How Brand Architecture Works and Why You May Need One

Say you opened a cleaning service company catering to private homeowners. As your business grew, you extended your services to corporate clients. Three years later, you added a laundromat and a car wash to your lineup. Suddenly, you find yourself juggling different cleaning services for people, and managing your business isn’t as easy as it once was.

Whether you’re a startup or a small to medium enterprise (SME) looking to scale, you may benefit from a B2B brand architecture agency or a B2C brand architecture to help you navigate the complexities of optimizing multiple brands. Read on as we unpack the brand architecture definition, how it works and why you need one.

For a brand architecture to work, you will need to have three components in place, namely:

• Parent brand. Sometimes called the master brand, it is the head of all the minor brands in the company.
• Sub brand. Subsidiary or minor brands that are under the parent brand but develop their own brand identities and cater to a niche.
• Extensions. Brands that leverage the credibility of the parent brand to get a boost in the market.

A brand architecture strategy serves as the roadmap that shows where multiple brands sit within a company, what role each brand will play, and how they will relate to one another, including company culture. It is instrumental in managing end-to-end brand performance and development, guaranteeing that everything remains in place as you grow your business. Brand architecture also touches on setting values and the company culture that ties with all your sub brands.

Think of it this way: a building or residential architect creates the master structure design of infrastructure, ensuring a balance between functionality and aesthetics while meeting the needs of its occupants. Similarly, brand architecture aims to help stakeholders and business leaders foresee and satisfy the needs of your brands and its consumers.

Below are the main reasons that demonstrate why it matters.

Improves Overall Marketing Strategy

Strengthening your brand requires a well-thought marketing strategy to help boost image and brand value. And implementing marketing strategies can be a bit more tricky if you throw in more than two brands in the mix at once. Because you have different teams working on different brands, you may risk strategies clashing with each other, especially if some products have overlapping markets.

Following a brand architecture helps you understand how each brand functions and co-exists. It is also instrumental in identifying opportunities in one brand and how other brands can benefit from them. With these in mind, you become fully equipped to create a holistic marketing strategy.

Boosts Brand Performance

All brands should receive enough attention for better management, but truth be told, it’s unavoidable sometimes to overlook one or two brands. Unfortunately, when this happens, you end up with brands becoming a liability rather than an asset.

Leveraging brand architecture reduces the risk of this happening as it brings focus to each brand and its brand positioning in the market. It gives you a bird's eye view that helps identify which brands need a revamp or an upgrade. Brand architecture research also informs you which strategies are effective and if they apply to others.

Provides Clarity Between the Parent Brand and Minor Brands

Sometimes, your workforce can get confused about how your brands relate to the parent brand and one another. And if your employees are confused, imagine how much more muddled it would be for your consumers.

Think of your brand architecture as a map of how each brand functions. Without it, you may pursue multiple directions and achieve the wrong results. Your strategy should be communicated internally and externally, especially when launching or acquiring new brands.

Doing so effectively defines the brand architecture pyramid, from a brand’s product attributes, product benefits, and emotional benefits to its brand personality or characteristics that buyers can relate to and brand essence or the essential value of your brand.

Facilitates Efficient Resource Allocation

It optimizes the use of resources. Providing an overview of how each brand functions and performs enables strategic decision-making about where to invest resources for the greatest return. Brands that are doing well may require less attention, while underperforming brands can be strengthened with more focus and investment.

Enhances Customer Perception and Loyalty

This helps create a more consistent and unified customer experience across different brands. It ensures that each brand's identity and values align with the overarching company values, fostering a sense of familiarity and trust among customers. This can increase customer loyalty and retention, benefiting the overall brand portfolio.

Below is a breakdown of the types of brand architecture models and examples you can learn from.

1. Branded House Architecture

Branded house architecture is when sub brands operate under a single parent company, also called a one-firm brand. You may encounter this brand architecture model among companies with products that are slightly different from one another.

For instance, consider a gym apparel shop that offers various items, from activewear to shoes and other accessories. In a branded house approach, instead of creating separate brands for each product category, the company can use one brand to encompass all products, though with slight distinctions.

Popular brands that use the branded house model include Coca-cola, BBC, and Virgin Companies. Fans of the American beverage company Coca-cola are familiar with its three main varieties: Classic, Diet, and Zero. To maintain seamless branding, Coca-cola decided to build the product lineup’s identity under Coke, thus giving you Coke Classic, Coke Light, and Coke Zero.

BBC or the British Broadcasting Corporation also has different channels for varying topics, like BBC Knowledge for science, travel, and history shows, the BBC Lifestyle for health, fashion, and food shows, and BBC Brit and BBC Canada for British and Canadian viewers, among others.

