Knowledge Base

Brand Architecture: House of brands or branded house. Man, have things changed.

In school, most of us were told that in brand architecture, there were two models: The House of Brands (Proctor and Gamble, Unilever etc. – every product is individually branded) and The Branded House (Nabisco, Johnson and Johnson, etc.- each product or brand leverages the value of the parent brand name)

Man, things have changed since then.

In a meeting at one of the Brand Establishment shops in California a few years ago, one of the smarty’s there produced a document that suggested that there were five models. He described them as Monolithic, Endorsed, Product, Umbrella, and Hybrid. This, of course, drove me strait to Wikipedia where I found three models described there as: Corporate, umbrella or family brands, Endorsed brands and Individual brands.

OK, lets sort this out.

But first, lets talk about why things have changed or evolved so rapidly in just a couple decades. The feedback I get is:

• Growth through acquisition, (lots of corporate raiding in the eighties, roll up’s and, during recessionary times, cash-rich companies, scooping up cash poor competitors)

• Consolidation (too many competitors in a category so mergers make sense)

• Line extensions acquisition (companies finding it easier to buy a product that fits their category growth plans that was developed outside, rather than underwriting a research and development group in house)

• Global expansion. (When a company wants to peddle its products overseas, and may need to rename or re-brand for cultural or audience preference reasons) 

And there are plenty a good reason why companies and organizations should be looking at brand architecture as a strategic business move today.

1. Brand Architecture modeling creates a logical system of organizing and naming brands, products and services in a way that helps audiences form a set of expectations about a particular offering in a company portfolio and the brand as a whole.

2. A well-designed Brand Architecture will:

• Provide for maximum brand value leverage of both corporate and sub- brands

• Define strategic guardrails for both corporate and sub-brands

• Reduce barriers for growth through acquisition

• Provide guidelines for brand extensions, sub-brands and new products

• Provide strategic direction for the identity system/design language

• Create a logical hierarchy that will enable customers to understand the underlying value proposition of the product or service under consideration

3. An effective brand architecture system provides a structure to the brand family, allowing consumers to establish expectations and perceptions of the entire brand family based on what they know about one or some of the individual brands.

Given all this, let’s look at the model's suggestions:

The Monolithic Brand - uses a single name across all products and services offered by the company. Virgin Group is a good example. Virgin Airlines, Virgin Mega Stores and so on all have a brand common denominator - unconventionality. It all starts and ends with the personality and style of Virgin founder and CEO, Richard Branson – a very unconventional corporate head. (Virgin slide)

Endorsed Brand - sub-brands that are linked to the corporate brand by means of either verbal or visual endorsement. When you see a Post-it Note pad you’ll also see a 3M logo.
(3M Slide)

Product brand – Each product or service is individually branded, but the parent brand gets little or no prominence. P&G/Unilever/Altria etc. (Altria slide)

Umbrella Brand – a brand name is used to span across a range of sub-brands, all from the same category. FedEX Ground, FedEX Express, FedEX Freight, even FedEX Office.
(FedEX slide)

Hybrid brand – utilization of a brand architecture that incorporates more than one system for a specific strategic rationale. The best example is Disney. Though known for G rated and animated films, sometimes they will produce an R rated movie through Miramax or Touchstone. (Disney slide)

There is even a sixth model and that I recently uncovered – GE is a hybrid - umbrella model.

So, which one is best for your business? That’s a little harder to pinpoint, but start with a study of your competition. Try to understand what, if anything, they are doing. Since brand architecture is a relatively new corporate strategy, most models are more intuitive than well planned. You will quickly see that there is room for some leadership here and the perfect place to position your business.

Now apply your business, brands and products to the various models to see how they look, feel and fit. The answer to which is: the best fit is the model that allows for the maximum parent (unless product model is desired) brand value leverage, while, at the same time, reduces or eliminates the barriers for growth.

Now, just because you like the looks of a brand architecture org chart, that may not be the right answer. You must first know and understand your own brand. I mean who your company is, what you do differently, and what your brand is capable of becoming. Then use that as your brand lens before making a decision. Or, better yet, because this is a big strategic decision for the future of your company, contact a Brand Establishment shop (www.brandestablishment.com) for expert counsel. Because man, things have changed.

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• Jim Hughes is the Founding Partner of the Brand Establishment and has developed hundreds of brands in almost every business category during his career. He personally created and developed the BE’s proven Turning the Telescope™ Discovery process as well as the 21st century small agency business model: Small+Smart™.