Your choice of brand architecture has a strong influence on your organisational structure and your corporate marketing strategy: it affects how your organisation operates.
When you are developing a brand, someone in your organisation must meet the definition of a brand master; that is an individual who ensures that there is the necessary cohesion across your organisation’s divisions and territories to ensure the brand’s success.
The more a company moves to the position of a ‘branded house’, the greater the amount of cohesion required.
A brand master looks after brand values, not just the physical attributes and functional characteristics of the brand.
Developing a brand architecture is a critical responsibility of the brand master and other senior managers in your organisation. So what are the different types of brand architecture?
The Product Brand Strategy
This is the traditional ‘House of Brands’ approach. An organisation’s products and services have individual brand names and brands have uniquely identifiable facets. Facets include brand symbols, logos, concepts and statements.
In the product brand strategy a brand name is associated with a single product. The brand distinguishes that product from others in your range. The brand has its own significance and meaning. It has exclusive positioning in the market.
An example is the Accor group of hotels. The group has numerous hotel brands including Sofitel, Ibis, Suit Hotel, Formulae 1 and Motel 6. Each brand has a unique identifiable market position. Consumers may actually find it difficult to identify that each of these hotel chains belongs to the same corporate group.
In the extremes of the product brand strategy, a brand has an exclusive market position. The brand is its own market category. The product is so specific and unique that there is no other name for the category than that of the brand. The brand may be protected by patents and other intellectual property rights.
Usually in such an exclusive position, brand extension can only be achieved through reformulation of products.
A product brand strategy has the following advantages:
- If your business is focused on one market segment, it is a strong offensive strategy with the aim of market domination
- It is a strategy which allows each of your products to occupy different market segments with specific needs and expectations
- It is a strategy to consolidate market share by becoming a category leader.
- Your corporate name becomes discrete, if not hidden. The focus is on brands, not your corporate identity.
- The strategy can be used by innovative brands looking to pre-empt a market position i.e. to be the first brand in a new market or segment.
- A unique brand identity helps consumers perceive brand characteristics
- A product brand strategy allows risk-taking as the risks associated with one brand do not infect other brands in an business’s portfolio.
- It allows a firm to dominate shelf space at retailers leaving little room for competitors and new entrants. Think of your local supermarket cereal aisle, how much space is taken by Kellogg’s products?
However, there are drawbacks to a product brand strategy, predominantly economic drawbacks.
- A product specific brand strategy can be expensive and it is not for the faint-hearted or businesses with tight finances.
- It is a strategy which offers increasingly narrow segmentation options and which hinders rapid return on investment.
- Often high sales volumes are required to justify the costs of the strategy.
- It is not a suitable strategy for small or saturated markets.
The product brand strategy requires firewalls between brands. These firewalls prohibit the development of a halo effect where the reputation of one product or brand does not assist the reputation of others in the brand. Economies cannot cross brand firewalls.
The Line Brand Strategy
This is a variant of the branded house approach where a single brand name is used for products in different categories. One consistent and coherent response is used across market segments. An example is L’Oreal Studio line, where the brand covers a range of hair products from shampoos and conditioners to hair gels and waxes.
The line brand strategy is often the result of successful brand extension.
There are multiple advantages to the line brand strategy:
- It reinforces the selling power of a brand.
- It facilitates further brand extension
- It reduces launch costs of extension products
- There can be a halo effect where the reputation of existing products in the line is transferred to new additions to the line.
However, there are also disadvantages. in particular there are limits to brand extension strategies. Extension products should have a clear link to existing products which is understandable by target consumers.
Range Brand Strategy
This is the strategy used by firms such as Campbell’s Soups and Black and Decker power tools. All products are linked through a core brand principle, the brand concept.
Range brand strategy has the following advantages:
- It avoids a random spread of external communications concentrating focus on a single brand name.
- It creates brand capital across a range of products.
- Consumer messages are concentrated on core products but the concepts contained in those messages can cross to peripheral products in the range.
- A range brand strategy can make it easier to distribute new products as retailers and wholesalers trust the brand’s existing reputation.
A range brand strategy has the following disadvantages:
- It increases brand opacity as the number of products in the range expands. Consumers can feel that there is less choice available in the market
- The range brand strategy can dilute a brand identity and can lead to the need to devise intermediate brand identities. Findus, the now defunct frozen food brand had such an issue which led to the development of its Lean Cuisine, Gourmet and Seafoods intermediate brands.
Maker’s Mark Strategy
Brands such as Laughing Cow and Bel cheese use a maker’s mark strategy. Often such a strategy derives from a historical symbol used to identify the products of a specific manufacturer of a generic product. The brand relates to the manufacturer, not the product. The oldest trademark in the world, the Bass Brewery red triangle began life as a mark used to identify barrels for collection at Taverns.
Endorsing Brand Strategy
Firms such as General Motors use an endorsing brand strategy. General motors owns several brands of car including Pontiac, Chevrolet and Buick. But the GM brand is used to link these entities at dealer networks.
In this strategy the main brand promotes consumer choice whilst the endorsing brand assumes a secondary, supportive position.
An endorsing brand strategy allows freedom of movement as brands are introduced or dropped from the corporate portfolio. The endorsing brand may have less equity than the individual brands but it can evolve a powerful image capable of being recalled by consumers. It can be an economical way to give substance to a corporate identity and a way of ensuring technical assurance for a brand.
Often the Endorsing brand strategy involves the development of a brand hierarchy:
- The endorsing brand is a quality guarantee
- The individual brand concept creates a specific promise
- The brand creates distinction, personalisation and even pleasure.
Umbrella Brand Strategies
The flexible umbrella brand creates a single brand level where products are given separate identities. Apple uses such an approach where desktop computers are Macintosh; Laptops are Macbook, tablets are iPad, music players are iPod and mobile phones are iPhones. An umbrella brand can cover several product categories and give a unified identity to a highly diversified range.
Inflexible umbrella identities gives subsidiaries a significant amount of autonomy. This can be useful when looking to capture market share. The brand is a corporate identifier not a product specific mark. For example, the Mitsubishi trademark can be found on cars, electrical goods and even ships. Communications are based on product attributes and advantages. The umbrella brand may appear distant and cold. The brand identity can be diluted. With luxury brands, an umbrella brand identity can communicate common attributes to consumers.
To align umbrella brands, there is often the use of a ‘Masterbrand’. This appears similar to the endorsing brand strategy but in this case the parent brand dominates. This is a branded house approach where the Masterbrand provides a frame of reference and sub-brands align to embody the Masterbrand. The prototype Masterbrand was Nivea where a wide range of branded products is collated under a single concept; love and care.
A Masterbrand structure can create significant market power and economies of scale.
Source Brand Strategy
This strategy is similar to an umbrella brand strategy. In this strategy the over-riding brand is more than a simple endorsement. It is the brand which holds sway and which gives individual products a seal of approval. It is a strategy often used in the perfume and fashion markets e.g. Polo by Ralph Lauren or Jazz by Yves Saint Laurent, However there is a danger that a source brand may devolve to become an endorsing brand.
A source brand can give a sense of difference and depth however the need to reflect the core identity of the brand gives strict boundaries that make brand extension difficult.