Published
March 22, 2021
Brand architecture is how businesses organize their products and services into a portfolio of brands. It includes a road map of how those products relate to and interact with one another and relationships between brands. It's a blueprint for identity and design across dozens of products and business units.
This article offers a look at how this strategy benefits companies by segmenting their offerings into different umbrella or sub-brands that allow customers to choose the type of offering that suits them best. Companies tend to develop more brands as they grow and work with multiple channels to segment their products.
As a critical component of business strategy, a strategic brand architecture allows companies to create a structure of brands that offer more choices for customers. Each brand in the portfolio can be well suited to the needs of specific customer segments.
Architecture can help customers contextualize your company and gain a sense of clarity about your offer and position in the marketplace. Therefore, companies that adopt a portfolio of brands stand to benefit by developing more influence in the market than those that are not organized. This is especially true when there's a lot of competition in a given industry or channel.
Brand architecture is a way for companies to segment their offerings based on market or customer type. The idea is that by creating separate brands, companies can develop products and services for specific market segments or ideal customers. This adds flexibility for product or service expansion in the future.
Creating portfolio brands gives companies more flexibility when making changes to their strategy. This way, they can add or modify a product or service while still using the same architecture. But because each brand looks and acts different from the other, customers should choose among them.
These benefits allow businesses to develop products and services for specific markets while also increasing their likelihood of success. Companies can strategically make adjustments that meet customers' needs and objectives, including expanding into new fast-growing market segments.
An optimal brand architecture strategy aims to achieve alignment with overall business strategy and profitability. Optimal strategies should help guide management in making decisions about different brands and their business prospects, ultimately creating more profitable businesses. A company must align its brand architecture with its offers to customers, how it wants to position itself in its target markets, and its growth goals.
When brands are aligned, customers can quickly learn about each offering, and they are all related. When a brand is aligned, it changes how companies should approach marketing. Each brand has its own marketing efforts, messaging, identity, and design. Unaligned brands with no architecture strategy tend to confuse customers and prevent them from choosing one of the brands, which hurts its overall growth.
Sub-brands represent the building blocks of brand architecture, including brands and product lines or one-time offerings. For example, Apple offers a Macbook, iPhone, iPad, and iPod products. Apple also offers iCloud and iTunes software and store separately. The success of Apple's strategy has contributed to its overall brand health and sales growth as it has expanded into other markets.
Businesses can use Sub-brands to create diversity within the organization's portfolio. For example, a company may want to offer its products and services under different brands depending on the customer segments. This allows a company to differentiate its offering from competitors. But it also enables companies to reach other markets and customer segments. Product lines and service lines work together in creating the overall brand architecture of a company or brand.
Proctor and Gamble is an example of a parent company with nearly 100 brands in its company brand portfolio. The corporate brand umbrella includes household names like Tide, Charmin, Pampers. This separation and virtually invisible brand architecture lets the company grow in new markets and expand into new products while maintaining a central brand promise.
Coca-Cola's house of brands includes Coke, Diet Coke, Sprite, Fanta, Minute Maid Lemonade, and other soft drinks. The parent company, Coca-Cola Company, uses a solid brand architecture in conjunction with products to offer different emotional benefits to different customer segments.
Because every business needs to adapt to various market and customer types, the organization needs to build a brand architecture to account for future architecture decisions. Each company should design with practicality when developing its portfolio of products and services for customers and markets.
