J.B. Davis | June 20, 2022
If you’ve ever felt over-charged at a Ritz Carlton Extended Stay Hotel®, thought twice about sending an important package with Large Shipping Company®, or had an “oh, yuck” moment after drinking Coke Water®, two things are true: You’re living in an alternative reality because none of these offerings exist, and you’ve benefited from strong brand architecture frameworks.
Brand architecture is the second-most important element of branding (behind only brand positioning) because it’s ideally suited for growth-oriented objectives. Strong brand architectures can:
Those last two consultant-sounding terms, brand relevance and brand equity, are worth defining because they’re the rebars that keep the building solid.
The former relates to whether your brand is relevantly differentiated to your targets.This point is discussed in an earlier blog about Positioning. The latter is simply the accumulated good will your brand owns and what, within that “savings account” is comprised of.
Here’s how the two ideas would come together in a hypothetical example. A relevantly differentiated brand, water bottles built to withstand the blistering heat of summer baseball leagues, could conceivably extend into thermos for outdoor hockey players. But they would have a harder time going from baseball’s heat to yoga’s indoor climate. A strong brand architecture could support the former growth strategy, but no branding scheme could help with the latter.
There are broad frameworks of brand architecture, strategies within these frameworks, overlaps across frameworks, and many ways of making architectures work. There also are ways to weaken architectures through subsequent off-brand decisions. This blog will zoom in and out, hopefully without causing vertigo.
In a Branded House architecture, there’s an overall proposition that’s often called the Master Brand. The Master Brand drives purchases, and in the case of FedEx lends credibility to all the company’s expansions beyond its original overnight delivery offering. [It’s worth noting that for all the strategic rigor that underpins strong brand architectures, there’s no consensus on terminology. For example, some people use Corporate Brand or Parent Brand rather than Master Brand.]
Benefits: Expansions into new categories, segments cost, or use occasions require smaller investments because the new offering has a built-in advantage from the start; it taps brand equity to relevantly extend into new segments.
Limitations: Problems with one part of the portfolio can negatively impact other parts of the portfolio. In the shipping category, both FedEx and Old Dominion use descriptive names and color to distinguish its offerings, tried-and-true brand identity strategies.
In a House of Brands architecture, the purchase driver is at the brand level. Consumer companies such as P&G use this strategy to expand into new markets without having to consider potential impacts to the wider portfolio.
Sometimes the brand “above” the product brand, sometimes called a corporate brand, is neither prominent nor hidden – it’s just the place that makes the thing. In House of Brands strategies, it’s expensive to introduce, maintain, and expand a roster of individual brands. It also requires monitoring the number of line and brand extensions because, like a house, footprints can only be extended so far before they become unwieldly. Does Reese’s have a strong architecture or are there too many rooms?
Hybrid Brand Architectures, as the name suggests, allows organizations to adjust the prominence of the overall brand by target – or to not include it at all. Hotels are a great example. The only property within Marriott’s architecture to “just” use the name is their premium legacy offering. When they extended into the luxury category, they added the “JW”.
Marriott has been regularly cited as an early – and extraordinarily successful – adopter of brand architecture Check-out one brand in their house here.
It’s been extraordinarily successful because it’s based on the two growth-oriented objectives noted above: it creates “mental maps” to sort propositions across the company’s portfolio and it allows the company to extend the portfolio into new areas in ways that deepen relevance and protect equity.
Sub-branding – which allows companies to expand their footprint – is an important tool that’s in strong contention as the GOAT of branding.
David Aaker, who many credit as having popularized brand architecture as a strategy, defined sub-brands as any branded asset that extended the meaning of the original brand. Sub-brands are connected to but different from the original offering, often tied with brand identity elements such as typography and naming.
Diet Coke is a good example. It launched with a built-in advantage, realized ongoing benefits from its association, and expanded the meaning of Coke. Investopedia noted that Diet Coke owned the No.3 market share slot, behind only Classic Coke and Peps. As a tangible asset, Kantar’s most recent Brandz calculations put the value at nearly $13 billion. And while it’s a small fraction of sibling Coke – which clocks in at almost $75 billion - it’s a quantifiable asset for the Coca-Cola Corp.
Conversely, introducing “New Coke” was a brand architecture design flaw that almost brought down the house.
The potential monetary impact of brand architecture was the topic of conversations recently with a Falls & Co. financial services client. A limited budget to introduce an app as a free-standing offering meant that every dollar spent was particularly important. The original idea of branding functions within the app – a modified House of Brands – was abandoned in favor of a Branded House. Each function would describe the ways in which the master brand created value – a decision based on cost efficiencies.
There’s room for the app to brand components down the line, so maybe you’ll see another blog about it.
Architecture is a planning tool to support business growth. And without belaboring the metaphor too much, it’s more effective to use a tool when you’ve done pre-work before getting to the job site.
Understanding what problems you solve for your customers, knowing how they make purchase decisions, analyzing the growth trajectory of your industry, and surveying the visual vocabulary of the category are examples of invaluable information to building or strengthening a brand architecture framework.
With this information in-hand, business questions can lead to brand architecture solutions. Here are some examples:
At the end of the day – or as Diet Coke and others have demonstrated, at the end of the fiscal year – it doesn’t matter what framework you employ. It only matters if it helps increase sales today and creates a path for growth tomorrow.
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J.B. Davis is Director of Brand Strategy at Falls & Co. He has 20 years experience helping a wide variety of brands solve complex business issues. He’s partnered with large and small brands, worked in B2B and B2C categories, and worked on the client- and agency-side of our business. Contact us to learn more about how Falls & Co can help you use brand strategy to create business value.