When a company’s growth strategy involves acquisitions or extending its brand into other categories, a well-defined brand architecture system must be defined to ensure customers, employees, and channel partners understand the relationships between the parent brand and its sub-brands.
Brand architecture provides for a logical system of organizing all brands in a way that helps audiences form a set of expectations about each brand’s unique offering. Architecture can take many different forms that emphasize or de-emphasize the corporate name and image, create new brands apart, or alongside the parent brand, or it could be a unique combination of each. The best system for managing your portfolio of brands will be largely based on your overall business strategy. Failing to define and execute the right system will erode critical brand metrics of your parent brand and sub-brands, such as brand understanding, clarity, credibility, relevance, and worst of all, brand consideration.
The benefits of creating a well-defined system to organize a portfolio of brands couldn’t be more obvious. Internally, employees will benefit from understanding the strategic direction of the company, and they will also understand how to cross-sell different brands to deepen current customer relationships. Additionally, brand architecture:
• Provides for maximum brand value leverage of both corporate and sub-brands
• Defines strategic guardrails for both corporate and sub-brands
• Reduces barriers for growth through acquisition
• Allows assessment of which products and/or services fall within the designated system
• Provides guidelines for brand extensions, sub-brands and new product launches
• Provides strategic direction for the identity system/design language
• Creates a logical hierarchy enabling customers to understand the value propositions of products or services under consideration
Before any brand is created or acquired, special consideration should be given to the following questions and how they are answered:
1. What is the purpose of adding the brand?
2. How does this expansion align with our growth and business strategies?
3. Is our parent brand strong enough and stable enough to add another brand to our portfolio?
4. How will the addition of this brand enhance the parent brand and other sub-brands?
5. Why will this additional brand succeed?
6. How will the addition of this brand help to strengthen relationships with customers and partners?
7. How will we define the relationship of this new brand with our parent brand and other sub-brands?
8. How will the addition of this brand make us more attractive to investors?
9. How will the brand and its relationship to the parent brand be introduced to employees, customers and our partners?
10. What is the brand strategy behind this expansion?
11. What is the marketing strategy behind this expansion?
12. What are the risks if the expansion fails?
13. What is our brand recovery strategy if the expansion fails?
Four Unique Systems
Below are four of the most popularized and widely used brand architecture systems. Note how each is unique from the other, and think about which system may represent the best fit for your strategy:
In rare instances, a hybrid system may be used. As you can probably guess, hybrid involves the use of two or more of the above systems and is rare because 1) It is the most difficult to manage effectively and profitably, and 2) it is a system that typically very large conglomerates fall into based on the individual successes of their individual brands or business units. GE offers one of the best examples of the successful use of a hybrid system.
If you’re at the intersection of making a decision on which architecture system is best for your company, send us an email or give us a call.