventually, every brand manager wants to grow and explore the what-ifs of product differentiation.
The only way this is possible is via strong and optimized brand architecture. The right brand architecture will not only elicit strong brand equity across your sub-brands and umbrellas, but it will compound and permeate a brand resilience for tough times ahead.
It is with these hierarchies and organizational strategies that brand managers can participate in product design, segment creation, and eventually cement strong culture, and fabricate consumer responsible brands that continue to scale.