Written By: Tammy Drost
Brand architecture is the structure that defines the breadth and depth of your brand by providing clarity around the organization of your offerings and how consumers understand them. It shows us how the parts of a whole are organized, related, and communicated. A company’s brand architecture specifies which names, logos, and messaging to apply to new and existing products. It also influences customer behavior by maximizing the transfer of brand equity between your brands and sub-brands.
Brands owned by the same company can be independent or related. One brand can endorse another, or a sub-brand can have greater specificity than its parent brand. The parent company’s name can be used to market the product or left out entirely. From an internal standpoint, a solid brand architecture is critical to helping marketers understand how to keep parts of a brand separate when needed while providing a framework to work collaboratively to boost one another in the marketplace.
As companies grow, merge with others, acquire new companies, build partnerships, and pivot from their original purpose, brands become diluted and product offerings ambiguous. Branding, naming, trademarks, legal matters, licensing, compliance, co-branding, and marketing decisions become complex.
The ten steps below help you get started in mapping out your brand architecture.
Step 1: Know Your Audience
Who is your primary, secondary, and tertiary audience? Is your audience national, global, or both? What does each audience need to hear to engage with your organization positively?
For example, the following audiences need to understand:
- Consumers: The depth and breadth of your business offerings so they are more likely to expand their relationship with your organization and generate more business
- Business prospects: The products, services, and value you can bring to them to increase your chances of attracting them as customers
- Employees: The organization to be more productive, become brand ambassadors and socialize your company values within the communities they touch
- Financial community: The scope and value of your company to give it the proper attention and valuation
- Business partners: To better grasp what your company does to bring your brand added value and opportunities
- Media: The correct perception of our company to communicate to their audiences accurately and more favorably
Step 2: Develop a Clear Business Vision
The most successful brand architectures have a powerful business rationale behind them. Below are some goals to think about.
| Short-Term Goals | Long-Term Goals |
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Step 3: Evaluate Our Existing Equity
Know the equity in your existing corporate, subsidiary, product, and service brands to help determine whether a brand in your portfolio will benefit or harm the corporate brand or another sub-brand.
If a sub-brand is well-built, it can become an umbrella brand for a family of product extensions.
Step 4: Assess Your Brand Partnerships
Your brand is one of your most valuable assets. Carefully consider the pros and cons before partnering with any brand. Be thoughtful in determining whether two or more brands should be used to support a product, service, or venture or if there is any benefit to endorsing one or more of your brands with another brand.
From a visual standpoint, you never want to create a hybrid brand in co-branding situations. Lead with one brand or the other depending on which brand has the majority stake. Hybrid brands can dilute both brands.
Look at your existing partnerships and determine:
| PROS | CONS |
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Step 5: Marketing Budget
Two directions to take:
- Masterbrand Architecture: The most cost-efficient structure from a marketing investment standpoint because every marketing dollar spent accrues benefit all brands
- Portfolio Brand Architecture: The most expensive architecture because it requires investment in each brand
When developing brand architecture, it is essential to know the resource requirements to support your brands.
Step 6: Legal and Tax Implications
Brand architecture is not the same as organizational architecture. Specific brand structures may have legal or tax implications. It’s important to consult with a business attorney and financial advisor.
For example:
- Using a brand owned by a different company or legal entity within the parent organization will often require inter-company license agreements
- A group that wants to use a brand may need to license it in different tax jurisdictions, especially internationally
- An endorsement or co-branding strategy is more likely to call for an allocation of licensing costs across companies
Step 7: Determine Your Brand Architecture
House of Brands: Separates the master brand from brand extensions and detaches each extension. The master brand can have competing brands underneath them. Proctor and Gamble is an example where each brand extension is separate and responsible for its brand equity.
Endorsed and Hybrid Brand: Packages multiple brands under a master brand. Each brand extension has its own identity but is associated with the master brand. The master brand equity can be leveraged, or each brand extension can develop its independent strategy. Marriott is an example of an endorsed brand and a hybrid brand model. A hybrid brand employs more than one model of brand architecture. While Marriott endorses most of its brands, brands like Sheraton live under the parent in a ‘House of Brands’ category.
Sub-Brand: Connect back to the parent brand’s promises, values, and message while the sub-brand maintains unique qualities. Apple is one of the best examples of sub-brands. While the products may not have Apple in their name, they are branded as Apple and promote the parent brand. Apple is not a product itself, but each sub-brand takes advantage of Apple’s brand equity and releases different products to cater to many consumer segments.
The Branded House: Offers a logical path to brand extensions. The master brand is always present in a branded house. FedEx serves as an example where each brand offers a different (but complementary) service to the master FedEx brand. The credibility of the master brand is shared, and each brand helps build equity for FedEx.
Step 8: Introduce Your Brand Architecture
Once the best brand architecture is determined, you’ll need a visual system to introduce and support it.
Things to consider as you build the visual system:
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Step 9: Create a Decision Tree
Once your brand architecture is in place, it’s crucial to maintain it. One of the best tools to accomplish this is a decision tree that asks and answers specific questions leading to recommendations consistent with our overall brand strategy. A formalized decision tree can take the guesswork out any future decisions you may face when confronted with branding issues resulting from acquisitions, internal product and brand development, internal readjustment, and more.
Step 10: Evolve the Brand
Brands are not meant to be static; they need to and should be designed to evolve. It’s essential to monitor the brand, conduct regular business and brand audits, innovate, and build new solutions as the market changes.
