Displaying items by tag: House of Brands

Many organisations house more than one brand within their portfolio. This may have been strategically planned or may have come about as a result of a merger or acquisition. It is important that each brand has a specific purpose, does not overlap or cannibalise other brands within the portfolio and maximises the market reach for the organisation.

A brand architecture review can help organisations streamline their brand portfolio so as to maximise return on investment and minimise confusion in the market.

There are a number of brand architecture models that may be appropriate; a review of your brands can help ascertain which model is right for your organisation.

To learn more about the various brand architecture models, download our e-book – An Introduction to Brand Architecture. This e-book outlines the various models, along with the pros and cons of each. Understanding whether your portfolio suits a master brand, branded house, house of brands model or something in between will unfold as you delve into the considerations and review the specific roles of each of your brands. 

Some of the key considerations you will need to assess when undergoing your brand architecture review are:

1. How many brands are appropriate for your organisation?

The more brands you have the more thinly spread your marketing budget will become. A good first step in a brand architecture review is to logically assess the number of brands you need verses how many you currently have.

A disorganised and inconsistent brand portfolio may have evolved organically over time with little structure or discipline as to how brands are treated, presented or managed. This can lead to a multitude of inconsistent identities and possibly a lack of ‘daylight’ between brands. The development of products, services, campaigns or programs can become less cost effective and the lack of clarity can make it difficult to grow a company’s profile. Low brand awareness and equity will often stem from managing multiple brands, as audiences generally find it easier to remember fewer brands.

Depending on your strategy and starting point, in general terms, less is more when it comes to the number of brands required to be managed.  A master brand strategy presents a singular brand promise, consistently applied. It offers efficiencies for new product development complementing brand-building initiatives. In a master brand strategy, the approach to singularity of message underpins all brand decision making, maximises cohesiveness across the offer and provides the decision-making mechanism for brand extensions. Additionally, the application of a singular visual identity system minimises the investment required and makes it easier to manage. These efficiencies of a master brand strategy also come with compromises and limitations as it relates to entering new markets, launching new products and reaching new audiences.

For global B2B professional services organisations such as Deloitte, the master brand strategy offers the opportunity to provide a suite of services across functions, sectors and geographies with one voice. It allows the flexibility to add new services over time without diluting its brand or confusing the market. Aligned, integrated and well-coordinated, the master brand strategy allows organisations like Deloitte to earn the right over time to add ever more divergent services to its suite under the existing brand.

At the other end of the spectrum, in the house of brands model, it is the individual product or service brand - rather than the central, owning parent or corporate group – that is the source of brand identification for target audiences. This model allows for flexibility, as each brand under the parent brand operates independently under their own individual business strategy. As such, each standalone brand feeds back to the parent and feeds into their business strategy as one component of many. The owner, umbrella or corporate brand often remains invisible to consumers, as there is little inherent value in highlighting it. The model requires greater levels of investment in new product development, marketing and ongoing maintenance.

For example, Google introduced its parent brand Alphabet to function as a corporate holding company that enables Google and other entities within the portfolio including Calico and YouTube to build their own equity. Alphabet is, therefore, free to acquire and expand its portfolio as the opportunities arise.

2. How well do your brands fit together?

Understanding how all brands fit and work together enables companies to better target their key audiences, including internal stakeholders, and build brand awareness more effectively to avoid brand overlaps and the duplication of internal effort.

Brand distinction, in terms of quality or features, is one way to ensure that customers aren’t interpreting your brands as too similar, whereby the price becomes the determining factor in decision-making. When customers experience difficulties understanding the full scope and relationships between brands, they are restricted from fully connecting with the brand and are also more likely to make price-based purchasing decisions or search elsewhere. Attention spans are undoubtedly low and brands need to be aware of this when it comes to the organisation of their brands.

A branded house, endorsed brand or sub-brand model may be suitable in these cases – allowing the brands to borrow equity already earned by the parent brand and enable consumers to gain more clarity on the distinction between each of your brands.

A good example of this is Virgin Group, the core brand equity is dispersed across a portfolio of non-competing offers. Virgin’s portfolio scope is enormous, yet its core brand capabilities are never lost, despite continually extending into new markets. Each brand generates an immediate market positioning based on the perception of the parent brand, a unified identity that is easy for consumers to recognise and recall.

3. How clear is your brand structure?

Without clearly defining the roles and relationships of your brands, employees are more likely to interpret them as they see fit.  This may lead to internal competition and conflicting views that can be improved or prevented by a clear brand structure.

The key purpose then of brand architecture is to facilitate customer and employee understanding of a company’s range of offerings and simplify the buyer’s decision-making process to minimise audience confusion.

Testing your proposed new brand architecture structure through brand research will help you ensure you succeed in implementing a model that works both internally and externally.

4. Is your brand architecture flexible enough to grow with?

A brand framework that has been designed for today without adequate thought given to future considerations – mergers, acquisitions, brand collaborations and product shifts, just to name a few – inhibits the growth of a company and isn’t responsive to industry trends or the ever-evolving landscape of the marketplace.

Brand architecture is a critical factor within the context of acquisitions, where companies intend to grow their scale, competencies and geographical presence. An inflexible brand structure, one which has failed to consider future business expansion and is too fixed to accommodate any kind of change, can hamper a company’s potential to grow strategically and maximise the value of its acquisitions. Unrealistic expectations surrounding acquisitions; that the new entity can merely co-exist alongside the company’s existing brands, can negatively impact organisational efficiency, as the costs often outweigh the benefits without a suitable architecture strategy to integrate and leverage the new brand assets.

Your brand architecture is always most efficient when it is aligned and reflects your business strategy with consideration given to the relevance of your brands to meet your objectives.

For house of brand companies, achieving market dominance with a large number of brands has resulted in companies like Unilever pruning their portfolios by reducing costs and complexity to increase efficiency. It is always worth articulating the costs of inefficient brand architecture, as this has a ripple effect. 

How to kick off a review?

At BrandMatters, we specialise in simplifying complex brand architecture so that it provides a positive return on investment and ensures the essence of each of your brands is clearly articulated and understood.

Contact us to discuss your brand portfolio and how it can work more efficiently and effectively.