Virgin Companies has expanded beyond providing airline services and has now dabbled in other industries. In addition, Virgin Active offers health and wellness services, Virgin Money provides digital banking services, and Virgin Galactic is the world’s ‘first commercial spaceline.’

Through branded house architecture, Virgin was able to sustain its reputation as a leading company by being consistent with its brand essence, no matter the industry they pursue.

Why It Works

Using one name for all products makes building brand familiarity or recognition easier. In addition, it allows you to streamline all your resources and strategies to one brand, which can lead to a higher chance of success. Once the credibility of the parent or master brand is established, brand trust increases and drives brand loyalty among consumers.

However, branded house architecture isn’t ideal for everyone. For starters, when your parent brand encounters major public relations issues or other challenges, it can be tricky to protect your other brands. And big brands are not immune to such disasters.

In 2016, several reports of Samsung’s newly launched Galaxy Note 7 exploding due to faulty batteries made the news. As a result, the model was banned from flights worldwide, which scared potential buyers even more. Consequently, the brand’s operating profit across all models significantly dropped by a whopping 96 percent.

Fortunately, the brand swiftly owned up to its mistakes and launched a product recall. Samsung also re-assessed its product quality process and took extra measures to improve it.

If you plan on adopting a branded house architecture, you’ll need an empowered and united team with a strong commitment to delivering the best product and experience possible to your consumers.

2. House of Brands Architecture

If branded house architecture uses the parent brand for all products and services, house of brands architecture allows you to create individual branding for each product you offer.

You may be familiar with Pampers, Downy, Tide, Gillette, and Head & Shoulders. But did you know that these brands are all from Procter & Gamble? The largest consumer goods manufacturer in the market has incorporated this framework in its brand management strategy, with over 60 individual brands under its wing.

Another brand that has done quite well with the house of brands architecture is French cosmetics and personal care brand L’Oréal.

While the brand is known for its extensive line of L’Oréal products—from facial wash to foundation, concealer, and lipstick, among others—it also has other popular sub brands that have a separate brand identity from the parent brand.

These are La-Roche Posay, Garnier, NYX, Maybelline, and many more. L’Oréal’s decision to create a house of brands model allows the company to develop and deliver products for a wide range of consumers.

Why It Works

House of brands architecture is ideal for firms targeting diverse markets, allowing for experimentation across niches. It safeguards the main brand from failures and allows for easy brand discontinuation without impacting others.

However, it demands establishing multiple smaller brands, requiring significant resources and potentially complex management. Despite sub-brands' individual branding, alignment with the company's core brand and goals ensures smoother implementation.

If aiming to merge the benefits of different architectures, consider endorsed brand architecture.

3. Endorsed Brand Architecture

Considered the hybrid brand architecture, endorsed brand architecture provides a balance between the branded house and the house of brands architectures. It allows you to create individual brands for your endorsed brand with a push from the parent brand. It’s like saying, “Our endorsed brands are as good as our main brand.”

The result? The brand equity or the value of a brand in a consumer’s mind goes up without starting from scratch. Take Marriott International, a hospitality service conglomerate that has etched its name worldwide for its excellent hotel and residential experience.

When travelers look for hotels, they are less likely to doubt the quality of service they will get when they see ‘by Marriott’ attached to the hotel’s name. Marriott’s brand portfolio consists of the luxury hotels The Ritz-Carlton, Delta Hotels Marriott, and Fairfield Marriott to the more affordable Courtyard Hotels by Marriott.

Another great example is tech giant Microsoft. For decades, Microsoft has provided innovative products that include personal computers, smartphones, business solutions applications, software, and even video games. And with Microsoft included in the brands’ names, consumers are more confident in buying them.

Why It Works

Launching new brands benefits from a reputable parent brand, aiding in gaining consumer trust.

While there's control over marketing, crucial decisions rest with the parent brand. However, this can complicate processes without sufficient support, and similar to branded house architecture, sub-brands risk criticism when parent brand performance falters.

Each architecture has pros and cons requiring careful consideration. Use these insights to guide your brand architecture establishment.

4. Hybrid Brands

Hybrid brand is a strategic blend of the Branded House and House of Brands architectures. It bridges the benefits of both structures, offering flexibility while maintaining uniformity.

This architecture is typically used by organizations with a strong parent brand and several distinct sub-brands catering to different market segments.

A quintessential example of hybrid brandis FedEx. FedEx is a highly recognizable brand but has distinct sub-brands such as FedEx Express, FedEx Ground, FedEx Freight, and FedEx Office.

Each sub-brand operates in its special market but also benefits from the overarching brand recognition and trust associated with the parent FedEx brand.

Why it works?

This architecture allows companies to leverage the reputation of the parent brand while capitalizing on the unique value propositions of the sub-brands. The parent brand offers credibility, which can provide an advantageous position for the sub-brands in the market.

