Brand architecture

Companies that own large, interrelated portfolios of branded goods or services almost invariably draw on a marketing strategy known as brand architecture to structure their advertising and product positioning efforts. Brand architecture belongs to the marketing subfield of brand management, and creates a structured hierarchy of brands under a parent company’s umbrella. Effective approaches to brand architecture typically intend to familiarize consumers with all the various brands in a company’s portfolio, helping prospective buyers understand the relationships and differentiating factors between the company’s product offerings. Brand architecture also aims to use any one product or service in the branded family as an introduction point through which consumers become aware of the company’s entire portfolio.

Marketers draw on a wide range of techniques to devise, implement, and refine brand architecture campaigns. When done correctly, brand architecture helps companies efficiently target specific consumer segments with specific branded products while reducing marketing costs and establishing a scalable, strategically sound framework for future expansion.

Background

While some large multinational corporations handle their brand architecture internally, companies often hire marketing consultants with specific experience in the field. In either case, the task of strategizing and structuring a company’s brand architecture falls to specialized marketing professionals.

Brand architecture can take a virtually limitless set of forms. However, marketers emphasize that most traditional strategies fall into one of three main groups: the monolithic brand or branded house, the endorsed brand or house of brands, and the pluralistic brand or hybrid brand structures. All three categories differentiate between two critical concepts: the master brand and the brand extension.

A master brand is a company’s top-level brand, which can be used to identify and collectivize all the other branded products and services offered by the company. For example, McDonald’s is a master brand that houses well-known products like the Big Mac and the Quarter Pounder. A brand extension occurs when a company uses a prominent, readily identifiable brand name to launch a new product or service in a different product category. The online multinational technology Apple Inc. used this type of brand extension strategy to launch Apple Wallet, a payment processing system that relies on consumer familiarity with the Apple name. An extension of the wallet, Apple Pay, is a digital payment option that allows consumers to make secure, contactless purchases. In this way, Apple used brand extensions and combined two branded products together to form a novel product. Another example is Breyer’s Ice Cream's decision to develop a flavor with Oreo cookie chunks. This combination represents a brand extension synergy of the well-known Breyer’s and Oreo trademarks. Monolithic, endorsed, and pluralistic brand architecture strategies all position master brands and brand extensions differently in an effort to achieve specific results.

In the twenty-first century, corporations have also embraced an emerging technique that uses the company’s name as a master brand platform. Hershey’s launched a high-profile example in the mid-2010s when it introduced a new marketing campaign promoting all its various chocolate products together in a single advertisement. Previously, the company had separated individual products like Hershey’s Kisses and Hershey’s chocolate syrup into dedicated ads. Marketing experts point to the emergence of social media and digital advertising as a driver of this new trend, as these technologies have impacted traditional notions of consumer brand awareness.

Overview

Monolithic brand architecture, also known as the branded house strategy, is built around a single strong, well-known master brand. The master brand’s name is used to identify the various divisions, subcategories, and brand extensions the company operates. Functioning as the most straightforward and logical approach to brand architecture, the branded house strategy helps consumers relate branded products and services back to a reputable and trusted master brand. The courier and delivery services company FedEx offers a widely cited example of effective monolithic brand architecture. FedEx operates many different types of branded products and services, including FedEx Freight, FedEx Express, and FedEx Office. Each of these branded services offers a different, highly specific function while still enabling consumers to easily identify FedEx as the underlying provider. Novel strategies that market a parent company’s entire family of branded products together in a single campaign are an example of the evolving branded house approach to monolithic brand architecture.

Endorsed brand architecture, or the house of brands, creates strong individual distinctions among the branded products offered by a single company. In a house of brands, the various branded products and services are separated and insulated from one another for strategic reasons. If consumers suddenly lose interest or trust in one of the brands due to bad publicity or scandal, negative impacts on other products in the house of brands can be minimized or avoided. A house of brands also allows a company’s branded goods to “compete” against each other for market share in a specific consumer segment. This ultimately benefits the parent company, since it earns a sale regardless of which particular brand a consumer chooses. Procter & Gamble uses endorsed brand architecture to manage its extensive product portfolios, which extend into many different consumer segments and markets. For example, Procter & Gamble’s family of hair care products includes the Pantene, Herbal Essences, Head & Shoulders, Nice ‘n Easy, and Natural Instincts shampoo brands. Each of these particular products is marketed to a specific, differentiated audience while still facilitating consumer crossover.

Pluralistic or hybrid brand architecture is the rarest and most complex strategy, and combines multiple approaches. In a hybrid model, the various brands in the company’s portfolio can be associated with each other, kept separate from each other, or both, depending on the company’s strategic goals. In essence, pluralistic brand architecture offers companies a way to combine and configure multiple brand architecture strategies. It can be used to link some products in the parent company’s brand family together while separating others, often to maintain an illusion of independence. Coca-Cola has generally favored a pluralistic approach to brand architecture. Some of its products, like classic Coca-Cola, Diet Coke, and Coke Zero, are united under a master brand name, while others, such as Fanta soft drinks and Dasani water, are separated and marketed under their own distinct names. Notably, hybrid brand architecture offers companies a calculated way to prevent, rather than promote, consumer awareness of the interrelatedness of their entire family of branded products and services.

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