What is Brand Architecture?
Brand architecture is not about building a house, but more about how you manage it. Is your master brand the driver or not? And who is Unilever?
Branding entails several different terms, which can be hard to distinguish from each other. As with other architecture, the metaphor of a house is a perfect fit.
What is Brand Architecture?
Brand architecture describes the organizations of the portfolio of a brand. What kind of structure has been put into place to optimize the individual parts of the portfolio. Some companies have several products, editions, models, and markets in their portfolio, but a structure has to be implemented to enhance them all.
It can be divided into a scale from House of Brand to a Branded House, with several entities in between.
House of Brands:
A house of brand describes a company portfolio, where the main driver of the brand is not the parent brand. The individual brands in the portfolio has the driver's seat, and do not seem associated to the other brand in the communication.
A prime example of this architecture is Unilever. While having a large number of brands in their portfolio, they have never given the parent brand Unilever the main position in their marketing.
House of Brands examples:
- P&G (Gilette, Tide, Oral-B, etc.)
- Yum! (Taco Bell, Pizza Hut, KFC)
Endorsed brands separates from a house of brands strategy in a specific way. The brands in a house of brands are all independent. As an endorsed brand, they are still independent, but the master brand is associated as a small co-driver of the brand. Endorsing a brand can benefit both brands associated.
When Nestle bought Kit-kat, they did not have a strong brand in the UK, but by adding a strong endorsement to Kit-kat, Nestle was now associated to high quality chocolate in the UK, improving their own branding. At the same time, Nestle helped endorse Kit-kat on other markets, where their markets share and branding might not have been so impactful.
Endorsed brands examples:
- Skoda (Volkswagen)
- Dove (Unilever)
- Nescafé (Néstle)
- McMuffin (McDonalds)
A shadow endorser is not directly connected to the other brands in the portfolio, but it is not a secret either. The link is known, but not endorsed directly in the marketing or communication.
The token endorser is similar to endorsed brand in the way, that an association is mentioned in the branding. Here the master brand will have more significance than the endorsed brand. Usually the token endorser have a big brand name, where the endorsed brand need some reasurrance in the market they have entered.
It is a requirement, that the token endorser is a well known brand in the market for the token endorsement to work.
Moving closer and closer to a branded house, we have the Linked Name endorsement. Here you can create a family of brands, who are all associated with the same linked name.
A great example of this strategy is McDonald's. Most products in their portfolio has a "Mc" in from of them. E.g. McMuffin, McNuggets, McRib, and so on. This creates a implicit relationship to the family of product, all associated with McDonald's
Linked name examples:
- McMuffin (McDonalds)
- Nescafé (Nestlé)
Sub-brands are an extension of the master brand, where both the master brand and the sub-brand are drivers of the marketing and communication. It varies in who will have the driver's seat, but in all cases, both brands will have an impact.
Several well known cases can be found, e.g. Microsoft Office, Sony Walkman, etc. Take Sony Walkman as an example. Both Sony's reputation and the branding of the new Walkman plays a role in the branding of the product. Quality and value from Sony, while Walkman exudes innovation and new thinking at the time.
Other Sub-brands examples:
- Lego Friends (Lego)
- Sony Playstation (Sony)
Lastly on the scale of brand architecture, we have the branded house. As the opposite pole of a house of brands, a branded houses focuses mainly on the master brand as the driver. Everything in the portfolio is branded after the master brand, which usually has a reputable name and a large portion of products within the same industry.
What is BMW's brand architecture?
BMW is a branded house, where the brand BMW is the main driver of the communication - The series of cars are co-drivers. Notice when you see a commercial from BMW, the ad is more about what BMW is as a brand, and not focused on the series or model.
Other Branded House examples:
- FedEx (Express, Ground, etc.)
- Virgin (Music, Fitness, Music, etc.)
What kind of structure is the best brand architecture?
While all categories have pros and cons, there is not one solution fits all for brand architecture. It depends on the brands, the history, the industry, and how reputable the master brand is in the first place. Several brand architectures can also be used within an organization at the same time.
Unilever has great success with running a house of brands, where they can acquire more companies over time, and implement them in the portfolio as they are. Then they can use the benefits at scale to improve the newly acquire part. At the same time, BMW has run a successful branded house for decades. With the master brand as the main driver, they have secured a world-class brand in their name.