By operating distinct sub-brands under the parent brand, a company can appeal to diverse market segments. Each sub-brand can be tailored to meet a particular demographic's specific needs and preferences, thereby broadening the company's overall market reach.

Hybrid brand can shield the parent brand from potential negative impacts. If one sub-brand encounters a reputational issue, it's less likely to affect the parent or other sub-brands severely.

Marketing resources can be deployed more effectively as the strong parent brand necessitates less promotional effort, freeing resources for sub-brand-specific initiatives.

1. Design Your Brand Architecture Around Your Target Audience

Brand architecture can take time, effort, and resources to establish, so you may want to use it right from the start.

The first step is to conduct thorough research on your target audience. While it can be easy to misconstrue brand architecture as exclusively an internal affair (i.e., management), it also concerns your target market. The development of your products and services relies heavily on what your audience needs and how you want to be perceived.

Knowing your target audience ensures that your brands follow your overall brand management strategy. As a result, it becomes easier for you to determine the value of your brand to your buyers.

Review past data from your digital channels and other offline touchpoints, like customer walk-ins or direct calls, and look for any changes in their behavior or unmet needs. Listen to their feedback and assess how to improve your product iteration, planning, design, and product development process.

In a nutshell, having an intimate knowledge of your target audience helps you read their minds and anticipate their needs. This information then becomes the hallmark of your branding strategy.

2. Assess your business and map out your goals

Businesses can evolve and bring changes that impact your brand. And if you are competing in a fast-paced industry where inconsistent brands can lose to others in a snap, you may want to start keeping a close watch on how your business performs. Doing so is vital in developing an efficient brand architecture that aligns with your business goals.

For this reason, you need to conduct periodic business performance and process audits, which involve examining how your teams operate from all facets. An audit process should answer the following questions:

• Which processes work and do not work?
• What specific problems need to be addressed, and how?
• How can you optimize your processes to boost your business’ performance?

Armed with such knowledge, you can start mapping out your short and long-term goals with brand architecture in mind. Think of how your chosen brand architecture can help achieve these goals in the long run.

Assessing your business can be a painstaking process, but it can save you from making crucial mistakes when implementing a brand or business strategy.

3. Be realistic and plan your resources.

Optimism can do wonders, especially when your business is at its early stage. But it is best to keep things real when allocating your resources.

For example, while the house of brands architecture may seem attractive to you because it allows room for autonomy for each brand, it is not cheap to implement. Depending on the brand audience and the competition in each market, you may need to shell out more than what you’re prepared for. You also need different yet cohesive marketing strategies to boost each brand without confusing your consumers.

Business and financial analysts can also lend you a hand when it comes to foolproofing your business strategies. They can review historical data and provide concrete steps that you can take to optimize your resources.

4. Sketch a blueprint of your idea

A test to see if your chosen brand architecture framework is viable is by visualizing it. Start by assessing your brands and fleshing out their key benefits. How does each brand or product relate to one another? Is there overlap, and are there redundant products you need to get rid of?

Sketching a blueprint also shows if your brand architecture adheres with your overall brand strategy. At this stage, your goal is to visualize the bigger picture of your branding and see if it can continue to grow in the long run.

Remember that if you need a brand architecture change, it can impact how you manage things internally and the customer experience you provide. Therefore, as a business leader, you must discern which brand architecture defines your long-term vision best.

5. Create a decision tree to help manage your brand architecture

A decision tree is an essential tool in your brand management process. While it doesn’t provide solid solutions, it gives you a deeper insight into what risks you may encounter and how to mitigate them. It also fleshes out ideas and the chances of success based on solid data.

Let’s say a health and wellness company has decided to re-launch one of its products as it hasn’t gained much traction in the market for the past six months. A brand relaunch may mean starting the branding process from square 1, which will require much time and resources. The company also has to consider the financial risks and how stakeholders may respond to the said decision as resources will need to be increased or moved from other brands.

With a decision tree, you can fully view multiple possible scenarios moving forward. It breaks down what your alternatives are and their pros and cons. This makes brand architecture management less complex and reduces mistakes from happening. Of course, this is not a fool-proof tool, but it is highly instrumental in your decision-making.

Branding is an integral part of a business that requires a systematic and strategic approach, from iteration to implementation and development. Unfortunately, brand architecture is something that business leaders push back with the notion that they wouldn’t need it until multiple brands are available. And this can hurt your brand.

Brand architecture serves as the foundation of your whole brand, which is best established from the get go. As demonstrated by renowned products, it is what defines the future of a brand.

To recap, having a brand architecture in place strengthens your position in the market, unifies your parent and sub brands, and increases corporate brand performance. All of these combined can result in revenue boost, a healthier company culture, and long-term growth.

Looking for a brand architecture agency? Let our team of experts take the lead in navigating your branding needs with ease